UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2021
OR
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO |
Commission File Number 001-38945
VERICITY, INC.
(Exact name of Registrant as specified in its Charter)
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Delaware |
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46-2348863 |
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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8700 W. Bryn Mawr Avenue, Suite 900S, Chicago Illinois |
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60631 |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code: (312) 288-0073
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol |
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Name on each exchange on which registered |
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Common Stock, Par Value $0.001 per share |
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VERY |
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NASDAQ Capital Market |
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 ☒ 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). YES ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.
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Large accelerated filer |
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☐ |
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Accelerated filer |
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☐ |
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Non-accelerated filer |
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☒ |
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Smaller reporting company |
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☒ |
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Emerging growth company |
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☒ |
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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. ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒
The number of shares of Registrant’s Common Stock outstanding as of May 14, 2021 was 14,875,000.
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Page |
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PART I – |
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Item 1. |
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Financial Statements (Unaudited) (at March 31, 2021 and December 31, 2020 and for the Three Months Ended March 31, 2021 and 2020) |
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1 |
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2 |
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Interim Condensed Consolidated Statements of Comprehensive Income (Loss) |
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3 |
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Interim Condensed Consolidated Statements of Changes in Equity |
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4 |
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5 |
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Notes to the Interim Condensed Consolidated Financial Statements |
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6 |
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6 |
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6 |
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11 |
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12 |
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12 |
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14 |
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15 |
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19 |
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19 |
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19 |
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20 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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21 |
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Item 4. |
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32 |
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PART II – |
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33 |
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Item 1. |
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33 |
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Item 1A. |
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33 |
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Item 2. |
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33 |
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Item 3. |
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33 |
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Item 4. |
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33 |
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Item 5. |
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33 |
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Item 6. |
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34 |
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35 |
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Part 1. Financial Information
Item I. Financial Statements
Vericity, Inc.
Interim Condensed Consolidated Balance Sheets
(dollars in thousands)
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March 31, |
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December 31, |
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2021 |
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2020 |
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(Unaudited) |
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(Audited) |
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Assets |
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Investments: |
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Fixed maturities – available-for-sale – at fair value (amortized cost; $333,194 and $328,263) |
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$ |
354,717 |
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$ |
363,851 |
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Equity securities – at fair value (cost; $6,672 and $6,530) |
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4,646 |
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3,848 |
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Mortgage loans (net of valuation allowances of $136 and $141) |
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50,018 |
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50,427 |
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Policyholder loans |
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6,288 |
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6,414 |
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Other invested assets |
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880 |
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273 |
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Total investments |
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416,549 |
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424,813 |
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Cash, cash equivalents and restricted cash |
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12,878 |
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36,242 |
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Accrued investment income |
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2,505 |
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2,633 |
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Reinsurance recoverables (net of allowances of $131 and $131) |
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168,845 |
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158,015 |
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Deferred policy acquisition costs |
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87,656 |
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87,212 |
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Commissions and agent balances (net of allowances of $978 and $749) |
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25,741 |
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19,526 |
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Intangible assets |
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1,635 |
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1,635 |
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Deferred income tax assets, net |
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14,122 |
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10,926 |
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Other assets |
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29,408 |
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27,762 |
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Total assets |
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759,339 |
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768,764 |
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Liabilities and Shareholders' Equity |
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Liabilities |
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Future policy benefits and claims |
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388,151 |
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381,563 |
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Policyholder account balances |
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82,643 |
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83,869 |
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Other policyholder liabilities |
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41,251 |
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37,789 |
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Policy dividend obligations |
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12,355 |
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13,282 |
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Reinsurance liabilities and payables |
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6,495 |
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6,696 |
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Long-term debt |
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24,149 |
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24,933 |
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Short-term debt |
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4,575 |
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5,545 |
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Other liabilities |
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19,039 |
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19,854 |
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Total liabilities |
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578,658 |
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573,531 |
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Commitments and Contingencies (Note 6) |
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Shareholders' Equity |
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Common stock, $.001 par value, 30,000,000 shares authorized, 14,875,000 shares, issued and outstanding |
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15 |
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15 |
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Additional paid-in capital |
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39,840 |
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39,840 |
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Retained earnings |
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132,711 |
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138,777 |
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Accumulated other comprehensive income (loss) |
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8,115 |
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16,601 |
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Total shareholders' equity |
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180,681 |
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195,233 |
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Total liabilities and shareholders' equity |
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$ |
759,339 |
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$ |
768,764 |
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See notes to interim condensed consolidated financial statements
1
Vericity, Inc.
