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EVEREST GROUP, LTD. - Quarter Report: 2021 September (Form 10-Q)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

 

_X_ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2021

 

___ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Commission file number 1-15731

 

 

EVEREST RE GROUP, LTD.

(Exact name of registrant as specified in its charter)

Bermuda

 

98-0365432

(State or other jurisdiction of

incorporation or organization)

 

 

(I.R.S. Employer

Identification No.)

Seon Place – 4th Floor

141 Front Street

PO Box HM 845

HamiltonHM 19, Bermuda

441-295-0006

 

(Address, including zip code, and telephone number, including area code,

of registrant’s principal executive office)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

 

Yes

X

 

No

 

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

 

Yes

X

 

No

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer

X

 

Accelerated filer

 

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

Indicate by check mark if the registrant is an emerging growth company and 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.

 

YES

 

 

NO

X

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

 

YES

 

 

NO

X

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Class

 

Trading Symbol

Name of Exchange where

Registered

Number of Shares Outstanding

At November 1, 2021

 

Common Shares, $0.01 par value

 

RE

 

New York Stock Exchange

 

39,369,026

 

 


 

EVEREST RE GROUP, LTD

 

Table of Contents

Form 10-Q

 

 

Page

PART I

 

FINANCIAL INFORMATION

 

Item 1.

Financial Statements

 

 

 

 

 

Consolidated Balance Sheets as of September 30, 2021 (unaudited)

 

 

and December 31, 2020

1

 

 

 

 

Consolidated Statements of Operations and Comprehensive Income (Loss) for the

 

 

three and nine months ended September 30, 2021 and 2020 (unaudited)

2

 

 

 

 

Consolidated Statements of Changes in Shareholders’ Equity for the nine

 

 

months ended September 30, 2021 and 2020 (unaudited)

3

 

 

 

 

Consolidated Statements of Cash Flows for the nine months ended

 

 

September 30, 2021 and 2020 (unaudited)

4

 

 

 

 

Notes to Consolidated Interim Financial Statements (unaudited)

5

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and

 

 

Results of Operation

31

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

53

 

 

 

Item 4.

Controls and Procedures

53

 

 

 

 

PART II

 

OTHER INFORMATION

 

Item 1.

Legal Proceedings

54

 

 

 

Item 1A.

Risk Factors

54

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

54

 

 

 

Item 3.

Defaults Upon Senior Securities

54

 

 

 

Item 4.

Mine Safety Disclosures

54

 

 

 

Item 5.

Other Information

55

 

 

 

Item 6.

Exhibits

55

 

 

 

 

 


 

EVEREST RE GROUP, LTD.

CONSOLIDATED BALANCE SHEETS

 

 

 

September 30,

 

December 31,

(Dollars and share amounts in thousands, except par value per share)

2021

 

2020

 

(unaudited)

 

 

 

ASSETS:

 

 

 

 

 

Fixed maturities - available for sale, at market value

$

21,623,119

 

$

20,040,173

(amortized cost: 2021, $21,182,756; 2020, $19,225,067, credit allowances: 2021, $(31,980); 2020, $(1,745))

 

 

 

 

 

Equity securities, at fair value

 

1,523,595

 

 

1,472,236

Short-term investments (cost: 2021, $713,144; 2020, $1,135,088)

 

713,144

 

 

1,134,950

Other invested assets

 

2,855,372

 

 

2,012,581

Cash

 

1,068,441

 

 

801,651

Total investments and cash

 

27,783,671

 

 

25,461,591

Accrued investment income

 

170,364

 

 

141,304

Premiums receivable

 

3,408,338

 

 

2,680,562

Reinsurance recoverables

 

2,215,380

 

 

1,994,555

Funds held by reinsureds

 

811,269

 

 

716,655

Deferred acquisition costs

 

797,735

 

 

622,053

Prepaid reinsurance premiums

 

552,468

 

 

412,015

Income taxes net recoverable

 

-

 

 

17,253

Other assets

 

866,872

 

 

742,369

TOTAL ASSETS

$

36,606,097

 

$

32,788,357

 

 

 

 

 

 

LIABILITIES:

 

 

 

 

 

Reserve for losses and loss adjustment expenses

$

18,956,953

 

$

16,398,997

Future policy benefit reserve

 

36,533

 

 

37,723

Unearned premium reserve

 

4,421,098

 

 

3,501,359

Funds held under reinsurance treaties

 

18,279

 

 

15,807

Other net payable to reinsurers

 

485,682

 

 

294,347

Losses in course of payment

 

150,784

 

 

127,971

Senior notes due 6/1/2044

 

397,284

 

 

397,194

Senior notes due 10/15/2050

 

979,915

 

 

979,524

Long term notes due 5/1/2067

 

223,749

 

 

223,674

Borrowings from FHLB

 

310,000

 

 

310,000

Accrued interest on debt and borrowings

 

23,267

 

 

10,460

Unsettled securities payable

 

83,626

 

 

206,693

Income taxes net payable

 

4,074

 

 

-

Other liabilities

 

536,218

 

 

558,432

Total liabilities

 

26,627,462

 

 

23,062,181

 

 

 

 

 

 

Commitments and contingencies (Note 7)

 

(nil)

 

 

(nil)

 

 

 

 

 

 

SHAREHOLDERS' EQUITY:

 

 

 

 

 

Preferred shares, par value: $0.01; 50,000 shares authorized;

 

 

 

 

 

no shares issued and outstanding

 

-

 

 

