The Company’s net income was $846,361, $603,668 and $1,953,728 for the years ended December 31 2014, 2013 and 2012, respectively.
The Company receives its revenue primarily from premium earned derived from the insurance company operations, commission and fee income generated from the insurance agency operations, finance charges and fee income from the premium finance operations, and investment income from cash generated primarily from the insurance company operation. The insurance company operation generates approximately 90% of the Company’s total revenue. The Company’s remaining operations constitute a variety of specialty insurance services, each with unique characteristics and individually not material to consolidated revenues.
The following is a reconciliation of net written premium to net earned premium for the three years ended 2014:
The Company’s other operations generate commissions and fees from various insurance products. The events that have the most significant economic impact are as follows:
Loans issued decreased by 3 (less than 1%) during 2014 when compared to 2013 and increased by 17 (less than 1%) during 2013 when compared to 2012. The average premium financed by AAC was $3,492, $3,276 and $3,039 in 2014, 2013 and 2012, respectively. During 2014 and 2013, 42% of all Unifax policies were financed and 83% of those policies were financed by AAC.
On September 7, 2014, a lease from a single tenant occupying approximately 32,403 square feet of the building has ended. Since the Company intends to occupy most of this recently vacated space, that space is not available for rent and will result in decreased future rental income. The increase in rental income from year ended December 31, 2013 to December 31, 2014 is due primarily to the fact that the Company had rental income for approximately 3 months in 2013 compared to 12 months in 2014.
Any adjustments to reserves are reflected in the operating results of the periods in which they are made. Management believes that the aggregate reserves for losses and loss adjustment expenses make reasonable provision for all unpaid loss and loss adjustment expenses of the Company.
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31,
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unico American Corporation and subsidiaries as of December 31, 2014 and 2013, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.
The Company and its wholly owned subsidiaries file consolidated federal and state income tax returns. Pursuant to the tax allocation agreement, the Company’s wholly owned subsidiaries, Crusader Insurance Company (Crusader) and American Acceptance Corporation (AAC), are allocated taxes or tax credits in the case of losses, at current corporate rates based on their own taxable income or loss. The Company files income tax returns under U.S. federal and various state jurisdictions. The Company is subject to examination by U.S. federal income tax authorities for tax returns filed starting at taxable year 2011 and California state income tax authorities for tax returns filed starting at taxable year 2010. There are no ongoing examinations of income tax returns by federal or state tax authorities.