UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 16, 2022
Midwest Holding Inc.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction |
| 001-39812 (Commission File Number) |
| 20-0362426 (IRS Employer Identification No.) |
of incorporation) |
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2900 South 70th Street, Suite 400
Lincoln, Nebraska 68506
(Address of principal executive offices) (Zip Code)
(402) 489-8266
(Registrant’s telephone number, including area code)
Not Applicable | ||
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):\
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Securities registered pursuant to Section 12(b) of the Act:
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 16, 2022, Midwest Holding Inc. (the “Company”) issued a press release announcing its financial and operating results for the three months ended March 31, 2022. A copy of the press release is furnished herewith as Exhibit 99.1.
The information in this Current Report on Form 8-K furnished pursuant to Item 2.02, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liability under that section, and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are included with this Current Report on Form 8-K:
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 16, 2022
MIDWEST HOLDING INC. | |
By: /s/ Georgette Nicholas | |
Name: Georgette Nicholas | |
Title: Chief Executive Officer |
Exhibit 99.1
LINCOLN, Neb., May 16, 2022 /PRNewswire/ -- Midwest Holding Inc. ("Midwest") (NASDAQ: MDWT), today announced financial results for the first quarter of 2022.
First Quarter 2022 Highlights:
| ● | GAAP net income was $187,000 compared to a $(1.6) million GAAP net loss incurred in the first quarter of 2021. GAAP earnings were 5 cents per share (diluted) versus the (43) cent per-share loss in Q1 2021. |
| ● | GAAP total revenue was $2.6 million compared to the negative total revenue of $(614,000) in the first quarter of 2021. Driving the year-over-year improvement in total revenue was increased net investment income, as invested assets grew to $1.1 billion as of March 31, 2022, compared with $693 million as of March 31, 2021, along with service fee revenue. |
| ● | Annuity direct written premium under statutory accounting principles ("SAP"), a non-GAAP measure, was $98.1 million compared with $123.7 million in 2021's first quarter and $104.2 million in the fourth quarter of 2021. The mix of our new business was 26% Multiyear Guaranteed Annuities (MYGA) and 74% Fixed Income Annuities (FIA). |
| ● | Ceded premiums (SAP) were $40.1 million compared with $47.5 million in the year-earlier quarter. The cession rate, or that portion of our written premiums that we reinsured, was 40.9% compared with 38.4%. |
| ● | Total expenses benefited from negative interest credited due to the fall in value of the options embedded in our liabilities and the gain on mark-to-market value of the options allowance classified in other operating expenses. |
Georgette Nicholas, CEO of Midwest noted, "During the first quarter, we took action to position the Company for further growth relating to pricing, products, and investing in technology and foundational capabilities. We saw encouraging trends in premiums written at the end of the first quarter and into the second quarter. We are benefiting from movements in interest rates in our investment portfolio along with the capabilities we have been developing and saw service fee revenue continue to grow. Overall, the first quarter has provided a base for us to continue to expand on."
Ms. Nicholas concluded: "Our opportunities are substantial to build on the value of our platform. The focus of the team continues to be on the key drivers of growth and profitability: Deepening distribution relationships, state expansion to achieve sales growth, reinsurance, investment management, and operational readiness and efficiency. With these five keys to our strategy, we will deliver on our commitment to shareholders to produce strong growth paired with a high return on capital."
Q1 2022 versus Q1 2021 on a GAAP basis
Midwest reported GAAP net income of $187,000 in the first quarter of 2022 compared to a $(1.6) million GAAP net loss incurred in the first quarter of 2021. On a diluted, per-share basis, this year's quarterly net income was 5 cents compared with the (43)-cent per-share loss reported in the first quarter of 2021.
Investment income in 2022's first quarter was $6.2 million compared with $2.9 million in the prior- year's quarter. Driving the change was an increase in invested assets and from performance on those assets benefiting from core capabilities developed on sourcing assets with higher yield generating approximately a 5.5% return on the investment portfolio.
Amortization of deferred gain on reinsurance reached $970,000 in first quarter of 2022 compared with $461,000 in the first quarter of 2021 primarily due to growth in the deferred gain on co-insurance on our balance sheet, which reflects ceding commissions received on reinsurance of business to third parties.