-

Common shares, par value: $0.01; 200,000 shares authorized; (2021) 69,806

 

 

 

 

 

and (2020) 69,620 outstanding before treasury shares

 

698

 

 

696

Additional paid-in capital

 

2,266,342

 

 

2,245,301

Accumulated other comprehensive income (loss), net of deferred income

 

 

 

 

 

tax expense (benefit) of $44,338 at 2021 and $80,451 at 2020

 

203,733

 

 

534,899

Treasury shares, at cost; 30,427 shares (2021) and 29,636 shares (2020)

 

(3,822,235)

 

 

(3,622,172)

Retained earnings

 

11,330,097

 

 

10,567,452

Total shareholders' equity

 

9,978,635

 

 

9,726,176

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$

36,606,097

 

$

32,788,357

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

1


 

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(Dollars in thousands, except per share amounts)

2021

 

2020

 

2021

 

2020

 

(unaudited)

 

(unaudited)

REVENUES:

 

 

 

 

 

 

 

 

 

 

 

Premiums earned

$

2,656,403

 

$

2,205,811

 

$

7,602,640

 

$

6,285,030

Net investment income

 

292,759

 

 

234,233

 

 

960,267

 

 

420,116

Net realized capital gains (losses):

 

 

 

 

 

 

 

 

 

 

 

Credit allowances on fixed maturity securities

 

(7,329)

 

 

6,196

 

 

(30,234)

 

 

(19,641)

Other net realized capital gains (losses)

 

3,107

 

 

104,007

 

 

169,023

 

 

103,904

Total net realized capital gains (losses)

 

(4,222)

 

 

110,203

 

 

138,789

 

 

84,263

Other income (expense)

 

(19,517)

 

 

59,937

 

 

44,190

 

 

47,306

Total revenues

 

2,925,423

 

 

2,610,184

 

 

8,745,886

 

 

6,836,715

 

 

 

 

 

 

 

 

 

 

 

 

CLAIMS AND EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

Incurred losses and loss adjustment expenses

 

2,274,301

 

 

1,736,210

 

 

5,571,861

 

 

4,574,066

Commission, brokerage, taxes and fees

 

564,335

 

 

445,332

 

 

1,611,095

 

 

1,360,170

Other underwriting expenses

 

141,150

 

 

138,875

 

 

424,225

 

 

385,865

Corporate expenses

 

17,817

 

 

10,618

 

 

46,363

 

 

29,184

Interest, fees and bond issue cost amortization expense

 

15,539

 

 

6,641

 

 

46,785

 

 

21,477

Total claims and expenses

 

3,013,142

 

 

2,337,676

 

 

7,700,329

 

 

6,370,762

 

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE TAXES

 

(87,719)

 

 

272,508

 

 

1,045,557

 

 

465,953

Income tax expense (benefit)

 

(14,251)

 

 

29,451

 

 

97,181

 

 

15,404

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

$

(73,468)

 

$

243,057

 

$

948,376

 

$

450,549

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

 

 

Unrealized appreciation (depreciation) ("URA(D)") on securities arising during the period

 

(100,021)

 

 

63,480

 

 

(304,465)

 

 

335,835

Reclassification adjustment for realized losses (gains) included in net income (loss)

 

(1,388)

 

 

(11,453)

 

 

(3,464)

 

 

12,689

Total URA(D) on securities arising during the period

 

(101,409)

 

 

52,027

 

 

(307,929)

 

 

348,524

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

(53,599)

 

 

60,628

 

 

(28,886)

 

 

30,390

 

 

 

 

 

 

 

 

 

 

 

 

Reclassification adjustment for amortization of net (gain) loss included in net income (loss)

 

1,563

 

 

1,806

 

 

5,649

 

 

4,532

Total benefit plan net gain (loss) for the period

 

1,563

 

 

1,806

 

 

5,649

 

 

4,532

Total other comprehensive income (loss), net of tax

 

(153,445)

 

 

114,461

 

 

(331,166)

 

 

383,446

 

 

 

 

 

 

 

 

 

 

 

 

COMPREHENSIVE INCOME (LOSS)

$

(226,913)

 

$

357,518

 

$

617,210

 

$

833,995

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(1.88)

 

$

6.08

 

$

23.74

 

$

11.20

Diluted

 

(1.88)

 

 

6.07

 

 

23.72

 

 

11.18

 

 

 

 

 

 

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

2


 

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF

CHANGES IN SHAREHOLDERS’ EQUITY

 

(Dollars in thousands, except share and dividends per share amounts)

2021

 

2020

 

(unaudited)

COMMON SHARES (shares outstanding):

 

 

 

 

 

Balance, January 1

 

39,983,481

 

 

40,798,963

Issued during the period, net

 

196,481

 

 

159,423

Treasury shares acquired

 

(97,462)

 

 

(970,892)

Balance, March 31

 

40,082,500

 

 

39,987,494

Issued during the period, net

 

940

 

 

(15,849)

Treasury shares acquired

 

(68,100)

 

 

-

Balance, June 30

 

40,015,340

 

 

39,971,645

Issued during the period, net

 

(10,721)

 

 

(5,129)

Treasury shares acquired

 

(625,358)

 

 

-

Balance, September 30

 

39,379,261

 

 

39,966,516

 

 

 

 

 

 

COMMON SHARES (par value):

 

 

 

 

 

Balance, January 1

$

696

 

$

694

Issued during the period, net

 

2

 

 

2

Balance, March 31

 

698

 

 

696

Issued during the period, net

 

-

 

 

