The Company leases approximately 1,300 square feet of office space on the second floor of a building at 7200 West Camino Real, Boca Raton, Florida 33433. This lease expires on September 30, 1998.
Net investment income increased $.8 million, or 7.9%, to $11.6 in 1995 from $10.8 million in 1994, due primarily to the 8.5% growth of the weighted average portfolio base. This increase was partially offset by a slight decline in the average yield.
Current and future insurance benefits increased $0.2 million, or 34.0%, to $0.9 million in 1995 from $0.7 in 1994. This increase reflects the combined impact of the discontinuation of the Medicare supplement and accelerated life products in 1994 and the increasing value of the life contingent polices (primarily due to interest) issued as annuity settlement options.
Income taxes decreased $0.2 in 1994, or 54.0%, to $0.2 million in 1994 from $0.4 million in 1993.
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1995 AND 1994 (Dollars in thousands)
Loss before income taxes (517) (2,973) (498) Income tax expense (benefit) (136) 198 366 ------ ------ ------ Loss before cumulative effect of change in accounting principle (381) (3,171) (864)
INVESTORS INSURANCE GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1995
Cost in excess of net assets of businesses acquired relates to IIG's acquisition of IIC and Investors in 1989. Prior to December 1, 1994, this balance was being amortized over 40 years on the straightline method. As of December 1, 1994, management changed its amortization estimate for this asset to a total of 20 years and revised the amortization schedule accordingly. The Company determines the recoverability of cost in excess of net assets of businesses acquired by ensuring that the gross profit stream, after recovering DAC, exceeds the balance of this asset.
Net income (loss) per common share is based on the weighted average number of shares and share equivalents outstanding during the year.
The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash and cash equivalents, accrued investment income and accrued expenses. Fair values were assumed to approximate carrying values for these financial instruments since they are short term in nature and their carrying amounts approximate fair values or they are receivable or payable on demand. The fair value of the Company's investment securities were based on quoted market values, if available. If quoted market prices were not available, fair values were estimated using quoted market prices for similar securities. Since the ultimate cash flow related to the note payable is not determinable, calculation of its theoretical market value is not practicable.
Fair values for investments are based on quoted market prices, except for the common stock of Jupiter Tequesta National Bank ("Jupiter") in 1994. Jupiter was a small local bank located in Jupiter, Florida whose stock was not actively traded on any major exchange. Prior to December 31, 1994, Jupiter's fair value was considered to be its purchase cost which approximated the book value of its shares. The fair value at December 31, 1994 was based upon a definitive agreement of sale with 1st United Bancorp ("FUB") of Boca Raton, Florida, whereby FUB acquired all the outstanding stock of Jupiter in 1995. The purchase price, which translates to approximately $16.36 per share, was used as the fair value at December 31, 1994. The sale was completed in April 1995.
Impact of liabilities (995) 6,800 (7,795) 10,831 - ----- ----- ------- ------ ----
Year ended December 31, ----------------------- 1995 1994 1993 ---- ---- ---- Current income tax expense (benefit) $ (136) $ 198 $ 366 Deferred income taxes: Change in net deferred tax asset 190 (2,015) 596 Change in valuation allowance (190) 2,015 (596) ---- ---- ----
Total liabilities 8,300 16,998 ------- ------- Shareholders' Equity (Capital Deficit): Common stock 1,384 1,383 Additional paid-in capital 3,652 3,651 Net unrealized investment gains (losses) 7,060 (11,051) Accumulated deficit (10,660) (10,301) Treasury stock (8) - ------- ------- Total Shareholders' Equity (Capital Deficit) 1,428 (16,318) ------- ------- Total Liabilities and Shareholders' Equity (Capital Deficit) $ 9,728 $ 680 ======= ======