Service fee revenue rose to $1.1 million versus $438,000 in the year-earlier March quarter. Service fee revenue consists of fee revenue generated for our asset-management services provided to third-party clients. Assets under management for third parties was $455.4 million at March 31, 2022.
1
Other revenue finished at $448,000 compared with $249,000 in the prior-year quarter. Other revenue consists primarily of revenue we generate by providing ancillary services, such as policy administration, to third parties and policy surrender charges.
Our total expenses on a GAAP basis were a negative $3.3 million versus a negative $445,000 in the prior- year's quarter. Total expenses were helped by negative interest credited due to the decrease in value of the options embedded in our liabilities of $2.0 million and an increase in mark-to-market value of our options allowance of $6.4 million. Salaries and benefits were $4.3 million in Q1 2022 compared to $2.9 million in Q1 2021 as we added personnel, built processes, and worked on technology initiatives.
Guidance
We continue to see intense competition in the annuity market through aggressive pricing. We have taken actions to maintain a competitive position and have seen positive results from these actions and improved sales momentum into the second quarter.
State expansion efforts remains a key priority. We have active applications in process and anticipate additional filings this quarter and expect to have more to say on this later in the year.
Given these dynamics, we are affirming our guidance for 2022 based on our current view of our business and the annuity sales market. Anticipated premiums written are expected to be in the range of $500 million to $600 million (SAP), influenced by state expansion, independent marketing organization ("IMO") expansion reallocated personnel and other initiatives. We continue to expect the mix in product sales to be consistent with that of 2021.
The goal is to cede, on average, approximately 70-90% of our premium in the year to generate ceded commission fees and manage capital. Demand from our reinsurance partners is strong and we have capacity in place to cover anticipated written premium through existing reinsurers that have the potential to grow along with additional potential reinsurance transactions in the pipeline.
We are working to bring general and administrative expenses on a management basis, a non-GAAP measure, to be approximately $27 to 28 million for the full year 2022.
Finance Team Update
The Company also announced today that it has transitions on its finance team. Daniel S. Maloney will be joining as the Executive Vice President of Accounting and Finance on May 23, 2022. Mr. Maloney is a Certified Public Accountant with more than 30 years of experience in the insurance industry at companies including Players Health, Horace Mann, American Fidelity, and AIG. He has a background in public accounting. He has worked in various finance roles related to SEC reporting, statutory reporting, and controllership. Eric N. Berg will be stepping down as Senior Vice President and Chief Financial Officer, effective May 16, 2022. Mr. Berg's departure is not related to any disagreement relating to the Company's accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).
Ms. Nicholas will serve as both the CEO and the Chief Financial Officer in the interim. The Company will initiate a search to find its next Chief Financial Officer and will consider internal and external candidates in due course.
Q1 2022 Key Performance Indicators and Non-GAAP Financial Measures
In addition to GAAP measures, Midwest's management utilizes a series of key performance indicators (KPIs) and non-GAAP measures to, among other things:
1) monitor and evaluate the performance of our business operations and financial performance;
2
2) facilitate internal comparisons of the historical operating performance of our business operations;
3) review and assess the operating performance of our management team;
4) analyze and evaluate financial and strategic planning decisions regarding future operations;
5) plan for and prepare future annual operating budgets and determine appropriate levels of operating investments; and
6) facilitate comparison of results between periods and to better understand the underlying historical trends in our business and prospects.
These non-GAAP measures are not a substitute for GAAP measures; however, management believes that when used in conjunction with the GAAP measures, the non-GAAP measures can contribute to investors' understanding of our business. Non-GAAP financial measures used by us may be calculated differently from, and therefore may not be comparable to, similarly titled measures used by other companies. These non-GAAP financial measures should be considered along with, but not as alternatives to, our operating performance measures as prescribed by GAAP.