-

Balance, June 30

 

698

 

 

696

Issued during the period, net

 

-

 

 

-

Balance, September 30

 

698

 

 

696

 

 

 

 

 

 

ADDITIONAL PAID-IN CAPITAL:

 

 

 

 

 

Balance, January 1

 

2,245,301

 

 

2,219,660

Share-based compensation plans

 

436

 

 

(3,181)

Balance, March 31

 

2,245,737

 

 

2,216,479

Share-based compensation plans

 

10,653

 

 

9,514

Balance, June 30

 

2,256,390

 

 

2,225,993

Share-based compensation plans

 

9,952

 

 

9,385

Balance, September 30

 

2,266,342

 

 

2,235,378

 

 

 

 

 

 

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS),

 

 

 

 

 

NET OF DEFERRED INCOME TAXES:

 

 

 

 

 

Balance, January 1

 

534,899

 

 

28,152

Net increase (decrease) during the period

 

(299,820)

 

 

(297,903)

Balance, March 31

 

235,079

 

 

(269,751)

Net increase (decrease) during the period

 

122,099

 

 

566,888

Balance, June 30

 

357,178

 

 

297,137

Net increase (decrease) during the period

 

(153,445)

 

 

114,461

Balance, September 30

 

203,733

 

 

411,598

 

 

 

 

 

 

RETAINED EARNINGS:

 

 

 

 

 

Balance, January 1

 

10,567,452

 

 

10,306,571

Change to beginning balance due to adoption of Accounting Standards Update 2016-13

 

-

 

 

(4,214)

Net income (loss)

 

341,862

 

 

16,612

Dividends declared ($1.55 per share 2021 and $1.55 per share 2020)

 

(62,228)

 

 

(63,277)

Balance, March 31

 

10,847,086

 

 

10,255,692

Net income (loss)

 

679,982

 

 

190,880

Dividends declared ($1.55 per share 2021 and $1.55 per share 2020)

 

(62,046)

 

 

(61,927)

Balance, June 30

 

11,465,022

 

 

10,384,645

Net income (loss)

 

(73,468)

 

 

243,057

Dividends declared ($1.55 per share 2021 and $1.55 per share 2020)

 

(61,457)

 

 

(61,910)

Balance, September 30

 

11,330,097

 

 

10,565,792

 

 

 

 

 

 

TREASURY SHARES AT COST:

 

 

 

 

 

Balance, January 1

 

(3,622,172)

 

 

(3,422,152)

Purchase of treasury shares

 

(23,545)

 

 

(200,020)

Balance, March 31

 

(3,645,717)

 

 

(3,622,172)

Purchase of treasury shares

 

(16,782)

 

 

-

Balance, June 30

 

(3,662,499)

 

 

(3,622,172)

Purchase of treasury shares

 

(159,736)

 

 

-

Balance, September 30

 

(3,822,235)

 

 

(3,622,172)

 

 

 

 

 

 

TOTAL SHAREHOLDERS' EQUITY, September 30

$

9,978,635

 

$

9,591,292

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

 

 

3


 

EVEREST RE GROUP, LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

 

Nine Months Ended

 

September 30,

(Dollars in thousands)

2021

 

2020

 

(unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

Net income (loss)

$

948,376

 

$

450,549

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

Decrease (increase) in premiums receivable

 

(736,614)

 

 

(357,162)

Decrease (increase) in funds held by reinsureds, net

 

(92,512)

 

 

(53,878)

Decrease (increase) in reinsurance recoverables

 

(230,593)

 

 

(172,454)

Decrease (increase) in income taxes

 

57,270

 

 

184,311

Decrease (increase) in prepaid reinsurance premiums

 

(146,639)

 

 

(7,963)

Increase (decrease) in reserve for losses and loss adjustment expenses

 

2,576,049

 

 

1,665,982

Increase (decrease) in future policy benefit reserve

 

(1,189)

 

 

(2,218)

Increase (decrease) in unearned premiums

 

927,524

 

 

392,904

Increase (decrease) in other net payable to reinsurers

 

198,954

 

 

68,784

Increase (decrease) in losses in course of payment

 

23,661

 

 

132,208

Change in equity adjustments in limited partnerships

 

(543,401)

 

 

(12,475)

Distribution of limited partnership income

 

105,571

 

 

55,576

Change in other assets and liabilities, net

 

(247,615)

 

 

(131,224)

Non-cash compensation expense

 

33,199

 

 

29,337

Amortization of bond premium (accrual of bond discount)

 

57,289

 

 

32,594

Net realized capital (gains) losses

 

(138,789)

 

 

(84,263)

Net cash provided by (used in) operating activities

 

2,790,541

 

 

2,190,608

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

Proceeds from fixed maturities matured/called - available for sale, at market value

 

2,756,963

 

 

1,781,821

Proceeds from fixed maturities sold - available for sale, at market value

 

883,149

 

 

1,390,747

Proceeds from fixed maturities sold - available for sale, at fair value

 

-

 

 

2,054

Proceeds from equity securities sold, at fair value

 

578,894

 

 

329,750

Distributions from other invested assets

 

216,573

 

 

210,527

Cost of fixed maturities acquired - available for sale, at market value

 

(5,670,636)

 

 

(3,874,890)

Cost of equity securities acquired, at fair value

 

(507,862)

 

 

(460,953)

Cost of other invested assets acquired

 

(604,180)

 

 

(392,650)

Net change in short-term investments

 

422,643

 

 

(804,744)

Net change in unsettled securities transactions

 