Interim Condensed Consolidated Statements of Operations
(dollars in thousands, except earnings per share)
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Three Months Ended March 31, |
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2021 |
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2020 |
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(Unaudited) |
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(Unaudited) |
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Revenues |
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Net insurance premiums |
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$ |
25,297 |
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$ |
30,056 |
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Net investment income |
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3,254 |
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3,572 |
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Net realized investment gains (losses) |
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1,517 |
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(3,057 |
) |
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Other-than-temporary-impairments (OTTI) |
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(2 |
) |
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(54 |
) |
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Earned commissions |
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10,622 |
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4,125 |
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Insurance lead sales |
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1,474 |
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1,588 |
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Other income |
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75 |
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83 |
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Total revenues |
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42,237 |
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36,313 |
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Benefits and expenses |
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Life, annuity, and health claim benefits |
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21,952 |
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20,761 |
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Interest credited to policyholder account balances |
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722 |
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783 |
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Operating costs and expenses |
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23,330 |
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23,529 |
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Amortization of deferred policy acquisition costs |
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3,240 |
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976 |
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Total benefits and expenses |
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49,244 |
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46,049 |
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(Loss) income before income tax |
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(7,007 |
) |
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(9,736 |
) |
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Income tax (benefit) expense |
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(941 |
) |
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(1,158 |
) |
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Net (loss) income |
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$ |
(6,066 |
) |
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$ |
(8,578 |
) |
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Earnings per share for the periods |
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Three Months Ended March 31, |
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2021 |
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2020 |
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(Unaudited) |
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(Unaudited) |
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Weighted average shares outstanding, basic and diluted |
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14,875,000 |
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14,875,000 |
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Basic earnings per share |
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$ |
(0.41 |
) |
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$ |
(0.58 |
) |
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Diluted earnings per share |
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$ |
(0.41 |
) |
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$ |
(0.58 |
) |
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See notes to interim condensed consolidated financial statements
2
Vericity, Inc.
Interim Condensed Consolidated Statements of Comprehensive Income (Loss)
(dollars in thousands)
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Three Months Ended March 31, |
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2021 |
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2020 |
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(Unaudited) |
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Net (loss) income |
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$ |
(6,066 |
) |
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$ |
(8,578 |
) |
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Other comprehensive income (loss), net of tax: |
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Net unrealized (losses) gains on investments |
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(8,486 |
) |
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(7,253 |
) |
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Total other comprehensive (loss) income |
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(8,486 |
) |
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(7,253 |
) |
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Total comprehensive (loss) income |
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$ |
(14,552 |
) |
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$ |
(15,831 |
) |
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See notes to interim condensed consolidated financial statements
3
Vericity, Inc.
Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity
(dollars in thousands)
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Three Months Ended March 31, |
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2021 |
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2020 |
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(Unaudited) |
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Common stock |
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Balance – beginning of period |
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$ |
15 |
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$ |
15 |
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Balance – end of period |
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$ |
15 |
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$ |
15 |
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Additional paid-in capital |
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Balance – beginning of period |
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$ |
39,840 |
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$ |
39,840 |
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Balance – end of period |
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$ |
39,840 |
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$ |
39,840 |
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Retained earnings |
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Balance – beginning of period |
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$ |
138,777 |
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$ |
163,805 |
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Net (loss) income |
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|
(6,066 |
) |
|
|
(8,578 |
) |
|
Balance – end of period |
|
$ |
132,711 |
|
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$ |
155,227 |
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Accumulated other comprehensive income (loss) |
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|
|
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|
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Balance – beginning of period |
|
$ |
16,601 |
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$ |
8,757 |
|
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Other comprehensive (loss) income |
|
|
(8,486 |
) |
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|
(7,253 |
) |
|
Balance – end of period |
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$ |
8,115 |
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$ |
1,504 |
|
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Total shareholders' equity |
|
$ |
180,681 |
|
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$ |
196,586 |
|
See notes to interim condensed consolidated financial statements
4
Vericity, Inc.