Annuity Premiums (a KPI)
For the first quarter of 2022, annuity direct written premiums were $98.1 million compared with $123.7 million in the first quarter of 2021 reflecting competitive annuity sales environment. Ceded premiums were $40.1 in 2022's first quarter compared with $47.5 million in the first quarter of 2021. Of the first quarter 2022 sales of $98.1 million, approximately 26 % was in the MYGA category and the remaining 74 % consisted of sales of FIAs.
| Three months ended March 31, | ||||
(In thousands) | 2022 | | 2021 | ||
Annuity Premiums (SAP) | | | | | |
Annuity direct written premiums | $ | 98,111 | | $ | 123,654 |
Ceded premiums | | (40,141) | | | (47,464) |
Net premiums retained | $ | 57,970 | | $ | 76,190 |
Fees Received for Reinsurance (a KPI)
We use this non-GAAP figure to measure our efforts to secure third-party capital to back our reinsurance programs. Fees Received for Reinsurance sums two components: Amortization of deferred gain on reinsurance, which is a line item in our Consolidated Statements of Comprehensive Income (Loss), and deferred coinsurance ceding commission, which is a line item in our Consolidated Statements of Cash Flows.
3
For the first quarter of 2022, fees received for reinsurance totaled $2.4 million compared with $2.9 million in the first quarter of 2021.
| | Three months ended March 31, | ||||
(In thousands) | | 2022 |
| 2021 | ||
Fees received for reinsurance(1) | | | | | | |
Fees received for reinsurance - total | | $ | 2,430 | | $ | 2,859 |
General and Administrative Expenses (a non-GAAP measure)
We monitor this figure to track our overhead. It includes salary and benefits and other operating expenses; however, it excludes non-cash stock-based compensation and the non-cash mark-to-market-adjustment of our option budget allowance.
G&A expense in the March 2022 quarter was $8.9 million compared with $5.3 million in the prior year's March quarter. The increase was to support the potential growth in the business and reflected costs incurred to attract talent, for legal and consulting to support transactions, investment structures, state expansion efforts, and technology initiatives.
Management Expenses (a non-GAAP measure)
We use this metric to monitor the expenses of our business on a cash basis. Importantly, we exclude from the calculation of management expenses the index interest credited related to our FIAs because this expense is hedged. Instead, we add back to Management Expenses the period's amortization of options previously purchased to provide this hedge. We view this amortized cost as our true cost of funds. Management Expenses also excludes the mark-to-market adjustment of our option budget allowance. Management Expenses and non-cash stock-based compensation.
4
For the three months ended March 31, 2022, the sum of salaries and benefits and other operating expenses totaled $2.5 million compared to $1.4 million for the three months ended March 31, 2021. For the three months ended March 31, 2022, as disclosed above, included in these expenses is mainly salaries, benefits and other operating expenses, along with $6.4 million of non-cash mark-to-market option allowance of our derivative option allowance, which we exclude in our management G&A.
| | Three months ended March 31, | ||||
| | 2022 |
| 2021 | ||
Reconciliation - Management Expenses to GAAP Expenses | | | | | | |
Total expenses - GAAP | | $ | (3,327) | | $ | (445) |
Adjustments: | | | | | | |
Less: Benefits | | | — | | | — |
Less: Stock-based compensation | | | (32) | | | (261) |
Less: Mark-to-market option allowance | | | 6,386 | | | 4,115 |
Less: FIA interest credited - GAAP | | | 7,764 | | | 2,819 |
Add: FIA options cost - amortized | | | 1,953 | | | 1,316 |
Management expenses - total | | $ | 12,744 | | $ | 7,544 |
SPECIAL CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained or incorporated by reference in this release constitute forward-looking statements. These statements are based on management's expectations, estimates, projections and assumptions. In some cases, you can identify forward-looking statements by terminology including "could," "may," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "intend," or "continue," the negative of these terms, or other comparable terminology used in connection with any discussion of future operating results or financial performance. These statements are only predictions and reflect our management's good faith present expectation of future events and are subject to a number of important factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.