(177,259)

 

 

89,064

Net cash provided by (used in) investing activities

 

(2,101,715)

 

 

(1,729,274)

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

Common shares issued during the period for share-based compensation, net of expense

 

(12,156)

 

 

(13,617)

Purchase of treasury shares

 

(200,064)

 

 

(200,020)

Dividends paid to shareholders

 

(185,731)

 

 

(187,110)

Cost of debt repurchase

 

-

 

 

(10,647)

FHLB borrowings (repayments)

 

-

 

 

90,000

Cost of shares withheld on settlements of share-based compensation awards

 

(15,133)

 

 

(15,298)

Net cash provided by (used in) financing activities

 

(413,084)

 

 

(336,691)

 

 

 

 

 

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH

 

(8,952)

 

 

6,203

 

 

 

 

 

 

Net increase (decrease) in cash

 

266,790

 

 

130,845

Cash, beginning of period

 

801,651

 

 

808,036

Cash, end of period

$

1,068,441

 

$

938,881

 

 

 

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

Income taxes paid (recovered)

$

39,767

 

$

(169,149)

Interest paid

 

33,422

 

 

16,731

 

 

 

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

 

4


 

NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

 

For the Three and Nine Months Ended September 30, 2021 and 2020

 

1. GENERAL

 

Everest Re Group, Ltd. (“Group”), a Bermuda company, through its subsidiaries, principally provides reinsurance and insurance in the U.S., Bermuda and international markets. As used in this document, “Company” means Group and its subsidiaries.

 

2. BASIS OF PRESENTATION

 

The unaudited consolidated financial statements of the Company as of September 30, 2021 and December 31, 2020 and for the three and nine months ended September 30, 2021 and 2020 include all adjustments, consisting of normal recurring accruals, which, in the opinion of management, are necessary for a fair statement of the results on an interim basis. Certain financial information, which is normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”), has been omitted since it is not required for interim reporting purposes. The December 31, 2020 consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP. The results for the three and nine months ended September 30, 2021 and 2020 are not necessarily indicative of the results for a full year. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the years ended December 31, 2020, 2019 and 2018, included in the Company’s most recent Form 10-K filing.

 

The Company consolidates the results of operations and financial position of all voting interest entities ("VOE") in which the Company has a controlling financial interest and all variable interest entities ("VIE") in which the Company is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VIE or VOE, depends on the facts and circumstances surrounding each entity.

 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities (and disclosure of contingent assets and liabilities) at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Ultimate actual results could differ, possibly materially, from those estimates. This is particularly true given the fluid and continuing nature of the COVID-19 Pandemic. This is an ongoing event and so is the Company’s evaluation and analysis. While the Company’s analysis considers all aspects of its operations, it does not take into account legal, regulatory or legislative intervention that could retroactively mandate or expand coverage provisions. Given the uncertainties in the current public health and economic environment, there could be an adverse impact on results for the Property & Casualty industry and the Company for the remainder of the year. The impact is dependent on the shape and length of the economic recovery.

 

All intercompany accounts and transactions have been eliminated.

 

Certain reclassifications and format changes have been made to prior years’ amounts to conform to the 2021 presentation.

 

Application of Recently Issued Accounting Standard Changes.

 

Reference Rate Reform - LIBOR. In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 (and subsequently issued ASU 2021-01 in January 2021), which outlines the issues surrounding the cessation of LIBOR as a reference rate for contractual debt agreements. The guidance also details the potential alternative expedients and sources available for use in determination of rates and terms for such debt agreements in order to apply appropriate accounting policy. The guidance is effective for annual reporting

5


 

periods beginning after December 15, 2021. The Company is currently evaluating the impact of the adoption of ASU 2020-04 and 2021-01 on its financial statements.

 

Accounting for Income Taxes. In December 2019, The FASB issued ASU 2019-12, which provides simplification of existing guidance for income taxes, including the removal of certain exceptions related to recognition of deferred tax liabilities on foreign subsidiaries. The guidance is effective for annual reporting periods beginning after December 15, 2020 and interim periods within that annual reporting period. The Company adopted the guidance as of January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s financial statements.

 

Accounting for Long Duration Contracts. In August 2018, FASB issued ASU 2018-12, which discusses changes to the recognition, measurement and presentation of long duration contracts. The main provisions of this guidance address the following: 1) In determining liability for future policy benefits, companies must review cash flow assumptions at least annually and the discount rate assumption at each reporting period date 2) Amortization of deferred acquisition costs has been simplified to be in constant level proportion to either premiums, gross profits or gross margins 3) Disaggregated roll forwards of beginning and ending liabilities for future policy benefits are required. The guidance was originally effective for annual reporting periods beginning after December 15, 2020 and interim periods within that annual reporting period. However, FASB issued ASU 2019-09 in November 2019 and then ASU 2020-11 in November 2021, which ultimately defers the effective date of ASU 2018-12 until annual reporting periods beginning after December 15, 2022. The Company is currently evaluating the impact of the adoption of ASU 2018-12 on its financial statements.

 

Any issued guidance and pronouncements, other than those directly referenced above, are deemed by the Company to be either not applicable or immaterial to its financial statements.