Interim Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
|
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Three Months Ended March 31, |
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|||||
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2021 |
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2020 |
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||
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(Unaudited) |
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|||||
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Cash flows from operating activities |
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Net (loss) income |
|
$ |
(6,066 |
) |
|
$ |
(8,578 |
) |
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Adjustments to reconcile net (loss)income to net cash provided (used) by operating activities: |
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|
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Depreciation and amortization and other non-cash items |
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|
805 |
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|
594 |
|
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Interest credited to policyholder account balances |
|
|
722 |
|
|
|
783 |
|
|
Deferred income tax |
|
|
(941 |
) |
|
|
(1,158 |
) |
|
Net realized investment losses (gains) |
|
|
(1,517 |
) |
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|
3,057 |
|
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Other-than-temporary-impairments |
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2 |
|
|
|
54 |
|
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Interest expense |
|
|
406 |
|
|
|
303 |
|
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Change in: |
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|
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|
|
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Equity securities |
|
|
(142 |
) |
|
|
(171 |
) |
|
Accrued investment income |
|
|
128 |
|
|
|
319 |
|
|
Reinsurance recoverables |
|
|
(10,830 |
) |
|
|
(7,401 |
) |
|
Deferred policy acquisition costs |
|
|
(444 |
) |
|
|
(3,459 |
) |
|
Commissions and agent balances |
|
|
(6,192 |
) |
|
|
(1,530 |
) |
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Other assets |
|
|
(843 |
) |
|
|
8,736 |
|
|
Insurance liabilities |
|
|
12,418 |
|
|
|
15,972 |
|
|
Other liabilities |
|
|
(1,058 |
) |
|
|
(7,607 |
) |
|
Net cash (used) by operating activities |
|
|
(13,552 |
) |
|
|
(86 |
) |
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Cash flows from investing activities |
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|
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Sales, maturities and repayments of: |
|
|
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|
|
|
|
|
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Fixed maturities |
|
|
19,566 |
|
|
|
10,717 |
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Short-term investments |
|
|
— |
|
|
|
29,800 |
|
|
Mortgage loans |
|
|
689 |
|
|
|
520 |
|
|
Purchases of: |
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|
|
|
|
|
|
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Fixed maturities |
|
|
(24,210 |
) |
|
|
(22,188 |
) |
|
Short-term investments |
|
|
— |
|
|
|
(250 |
) |
|
Mortgage loans |
|
|
(274 |
) |
|
|
(363 |
) |
|
Change in policyholder loans, net |
|
|
126 |
|
|
|
19 |
|
|
Other, net |
|
|
(1,644 |
) |
|
|
(1,878 |
) |
|
Net cash (used) provided by investing activities |
|
|
(5,747 |
) |
|
|
16,377 |
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
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Debt issued |
|
|
1,189 |
|
|
|
3,167 |
|
|
Debt repaid |
|
|
(3,350 |
) |
|
|
(1,901 |
) |
|
Deposits to policyholder account balances |
|
|
117 |
|
|
|
110 |
|
|
Withdrawals from policyholder account balances |
|
|
(2,021 |
) |
|
|
(2,303 |
) |
|
Net cash (used) by financing activities |
|
|
(4,065 |
) |
|
|
(927 |
) |
|
Net increase (decrease) in cash and cash equivalents |
|
|
(23,364 |
) |
|
|
15,364 |
|
|
Cash, cash equivalents and restricted cash – beginning of period |
|
|
36,242 |
|
|
|
37,842 |
|
|
Cash, cash equivalents and restricted cash – end of period |
|
$ |
12,878 |
|
|
$ |
53,206 |
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
Non-cash transactions: |
|
|
— |
|
|
|
— |
|
See notes to interim condensed consolidated financial statements
5
Vericity, Inc.
Notes to Interim Condensed Consolidated Financial Statements
(dollars in thousands)
Note 1 – Summary of Significant Accounting Policies
Description of Business
Vericity, Inc. (the Company) is a Delaware corporation organized to be the stock holding company for Members Holding Company (Members) and its subsidiaries. On August 7, 2019, the Company completed the initial public offering of 14,875,000 shares of its common stock at a price of $10.00 per share (the IPO). The IPO was conducted in connection with the conversion of Members Mutual Holding Company from mutual to stock form and the acquisition by the Company of all of the capital stock of Members following its conversion to stock form after its plan of conversion and amended and restated articles of incorporation were approved at a special meeting of eligible members on August 6, 2019 (the Conversion). As a result of the Conversion, the Company became the holding company for converted Members Mutual Holding Company and its indirect subsidiaries, including Fidelity Life Association (Fidelity Life) and Efinancial, LLC (Efinancial).