Factors that may cause our actual results to differ materially from those contemplated or projected, forecast, estimated or budgeted in such forward-looking statements include among others, the following possibilities:
| ● | intense competition, including the intensification of price competition, competitive pressures from established insurers with greater financial resources, the entry of new competitors, and the introduction of new products by new and existing competitors; |
| ● | our business plan, particularly including our reinsurance strategy, may not prove to be successful; |
| ● | our reliance on third-party insurance marketing organizations to market and sell our annuity insurance products through a network of independent agents; |
| ● | adverse changes in our ratings obtained from independent rating agencies; |
5
| ● | failure to maintain adequate reinsurance; |
| ● | our inability to expand our insurance operations outside the 21 states and District of Columbia in which we are currently licensed; |
| ● | our annuity insurance products may not achieve significant market acceptance; |
| ● | we may continue to experience operating losses in the foreseeable future; |
| ● | the possible loss or retirement of one or more of our key executive personnel; |
| ● | adverse state and federal legislation or regulation, including decreases in rates, limitations on premium levels, increases in minimum capital and reserve requirements, benefit mandates and tax treatment of insurance products; |
| ● | fluctuations in interest rates causing a reduction of investment income or increase in interest expense and in the market value of interest-rate sensitive investment; |
| ● | failure to obtain new customers, retain existing customers, or reductions in policies in force by existing customers; |
| ● | higher service, administrative, or general expense due to the need for additional advertising, marketing, administrative or management information systems expenditures; |
| ● | changes in our liquidity due to changes in asset and liability matching; |
| ● | possible claims relating to sales practices for insurance products; and |
| ● | lawsuits in the ordinary course of business. |
Earnings Teleconference information and Details
Midwest Holding has announced plans to host a conference call to discuss financial and operating results for the first quarter of 2022 on May 17, 2022 at 8:30 a.m. Eastern Time. The Company also posted those results on the investor relations section of its website at https://ir.midwestholding.com after the close of the financial markets on May 16, 2022.
To register for this conference call, please go to this link https://www.incommglobalevents.com/registration/q4inc/10823/midwest-holding-inc-q12022/ .
Registrants will receive confirmation with dial-in details.
The call may also be accessed via webcast, using this link https://events.q4inc.com/attendee/588008611.
A replay of the webcast will be made available after the call on the Investor Relations page of the Company's website at https://ir.midwestholding.com
About Midwest Holding Inc.
Midwest Holding Inc. is a growing, technology-enabled, services-oriented annuity platform. Midwest designs and develops annuity products that are distributed through independent distribution channels, to a large and growing demographic of U.S. retirees. Midwest originates, manages and typically transfers these annuities through reinsurance arrangements to asset managers and other third-party investors. Midwest also provides the operational and regulatory infrastructure and expertise to enable asset managers and third-party investors to form and manage their own reinsurance capital vehicles.
For more information, please visit www.midwestholding.com
Investor contact: ir@midwestholding.com
Media inquiries: press@midwestholding.com
6
Consolidated Balance Sheets
(in thousands)
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| March 31, 2022 |
| December 31, 2021 | ||
(In thousands, except share information) | | | (Unaudited) | | | |
