The Company reported net income of $6,933,936 and $6,372,626, or $3.20 and $2.78 per share on a diluted basis in 2011 and 2010, respectively. Total revenues for 2011 increased 27.2% to $90,685,156 from $71,309,355 while expenses for 2011 increased 29.5% to $81,186,220 from $62,693,729. The increases in both revenues and expenses related primarily to an increase in business from markets with higher premium and commission rates.
Cash and cash equivalents provided by or used in non-operating activities have historically been purchases and proceeds from investing activities and repurchases of common stock and the issuance of dividends. Net cash provided by non-operating activities was $918,068 in 2011 and net cash used by non-operating activities was $4,842,691 in 2010. Compared with 2010, 2011 had a lower level of investment purchase activity offset by an increase in the repurchases of shares of common stock.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In May 2011, the FASB updated requirements for measuring and disclosing fair value information, resulting in common principles and requirements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and International Financial Reporting Standards (“IFRS”). For public entities, this guidance becomes effective during interim and annual periods beginning after December 15, 2011. Early application by public entities is not permitted. Management does not expect the adoption of this standard to have a material impact on the Company’s Consolidated Financial Statements.
The Company has designated approximately $42,288,000 and $41,892,000 of retained earnings as of December 31, 2011 and 2010, respectively, as appropriated to reflect the required statutory premium and supplemental reserves. See Note 8 for the tax treatment of the statutory premium reserve.
The following table presents, by level, the financial assets carried at fair value measured on a recurring basis as of December 31, 2011 and 2010. The table does not include cash on hand and also does not include assets which are measured at historical cost or any basis other than fair value. Level 3 assets are comprised solely of ARS.
The estimated weighted-average grant-date fair value of SARs granted for the years ended December 31 was as follows:
Combined capital and surplus on a statutory basis was $93,089,327 and $93,626,173 as of December 31, 2011 and 2010, respectively. Net income on a statutory basis was $6,416,684 and $5,797,068 for the twelve months ended December 31, 2011 and 2010, respectively.