The Company operates as a holding company and currently has no other business operations. Fidelity Life is an Illinois‑domiciled life insurance company that was founded in 1896. Fidelity Life markets life insurance products through independent and affiliated distributors and is licensed in the District of Columbia and all states, except New York and Wyoming. Efinancial markets life and other products for non‑affiliated insurance companies and sells life products for Fidelity Life.
The accompanying interim condensed consolidated financial statements present the accounts of the Company and subsidiaries for the three months ended March 31, 2021 and March 31, 2020 and at March 31, 2021 and December 31, 2020. These interim condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report in the Form 10-K for the year ended December 31, 2020. The results of operations for the interim periods should not be considered indicative of results to be expected for the full year.
Basis of Presentation
These interim condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The unaudited interim condensed consolidated financial information furnished herein reflects all adjustments which are, in the opinion of management, necessary to fairly state the results for the interim periods presented. All such adjustments are of a normal recurring nature. All intercompany accounts and transactions have been eliminated in consolidation. The consolidated results of operations for the interim periods presented are not necessarily indicative of results for the full year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been omitted from this report, as is permitted by such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2020, and notes thereto, included in the Form 10-K.
Use of Estimates
The preparation of interim condensed consolidated 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. Actual results could differ from those estimates. The more significant estimates employed in the preparation of the interim condensed consolidated financial statements include the determination of the valuation of investments in fixed maturity and equity securities, investment impairments, the valuation of deferred tax assets, future policy benefits and other policyholder liabilities.
The Company continuously monitors its investment strategies and individual holdings with consideration of current and projected market conditions, the composition of the Company’s liabilities, projected liquidity and capital investment needs, and compliance with investment policies and state regulatory guidelines.
6
Fixed Maturities
The amortized cost, gross unrealized gains, gross unrealized losses, fair value, and OTTI loss included in accumulated other comprehensive income (AOCI) of fixed maturities available-for-sale are as follows:
|
|
|
March 31, 2021 |
|
|||||||||||||||||
|
Fixed maturities |
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
OTTI Losses |
|
|||||
|
U.S. government and agencies |
|
$ |
11,372 |
|
|
$ |
1,951 |
|
|
$ |
— |
|
|
$ |
13,323 |
|
|
$ |
— |
|
|
U.S. agency mortgage-backed |
|
|
19,137 |
|
|
|
1,175 |
|
|
|
(1 |
) |
|
|
20,311 |
|
|
|
— |
|
|
State and political subdivisions |
|
|
60,596 |
|
|
|
2,038 |
|
|
|
(1,247 |
) |
|
|
61,387 |
|
|
|
— |
|
|
Corporate and miscellaneous |
|
|
150,585 |
|
|