 

3. INVESTMENTS

 

The following tables show amortized cost, allowance for credit losses, gross unrealized appreciation, gross unrealized depreciation and market value of available for sale, fixed maturity securities as of the dates indicated:

 

 

 

At September 30, 2021

 

 

Amortized

 

Allowance for

 

Unrealized

 

Unrealized

 

Market

(Dollars in thousands)

Cost

 

Credit Losses

 

Appreciation

 

Depreciation

 

Value

Fixed maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities and obligations of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies and corporations

$

1,344,813

 

$

-

 

$

28,332

 

$

(10,323)

 

$

1,362,822

 

Obligations of U.S. states and political subdivisions

 

578,289

 

 

(151)

 

 

31,295

 

 

(1,058)

 

 

608,375

 

Corporate securities

 

7,315,144

 

 

(22,890)

 

 

254,723

 

 

(52,736)

 

 

7,494,241

 

Asset-backed securities

 

3,284,025

 

 

(7,679)

 

 

32,405

 

 

(3,499)

 

 

3,305,252

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

1,042,504

 

 

-

 

 

49,729

 

 

(4,363)

 

 

1,087,870

 

Agency residential

 

2,208,540

 

 

-

 

 

45,876

 

 

(8,415)

 

 

2,246,001

 

Non-agency residential

 

7,316

 

 

-

 

 

11

 

 

(21)

 

 

7,306

 

Foreign government securities

 

1,428,105

 

 

-

 

 

54,778

 

 

(27,738)

 

 

1,455,145

 

Foreign corporate securities

 

3,974,020

 

 

(1,260)

 

 

129,296

 

 

(45,949)

 

 

4,056,107

Total fixed maturity securities

$

21,182,756

 

$

(31,980)

 

$

626,445

 

$

(154,102)

 

$

21,623,119

 

6


 

 

 

At December 31, 2020

 

 

Amortized

 

Allowance for

 

Unrealized

 

Unrealized

 

Market

(Dollars in thousands)

Cost

 

Credit Losses

 

Appreciation

 

Depreciation

 

Value

Fixed maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities and obligations of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies and corporations

$

1,325,156

 

$

-

 

$

49,084

 

$

(7,134)

 

$

1,367,106

 

Obligations of U.S. states and political subdivisions

 

543,895

 

 

-

 

 

34,654

 

 

(1,254)

 

 

577,295

 

Corporate securities

 

6,824,800

 

 

(1,220)

 

 

380,677

 

 

(55,231)

 

 

7,149,026

 

Asset-backed securities

 

2,540,809

 

 

-

 

 

30,691

 

 

(5,698)

 

 

2,565,802

 

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

915,923

 

 

-

 

 

75,275

 

 

(895)

 

 

990,303

 

Agency residential

 

2,206,139

 

 

-

 

 

64,663

 

 

(3,063)

 

 

2,267,739

 

Non-agency residential

 

5,187

 

 

-

 

 

9

 

 

(2)

 

 

5,194

 

Foreign government securities

 

1,565,260

 

 

(22)

 

 

102,587

 

 

(22,450)

 

 

1,645,375

 

Foreign corporate securities

 

3,297,898

 

 

(503)

 

 

204,023

 

 

(29,085)

 

 

3,472,333

Total fixed maturity securities

$

19,225,067

 

$

(1,745)

 

$

941,663

 

$

(124,812)

 

$

20,040,173

 

 

The amortized cost and market value of fixed maturity securities are shown in the following table by contractual maturity. Mortgage-backed securities are generally more likely to be prepaid than other fixed maturity securities. As the stated maturity of such securities may not be indicative of actual maturities, the totals for mortgage-backed and asset-backed securities are shown separately.

 

At September 30, 2021

 

At December 31, 2020

 

Amortized

 

Market

 

Amortized

 

Market

(Dollars in thousands)

Cost

 

Value

 

Cost

 

Value

Fixed maturity securities – available for sale:

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

$

1,621,263

 

$

1,621,541

 

$

1,365,793

 

$

1,374,674

Due after one year through five years

 

6,675,763

 

 

6,826,936

 

 

6,529,189

 

 

6,774,785

Due after five years through ten years

 

4,918,975

 

 

5,069,884

 

 

4,414,211

 

 

4,751,903

Due after ten years

 

1,424,370

 

 

1,458,329

 

 

1,247,816

 

 

1,309,773

Asset-backed securities

 

3,284,025

 

 

3,305,252

 

 

2,540,809

 

 

2,565,802

Mortgage-backed securities:

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

1,042,504

 

 

1,087,870

 

 

915,923

 

 

990,303

Agency residential

 

2,208,540

 

 

2,246,001

 

 

2,206,139

 

 

2,267,739

Non-agency residential

 

7,316

 

 

7,306

 

 

5,187

 

 

5,194

Total fixed maturity securities

$

21,182,756

 

$

21,623,119

 

$

19,225,067

 

$

20,040,173

 

The changes in net unrealized appreciation (depreciation) for the Company’s investments are derived from the following sources for the periods indicated:

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(Dollars in thousands)

2021

 

2020

 

2021

 

2020

Increase (decrease) during the period between the market value and cost

 

 

 

 

 

 

 

 

 

 

 

of investments carried at market value, and deferred taxes thereon:

 

 

 

 

 

 

 

 

 

 

 

Fixed maturity securities and short-term investments

$

(108,789)

 

$

55,587

 

$

(344,370)

 

$

392,640

Change in unrealized appreciation (depreciation), pre-tax

 

(108,789)

 

 

55,587

 

 

(344,370)

 

 

392,640

Deferred tax benefit (expense)

 

7,380

 

 

(3,560)

 

 

36,441

 

 

(44,116)

Change in unrealized appreciation (depreciation),

 

 

 

 

 

 

 

 

 

 