Assets |
| |
|
| |
|
Fixed maturities, available for sale, at fair value | | $ | 765,013 | | $ | 683,296 |
Mortgage loans on real estate, held for investment | |
| 174,127 | |
| 183,203 |
Derivative instruments (See Note 5) | | | 14,606 | | | 23,022 |
Equity securities, at fair value (cost: $22,158 in 2022 and $22,158 in 2021) | | | 21,190 | | | 21,869 |
Other invested assets | | | 55,479 | | | 35,293 |
Investment escrow | | | 1,552 | | | 3,611 |
Federal Home Loan Bank (FHLB) stock | | | 500 | | | 500 |
Preferred stock | | | 20,134 | | | 18,686 |
Notes receivable | | | 6,035 | | | 5,960 |
Policy loans | |
| 90 | |
| 87 |
Total investments | |
| 1,058,726 | |
| 975,527 |
Cash and cash equivalents | |
| 144,684 | |
| 142,013 |
Deferred acquisition costs, net | | | 28,292 | | | 24,530 |
Premiums receivable | | | 364 | | | 354 |
Accrued investment income | | | 13,205 | | | 13,623 |
Reinsurance recoverables (See Note 9) | | | 33,908 | | | 38,579 |
Intangible assets | |
| 700 | |
| 700 |
Property and equipment, net | |
| 570 | |
| 386 |
Operating lease right of use assets | | | 2,300 | | | 2,360 |
Receivable for securities sold | | | 5,774 | | | 19,732 |
Other assets | |
| 13,375 | |
| 2,113 |
Total assets | | $ | 1,301,898 | | $ | 1,219,917 |
Liabilities and Stockholders’ Equity | |
|
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Liabilities: | |
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| |
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Benefit reserves | | $ | 12,899 | | $ | 12,941 |
Policy claims | |
| 1,167 | |
| 237 |
Deposit-type contracts (See note 11) | |
| 1,148,085 | |
| 1,075,439 |
Advance premiums | |
| 10 | |
| 1 |
Deferred gain on coinsurance transactions | |
| 30,049 | |
| 28,589 |
Lease liabilities (See Note 13): | | | | | | |
Operating lease | | | 2,307 | | | 2,364 |
Payable for securities purchased | | | 3,290 | | | 5,546 |
Other liabilities | | | 24,900 | | | 9,044 |
Total liabilities | |
| 1,222,707 | |
| 1,134,161 |
Stockholders’ Equity: | |
| | |
| |
Preferred stock, $0.001 par value; authorized 2,000,000 shares; no shares issued and outstanding as of March 31, 2022 or December 31, 2021 | |
| — | |
| — |
Voting common stock, $0.001 par value; authorized 20,000,000 shares; 3,737,564 shares issued and outstanding as of March 31, 2022 and December 31, 2021 , respectively; non-voting common stock, $0.001 par value, 2,000,000 shares authorized; no shares issued and outstanding March 31, 2022 and December 31, 2021, respectively | |
| 4 | |
| 4 |
Additional paid-in capital | |
| 138,483 | |
| 138,452 |
Treasury stock | | | (175) | | | (175) |
Accumulated deficit | |
| (69,972) | |
| (70,159) |
Accumulated other comprehensive loss (income) | |
| (7,581) | |
| 2,634 |
Total Midwest Holding Inc.'s stockholders' equity | | | 60,759 | | | 70,756 |
Noncontrolling interests | | | 18,432 | | | 15,000 |
Total stockholders' equity | |
| 79,191 | |
| 85,756 |
Total liabilities and stockholders' equity | | $ | 1,301,898 | | $ | 1,219,917 |
7
Consolidated Statements of Comprehensive Loss
(in thousands, except per share amounts)
| | Three months ended March 31, | | ||||
(In thousands, except per share data) |
| 2022 |
| 2021 |
| ||
Revenues | | |
|
| |
| |
Investment income, net of expenses | | $ | 6,242 | |
| 2,887 | |
Net realized loss on investments (See Note 4) | |
| (6,175) | |
| (4,649) | |
Amortization of deferred gain on reinsurance transactions | | | 970 | | | 461 | |
Service fee revenue, net of expenses | | | 1,098 | | | 438 | |
Other revenue | |
| 448 | |
| 249 | |
Total revenue | |
| 2,583 | |
| (614) | |
Expenses | |
|
| |
|
| |
Interest credited | |
| (6,674) | |
| (2,346) | |
Amortization of deferred acquisition costs | |
| 851 | |
| 503 | |
Salaries and benefits | |
| 4,318 | |
| 2,927 | |
Other operating expenses | |
| (1,822) | |
| (1,529) | |
Total expenses | |
| (3,327) | |
| (445) | |
Net income (loss) before income tax expense | |
| 5,910 | |
| (169) | |
Income tax expense (See Note 8) | |