|
16,746 |
|
|
|
(832 |
) |
|
|
166,499 |
|
|
|
— |
|
|
Foreign government |
|
|
131 |
|
|
|
29 |
|
|
|
— |
|
|
|
160 |
|
|
|
— |
|
|
Residential mortgage-backed |
|
|
5,620 |
|
|
|
306 |
|
|
|
(34 |
) |
|
|
5,892 |
|
|
|
(394 |
) |
|
Commercial mortgage-backed |
|
|
23,882 |
|
|
|
1,024 |
|
|
|
(67 |
) |
|
|
24,839 |
|
|
|
— |
|
|
Asset-backed |
|
|
61,871 |
|
|
|
574 |
|
|
|
(139 |
) |
|
|
62,306 |
|
|
|
— |
|
|
Total fixed maturities |
|
$ |
333,194 |
|
|
$ |
23,843 |
|
|
$ |
(2,320 |
) |
|
$ |
354,717 |
|
|
$ |
(394 |
) |
|
|
|
December 31, 2020 |
|
|||||||||||||||||
|
Fixed maturities |
|
Amortized Cost |
|
|
Unrealized Gains |
|
|
Unrealized Losses |
|
|
Fair Value |
|
|
OTTI Losses |
|
|||||
|
U.S. government and agencies |
|
$ |
11,386 |
|
|
$ |
2,886 |
|
|
$ |
— |
|
|
$ |
14,272 |
|
|
$ |
— |
|
|
U.S. agency mortgage-backed |
|
|
21,015 |
|
|
|
1,461 |
|
|
|
— |
|
|
|
22,476 |
|
|
|
— |
|
|
State and political subdivisions |
|
|
57,646 |
|
|
|
3,798 |
|
|
|
(15 |
) |
|
|
61,429 |
|
|
|
— |
|
|
Corporate and miscellaneous |
|
|
143,242 |
|
|
|
26,069 |
|
|
|
(258 |
) |
|
|
169,053 |
|
|
|
— |
|
|
Foreign government |
|
|
131 |
|
|
|
45 |
|
|
|
— |
|
|
|
176 |
|
|
|
— |
|
|
Residential mortgage-backed |
|
|
6,060 |
|
|
|
388 |
|
|
|
(27 |
) |
|
|
6,421 |
|
|
|
(151 |
) |
|
Commercial mortgage-backed |
|
|
18,567 |
|
|
|
1,503 |
|
|
|
(53 |
) |
|
|
20,017 |
|
|
|
— |
|
|
Asset-backed |
|
|
70,216 |
|
|
|
605 |
|
|
|
(814 |
) |
|
|
70,007 |
|
|
|
(260 |
) |
|
Total fixed maturities |
|
$ |
328,263 |
|
|
$ |
36,755 |
|
|
$ |
(1,167 |
) |
|
$ |
363,851 |
|
|
$ |
(411 |
) |
Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Maturities of mortgage-backed and asset-backed securities may be substantially shorter than their contractual maturity because they may require monthly principal installments and such loans may prepay principal. The amortized cost and fair value of fixed maturities available-for-sale by contractual maturity, are presented in the following table:
|
|
|
March 31, 2021 |
|
|||||
|
|
|
Amortized Cost |
|
|
Fair Value |
|
||
|
Due in one year or less |
|
$ |
2,623 |
|
|
$ |
2,649 |
|
|
Due after one year through five years |
|
|
41,269 |
|
|
|
44,530 |
|
|
Due after five years through ten years |
|
|
52,401 |
|
|
|
56,178 |
|
|
Due after ten years |
|
|
126,391 |
|
|
|
138,010 |
|
|
Securities not due at a single maturity date — primarily mortgage and asset-backed |
|
|
110,510 |
|
|
|
113,350 |
|
|
Total fixed maturities |
|
$ |
333,194 |
|
|
$ |
354,717 |
|
Fixed maturities with a carrying value of $3,412 and $3,852 were on deposit with governmental authorities, as required by law at March 31, 2021 and December 31, 2020, respectively.
The Company’s fixed maturities portfolio was primarily composed of investment grade securities, defined as a security having a rating of Aaa, Aa, A, or Baa from Moody’s, AAA, AA, A, or BBB from Standard & Poor’s, or National Association of Insurance Commissioners (NAIC) rating of NAIC 1 or NAIC 2. Investment grade securities comprised 97.6% and 97.9% of the Company’s total fixed maturities portfolio at March 31, 2021 and December 31, 2020, respectively.
At March 31, 2021 and December 31, 2020, the Company had commitments to make investments in available-for-sale securities in the amount of $539 and $3,027, respectively.