 

net of deferred taxes, included in shareholders’ equity

$

(101,409)

 

$

52,027

 

$

(307,929)

 

$

348,524

 

The Company reviews all of its fixed maturity, available for sale securities whose fair value has fallen below their amortized cost at the time of review. The Company then assesses whether the decline in value is due to non-credit related or credit related factors. In making its assessment, the Company evaluates the current market and interest rate environment as well as specific issuer information. Generally, a change in a security’s value caused by a change in the market, interest rate or foreign exchange environment does not constitute a credit impairment, but rather a non-credit related decline in market value. Non-credit related declines in market value are recorded as unrealized losses in accumulated other comprehensive income (loss). If the Company intends to

7


 

sell the security or is more likely than not to sell the security, the Company records the entire fair value adjustment in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss). If the Company determines that the decline is credit related and the Company does not have the intent to sell the security; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis, the Company establishes a credit allowance equal to the estimated credit loss and is recorded in net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss). The amount of the allowance for a given security will generally be the difference between a discounted cash flow model and the Company’s carrying value. The fair value adjustment that is non-credit related is recorded as a component of other comprehensive income (loss), net of tax, and is included in accumulated other comprehensive income (loss) in the Company’s consolidated balance sheets. The Company will adjust the credit allowance account for future changes in credit loss estimates for a security and record this adjustment through net realized capital gains (losses) in the Company’s consolidated statements of operations and comprehensive income (loss).

 

The Company does not create an allowance for uncollectible interest. If interest is not received when due, the interest receivable is immediately reversed and no additional interest is accrued. If future interest is received that has not been accrued, it is recorded as income at that time.

 

The Company’s assessments are based on the issuers’ current and expected future financial position, timeliness with respect to interest and/or principal payments, speed of repayments and any applicable credit enhancements or breakeven constant default rates on mortgage-backed and asset-backed securities, as well as relevant information provided by rating agencies, investment advisors and analysts.

 

Retrospective adjustments are employed to recalculate the values of asset-backed securities. All of the Company’s asset-backed and mortgage-backed securities have a pass-through structure. Each acquisition lot is reviewed to recalculate the effective yield. The recalculated effective yield is used to derive a book value as if the new yield were applied at the time of acquisition. Outstanding principal factors from the time of acquisition to the adjustment date are used to calculate the prepayment history for all applicable securities. Conditional prepayment rates, computed with life to date factor histories and weighted average maturities, are used in the calculation of projected prepayments for pass-through security types.  

 

The tables below display the aggregate market value and gross unrealized depreciation of fixed maturity securities, by security type and contractual maturity, in each case subdivided according to length of time that individual securities had been in a continuous unrealized loss position for the periods indicated:

 

 

 

Duration of Unrealized Loss at September 30, 2021 By Security Type

 

Less than 12 months

 

Greater than 12 months

 

Total

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

 

 

 

Unrealized

(Dollars in thousands)

Market Value

 

Depreciation

 

Market Value

 

Depreciation

 

Market Value

 

Depreciation

Fixed maturity securities - available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities and obligations of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies and corporations

$

381,357

 

$

(6,369)

 

$

57,084

 

$

(3,954)

 

$

438,441

 

$

(10,323)

Obligations of U.S. states and political subdivisions

 

61,687

 

 

(937)

 

 

3,569

 

 

(121)

 

 

65,256

 

 

(1,058)

Corporate securities

 

1,559,623

 

 

(32,541)

 

 

399,617

 

 

(20,195)

 

 

1,959,240

 

 

(52,736)

Asset-backed securities

 

610,425

 

 

(3,131)

 

 

23,396

 

 

(368)

 

 

633,821

 

 

(3,499)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

108,367

 

 

(3,138)

 

 

26,144

 

 

(1,225)

 

 

134,511

 

 

(4,363)

Agency residential

 

814,318

 

 

(5,631)

 

 

134,746

 

 

(2,784)

 

 

949,064

 

 

(8,415)

Non-agency residential

 

2,742

 

 

(19)

 

 

156

 

 

(2)

 

 

2,898

 

 

(21)

Foreign government securities

 

382,570

 

 

(22,491)

 

 

58,238

 

 

(5,247)

 

 

440,808

 

 

(27,738)

Foreign corporate securities

 

1,221,503

 

 

(34,080)

 

 

183,579

 

 

(11,869)

 

 

1,405,082

 

 

(45,949)

Total fixed maturity securities

$

5,142,592

 

$

(108,337)

 

$

886,529

 

$

(45,765)

 

$

6,029,121

 

$

(154,102)

 

8


 

 

 

Duration of Unrealized Loss at September 30, 2021 By Maturity

 

Less than 12 months

 

Greater than 12 months

 

Total

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

 

 

 

Unrealized

(Dollars in thousands)

Market Value

 

Depreciation

 

Market Value

 

Depreciation

 

Market Value

 

Depreciation

Fixed maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

$

178,193

 

$

(6,982)

 

$

150,934

 

$

(11,210)

 

$

329,127

 

$

(18,192)

Due in one year through five years

 

1,494,463

 

 

(33,475)

 

 

381,773

 

 

(17,997)

 

 

1,876,236

 

 

(51,472)

Due in five years through ten years

 

1,466,402

 

 

(45,526)

 

 

123,239

 

 

(9,696)

 

 

1,589,641

 

 

(55,222)

Due after ten years

 

467,682

 

 

(10,435)

 

 

46,141

 

 

(2,483)

 

 

513,823

 

 