| (4,722) | |
| (1,432) | |
Net income (loss) after income tax expense | | | 1,188 | | | (1,601) | |
Less: Income attributable to noncontrolling interest | | | 1,001 | | | — | |
Net income (loss) attributable to Midwest Holding Inc. | | | 187 | | | (1,601) | |
Comprehensive (loss) income: | |
|
| |
|
| |
Unrealized (losses) gains on investments arising during the three months ended March 31, 2022 and 2021 , net of offsets, (tax ($2,900) and $181, respectively) | |
| (10,162) | |
| 963 | |
Less: Reclassification adjustment for net realized losses on investments, net of offsets (net of tax ($136) and $85, respectively) | |
| (53) | |
| (321) | |
Other comprehensive (loss) income | |
| (10,215) | |
| 642 | |
Comprehensive loss | | $ | (10,028) | | $ | (959) | |
Income (loss) per common share | | | | | | | |
Basic | | $ | 0.05 | | $ | (0.43) | |
Diluted | | $ | 0.05 | | $ | (0.43) | |
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Consolidated Statements of Cash Flows
(in thousands)
|
| Three months ended March 31, | ||||
(In thousands) | | 2022 |
| 2021 | ||
Cash Flows from Operating Activities: |
| |
|
| |
|
Gain (loss) attributable to Midwest Holding, Inc. | | $ | 187 | | $ | (1,601) |
Adjustments to arrive at cash provided by operating activities: | |
|
| |
|
|
Net premium and discount on investments | |
| (639) | |
| (280) |
Depreciation and amortization | |
| 11 | |
| 14 |
Stock options | |
| 32 | |
| 261 |
Amortization of deferred acquisition costs | | | 851 | | | 503 |
Deferred acquisition costs capitalized | | | (4,464) | | | (6,774) |
Net realized loss on investments | |
| 6,175 | |
| 4,649 |
Deferred gain on coinsurance transactions | |
| 1,460 | |
| 2,398 |
Changes in operating assets and liabilities: | |
|
| |
|
|
Reinsurance recoverables | | | 5,316 | | | (6,165) |
Interest and dividends due and accrued | |
| 418 | |
| (2,288) |
Premiums receivable | |
| (10) | |
| — |
Deposit-type liabilities | | | (16,151) | | | (4,317) |
Policy liabilities | |
| 897 | |
| 12 |
Receivable and payable for securities | | | 11,702 | | | — |
Other assets and liabilities | |
| 4,522 | |
| 21,408 |
Other assets and liabilities - discontinued operations | |
| — | |
| (2) |
Net cash provided by operating activities | |
| 10,307 | |
| 7,818 |
Cash Flows from Investing Activities: | |
|
| |
|
|
Fixed maturities available for sale: | |
|
| |
|
|
Purchases | |
| (226,416) | |
| (176,434) |
Proceeds from sale or maturity | |
| 140,758 | |
| 61,831 |
Mortgage loans on real estate, held for investment | |
| | |
| |
Purchases | | | (19,699) | | | (16,447) |
Proceeds from sale | | | 30,835 | | | 1,661 |
Derivatives | | | | | | |
Purchases | | | (4,691) | | | (4,157) |
Proceeds from sale | | | 1,388 | | | 660 |
Equity securities | | | | | | (42,093) |
Purchases | | | - | | | |
Proceeds from sale | | | 142 | | | |
Purchase of equity method securities | | | | | | |
Other invested assets | | | | | | |
Purchases | | | (23,768) | | | (5,160) |
Proceeds from sale | | | 3,334 | | | 1,308 |
Preferred stock | | | (1,549) | | | (475) |
Notes receivable | | | — | | | — |
Net change in policy loans | |
| (3) | |
| (3) |
Net purchases of property and equipment | |
| (195) | |
| (10) |
Net cash used in investing activities | |
| (99,864) | |
| (179,319) |
Cash Flows from Financing Activities: | |
|
| |
|
|
Net transfer to noncontrolling interest | | | 3,432 | | | — |
Repurchase of common stock | | | - | | | — |
Acquisition of noncontrolling interest | | | - | | | — |
Receipts on deposit-type contracts | |
| 98,111 | |
| 123,654 |
Withdrawals on deposit-type contracts | |
| (9,315) | |
| (2,905) |
Net cash provided by financing activities | |
| 92,228 | |
| 120,749 |
Net increase (decrease) in cash and cash equivalents | |
| 2,671 | |
| (50,752) |
Cash and cash equivalents: | |
|
| |
|
|
Beginning | |
| 142,013 | |
| 151,679 |
Ending | | $ | 144,684 | | $ | 100,927 |
| | | | | | |
Supplementary information | |
|
| |
|
|
Cash paid for taxes | | $ | 250 | | $ | — |
9