7
Mortgage Loans
The Company makes investments in commercial mortgage loans. The Company, along with other investors, owns a pro rata share of each loan. The Company participates in 34 such investment instruments with ownership shares ranging from 0.6% to 30.0% of the trust at March 31, 2021. The Company owns a share of 291 mortgage loans with an average loan balance of $172 and a maximum exposure related to any single loan of $555. Mortgage loan holdings are diversified by geography and property type as follows:
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
||||||||||
|
|
|
Gross Carrying Value |
|
|
% of Total |
|
|
Gross Carrying Value |
|
|
% of Total |
|
||||
|
Property Type: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
|
$ |
15,925 |
|
|
|
31.7 |
% |
|
$ |
16,252 |
|
|
|
32.1 |
% |
|
Office |
|
|
12,335 |
|
|
|
24.6 |
% |
|
|
12,493 |
|
|
|
24.7 |
% |
|
Industrial |
|
|
8,011 |
|
|
|
16.0 |
% |
|
|
8,095 |
|
|
|
16.0 |
% |
|
Mixed use |
|
|
5,954 |
|
|
|
11.9 |
% |
|
|
6,014 |
|
|
|
11.9 |
% |
|
Apartments |
|
|
3,689 |
|
|
|
7.3 |
% |
|
|
3,439 |
|
|
|
6.8 |
% |
|
Medical office |
|
|
3,096 |
|
|
|
6.2 |
% |
|
|
3,119 |
|
|
|
6.2 |
% |
|
Other |
|
|
1,144 |
|
|
|
2.3 |
% |
|
|
1,156 |
|
|
|
2.3 |
% |
|
Gross carrying value of mortgage loans |
|
|
50,154 |
|
|
|
100.0 |
% |
|
|
50,568 |
|
|
|
100.0 |
% |
|
Valuation allowance |
|
|
(136 |
) |
|
|
|
|
|
|
(141 |
) |
|
|
|
|
|
Net carrying value of mortgage loans |
|
$ |
50,018 |
|
|
|
|
|
|
$ |
50,427 |
|
|
|
|
|
|
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
||||||||||
|
|
|
Gross Carrying Value |
|
|
% of Total |
|
|
Gross Carrying Value |
|
|
% of Total |
|
||||
|
U.S. Region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
West South Central |
|
$ |
11,913 |
|
|
|
23.7 |
% |
|
$ |
11,780 |
|
|
|
23.3 |
% |
|
East North Central |
|
|
12,032 |
|
|
|
24.0 |
% |
|
|
12,105 |
|
|
|
23.9 |
% |
|
South Atlantic |
|
|
10,801 |
|
|
|
21.5 |
% |
|
|
10,908 |
|
|
|
21.6 |
% |
|
West North Central |
|
|
3,941 |
|
|
|
7.9 |
% |
|
|
3,981 |
|
|
|
7.9 |
% |
|
Mountain |
|
|
4,139 |
|
|
|
8.3 |
% |
|
|
4,404 |
|
|
|
8.7 |
% |
|
Middle Atlantic |
|
|
2,806 |
|
|
|
5.6 |
% |
|
|
2,824 |
|
|
|
5.6 |
% |
|
East South Central |
|
|
3,025 |
|
|
|
6.0 |
% |
|
|
3,060 |
|
|
|
6.1 |
% |
|
New England |
|
|
89 |
|
|
|
0.2 |
% |
|
|
91 |
|
|
|
0.2 |
% |
|
Pacific |
|
|
1,408 |
|
|
|
2.8 |
% |
|
|
1,415 |
|
|
|
2.8 |
% |
|
Gross carrying value of mortgage loans |
|
|
50,154 |
|
|
|
100.0 |
% |
|
|
50,568 |
|
|
|
100.0 |
% |
|
Valuation allowance |
|
|
(136 |
) |
|
|
|
|
|
|
(141 |
) |
|
|
|
|
|
Net carrying value of mortgage loans |
|
$ |
50,018 |
|
|
|
|
|
|
$ |
50,427 |
|
|
|
|
|
During the three months ended March 31, 2021 and March 31, 2020, $274 and $363 of new mortgage loans were purchased, respectively, which did not include second lien mortgage loans. There were no taxes, assessments, or any amounts advanced that were not included in the mortgage loan balances at March 31, 2021 and December 31, 2020. At March 31, 2021 and December 31, 2020, the Company had 5 and 6 mortgage loans with a total carrying value of $1,361 and $1,408 that were in a restructured status, respectively. There were no impairments for mortgage loans at March 31, 2021 and December 31, 2020.
The changes in the valuation allowance for commercial mortgage loans were as follows:
|
|
|
Three Months Ended March 31, 2021 |
|
|
Year Ended December 31, 2020 |
|
||
|
Beginning balance |
|
$ |
141 |
|
|
$ |
53 |
|
|
Net (decrease) increase in valuation allowance |
|
|
(5 |
) |
|
|
88 |
|
|
Ending balance |
|
$ |
136 |
|
|
$ |
141 |
|
At March 31, 2021 and December 31, 2020, the Company had no mortgage loans that were on nonaccrual status.
At March 31, 2021 and December 31, 2020, the Company had commitments to make investments in mortgage loans in the amount of $1,376 and $1,299, respectively.
8
Net Investment Income
The sources of net investment income are as follows:
|
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
|
2021 |
|
|
2020 |
|
|
||
|
Interest from: |
|
|
|
|
|
|
|
||