(12,918)

Asset-backed securities

 

610,425

 

 

(3,131)

 

 

23,396

 

 

(368)

 

 

633,821

 

 

(3,499)

Mortgage-backed securities

 

925,427

 

 

(8,788)

 

 

161,046

 

 

(4,011)

 

 

1,086,473

 

 

(12,799)

Total fixed maturity securities

$

5,142,592

 

$

(108,337)

 

$

886,529

 

$

(45,765)

 

$

6,029,121

 

$

(154,102)

 

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at September 30, 2021 were $6,029.1 million and $154.1 million, respectively. The market value of securities for the single issuer (the United States government) whose securities comprised the largest unrealized loss position at September 30, 2021, did not exceed 1.7% of the overall market value of the Company’s fixed maturity securities. The market value of the securities for the issuer with the second largest unrealized loss position at September 30, 2021, comprised less than 0.6% of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $108.3 million of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities, foreign government securities, U.S. Treasury and government securities and agency residential mortgage-backed securities. Of these unrealized losses, $101.6 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $45.8 million of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to foreign and domestic corporate securities and foreign government securities. Of these unrealized losses, $43.4 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. There was no gross unrealized depreciation for mortgage-backed securities related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

 

The Company, given the size of its investment portfolio and capital position, does not have the intent to sell these securities; and it is more likely than not that the Company will not have to sell the security before recovery of its cost basis. In addition, all securities currently in an unrealized loss position are current with respect to principal and interest payments.

 

 

 

Duration of Unrealized Loss at December 31, 2020 By Security Type

 

Less than 12 months

 

Greater than 12 months

 

Total

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

 

 

 

Unrealized

(Dollars in thousands)

Market Value

 

Depreciation

 

Market Value

 

Depreciation

 

Market Value

 

Depreciation

Fixed maturity securities - available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Treasury securities and obligations of

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government agencies and corporations

$

135,190

 

$

(7,134)

 

$

-

 

$

-

 

$

135,190

 

$

(7,134)

Obligations of U.S. states and political subdivisions

 

19,524

 

 

(999)

 

 

4,059

 

 

(255)

 

 

23,583

 

 

(1,254)

Corporate securities

 

669,755

 

 

(26,159)

 

 

247,962

 

 

(29,072)

 

 

917,717

 

 

(55,231)

Asset-backed securities

 

235,566

 

 

(4,768)

 

 

85,595

 

 

(930)

 

 

321,161

 

 

(5,698)

Mortgage-backed securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

53,511

 

 

(578)

 

 

6,592

 

 

(317)

 

 

60,103

 

 

(895)

Agency residential

 

434,447

 

 

(2,016)

 

 

50,353

 

 

(1,047)

 

 

484,800

 

 

(3,063)

Non-agency residential

 

185

 

 

(2)

 

 

-

 

 

-

 

 

185

 

 

(2)

Foreign government securities

 

114,755

 

 

(8,813)

 

 

150,812

 

 

(13,637)

 

 

265,567

 

 

(22,450)

Foreign corporate securities

 

354,548

 

 

(17,489)

 

 

115,595

 

 

(11,596)

 

 

470,143

 

 

(29,085)

Total fixed maturity securities

$

2,017,481

 

$

(67,958)

 

$

660,968

 

$

(56,854)

 

$

2,678,449

 

$

(124,812)

 

9


 

 

 

Duration of Unrealized Loss at December 31, 2020 By Maturity

 

Less than 12 months

 

Greater than 12 months

 

Total

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Gross

 

 

 

 

Unrealized

 

 

 

 

Unrealized

 

 

 

 

Unrealized

(Dollars in thousands)

Market Value

 

Depreciation

 

Market Value

 

Depreciation

 

Market Value

 

Depreciation

Fixed maturity securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Due in one year or less

$

96,144

 

$

(4,942)

 

$

112,419

 

$

(12,071)

 

$

208,563

 

$

(17,013)

Due in one year through five years

 

653,816

 

 

(32,469)

 

 

283,866

 

 

(21,319)

 

 

937,682

 

 

(53,788)

Due in five years through ten years

 

422,517

 

 

(19,392)

 

 

49,749

 

 

(2,034)

 

 

472,266

 

 

(21,426)

Due after ten years

 

121,295

 

 

(3,791)

 

 

72,394

 

 

(19,136)

 

 

193,689

 

 

(22,927)

Asset-backed securities

 

235,566

 

 

(4,768)

 

 

85,595

 

 

(930)

 

 

321,161

 

 

(5,698)

Mortgage-backed securities

 

488,143

 

 

(2,596)

 

 

56,945

 

 

(1,364)

 

 

545,088

 

 

(3,960)

Total fixed maturity securities

$

2,017,481

 

$

(67,958)

 

$

660,968

 

$

(56,854)

 

$

2,678,449

 

$

(124,812)

 

The aggregate market value and gross unrealized losses related to investments in an unrealized loss position at December 31, 2020 were $2,678.4 million and $124.8 million, respectively. The market value of securities for the single issuer whose securities comprised the largest unrealized loss position at December 31, 2020, did not exceed 0.7% of the overall market value of the Company’s fixed maturity securities. The market value of the securities for the issuer with the second largest unrealized loss comprised less than 0.1% of the Company’s fixed maturity securities. In addition, as indicated on the above table, there was no significant concentration of unrealized losses in any one market sector. The $68.0 million of unrealized losses related to fixed maturity securities that have been in an unrealized loss position for less than one year were generally comprised of domestic and foreign corporate securities and foreign government securities. Of these unrealized losses, $63.4 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. The $56.9 million of unrealized losses related to fixed maturity securities in an unrealized loss position for more than one year related primarily to domestic and foreign corporate securities, foreign government securities and agency residential mortgage-backed securities. Of these unrealized losses, $33.5 million were related to securities that were rated investment grade by at least one nationally recognized rating agency. There was no gross unrealized depreciation for mortgage-backed securities related to sub-prime and alt-A loans. In all instances, there were no projected cash flow shortfalls to recover the full book value of the investments and the related interest obligations. The mortgage-backed securities still have excess credit coverage and are current on interest and principal payments.

 

The components of net investment income are presented in the table below for the periods indicated:

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(Dollars in thousands)

2021

 

2020

 

2021

 

2020

Fixed maturities

$

134,157

 

$

136,104

 

$

423,335

 

$

407,946

Equity securities

 

3,774

 

 

4,402

 

 

12,105

 

 

11,585

Short-term investments and cash

 

82

 

 

494

 

 

1,035

 

 

4,356

Other invested assets:

 

 

 

 

 

 

 

 

 

 

 

Limited partnerships

 

138,718

 

 

88,778

 

 

493,017

 

 

22,092

Other

 

30,954

 

 

14,742

 

 

62,828

 

 

(1,291)

Gross investment income before adjustments

 

307,685

 

 

244,520

 

 

992,320

 

 

444,688

Funds held interest income (expense)

 

1,196

 

 

684

 

 

12,449

 

 

10,921

Future policy benefit reserve income (expense)

 

(272)

 

 

(291)

 

 

(733)

 

 

(805)

Gross investment income

 

308,609

 

 

244,913

 

 

1,004,036

 

 

454,804

Investment expenses

 

(15,850)

 

 

(10,680)

 

 

(43,769)

 

 

(34,688)

Net investment income

$

292,759

 

$

234,233

 

$

960,267

 

$

420,116

 

The Company records results from limited partnership investments on the equity method of accounting with changes in value reported through net investment income. The net investment income from limited partnerships is dependent upon the Company’s share of the net asset values of interests underlying each limited partnership. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. If the Company determines there has been a significant

10


 

decline in value of a limited partnership during this lag period, a loss will be recorded in the period in which the Company identifies the decline.

 

The Company had contractual commitments to invest up to an additional $2,648.1 million in limited partnerships and private placement loan securities at September 30, 2021. These commitments will be funded when called in accordance with the partnership and loan agreements, which have investment periods that expire, unless extended, through 2026.

 

The Company participates in a private placement liquidity sweep facility (“the facility”). The primary purpose of the facility is to enhance the Company’s return on its short-term investments and cash positions. The facility invests in high quality, short-duration securities and permits daily liquidity. The Company consolidates its participation in the facility. As of September 30, 2021, the market value of investments in the facility consolidated within the Company’s balance sheets was $429.7 million.

 

The components of net realized capital gains (losses) are presented in the tables below for the periods indicated:

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(Dollars in thousands)

2021

 

 

2020

 

2021

 

 

2020

Fixed maturity securities, market value:

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

$

(7,329)

 

$

6,196

 

$

(30,234)

 

$

(19,641)

Gains (losses) from sales

 

6,219

 

 

5,398

 

 

25,453

 

 

941

Fixed maturity securities, fair value:

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) from sales

 

-

 

 

(1,968)

 

 

-

 

 

(1,968)

Gains (losses) from fair value adjustments

 

-

 

 

3,339

 

 

-

 

 

1,944

Equity securities, fair value:

 

 

 

 

 

 

 

 

 

 

 

Gains (losses) from sales

 

(489)

 

 

(1,317)

 

 

9,504

 

 

(12,642)

Gains (losses) from fair value adjustments

 

(4,542)

 

 

96,673

 

 

128,039

 

 

114,364

Other invested assets

 

1,920

 

 

1,084

 

 

6,014

 

 

50

Short-term investments gain (loss)

 

-

 

 

798

 

 

13

 

 

1,215

Total net realized capital gains (losses)

$

(4,222)

 

$

110,203

 

$

138,789

 

$

84,263

 

 

 

 

 

 

 

 

 

 

 

 

(Some amounts may not reconcile due to rounding.)

 

 

 

 

 

 

 

 

 

 

 

 

 

Roll Forward of Allowance for Credit Losses

 

 

Three Months Ended September 30, 2021

 

Nine Months Ended September 30, 2021

 

 

 

 

 

 

Obligations of

 

 

 

 

 

 

 

 

 

 

 

Obligations of

 

 

 

 

 

 

 

 

 

 

 

 

U.S. States

 

Foreign

 

Foreign

 

 

 

 

 

 

 

U.S. States

 

Foreign

 

Foreign

 

 

 

 

Corporate

 

Asset-Backed

 

and Political

 

Government

 

Corporate

 

 

 

Corporate

 

Asset-Backed

 

and Political

 

Government

 

Corporate

 

 

 

 

Securities

 

Securities

 

Subdivisions

 

Securities

 

Securities

 

Total

 

Securities

 

Securities

 

Subdivisions

 

Securities

 

Securities

 

Total

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning Balance

 

$

(18,475)

 

$

(4,915)

 

$

-

 

$

-

 

$

(1,260)

 

$

(24,650)

 

$

(1,220)

 

$

-

 

$

-

 

$

(22)

 

$

(503)

 

$

(1,745)

Credit losses on securities where credit