Document
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UNITED STATES |
SECURITIES AND EXCHANGE COMMISSION |
Washington, D.C. 20549 |
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FORM 10-Q |
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x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF |
THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended September 30, 2017
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o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF |
THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from __________ to __________ |
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Commission File Number: 000-55522 |
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NATIONAL WESTERN LIFE GROUP, INC. |
(Exact name of Registrant as specified in its charter) |
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DELAWARE | 47-3339380 |
(State of Incorporation) | (I.R.S. Employer Identification Number) |
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850 EAST ANDERSON LANE | |
AUSTIN, TEXAS 78752-1602 | (512) 836-1010 |
(Address of Principal Executive Offices) | (Telephone Number) |
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 o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted 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 and post such files). : Yes x No o
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 definition of "accelerated filer." "large accelerated filer," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer x Non-accelerated filer (Do not check if a smaller reporting company) o Smaller reporting company o Emerging growth company o
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of November 2, 2017, the number of shares of Registrant's common stock outstanding was: Class A – 3,436,166 and Class B - 200,000.
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TABLE OF CONTENTS |
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September 30, 2017 (Unaudited) and December 31, 2016 | |
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For the Three Months Ended September 30, 2017 and 2016 (Unaudited) | |
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For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) | |
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For the Three Months Ended September 30, 2017 and 2016 (Unaudited) | |
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For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) | |
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For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) | |
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For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) | |
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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| (Unaudited) | | |
ASSETS | September 30, 2017 | | December 31, 2016 |
| | | |
Investments: | | | |
Securities held to maturity, at amortized cost (fair value: $7,498,922 and $7,337,611) | $ | 7,264,995 |
| | 7,159,259 |
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Securities available for sale, at fair value (cost: $2,942,594 and $2,991,042) | 3,045,603 |
| | 3,060,363 |
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Mortgage loans, net of allowance for possible losses ($650 and $650) | 188,623 |
| | 174,534 |
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Policy loans | 57,466 |
| | 58,699 |
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Derivatives, index options | 163,536 |
| | 120,644 |
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Other long-term investments | 48,933 |
| | 53,954 |
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Total investments | 10,769,156 |
| | 10,627,453 |
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Cash and cash equivalents | 170,560 |
| | 51,247 |
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Deferred policy acquisition costs | 813,642 |
| | 835,194 |
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Deferred sales inducements | 134,636 |
| | 147,111 |
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Accrued investment income | 103,038 |
| | 99,245 |
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Federal income tax receivable | 7,858 |
| | — |
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Other assets | 139,401 |
| | 134,731 |
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Total assets | $ | 12,138,291 |
| | 11,894,981 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
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| (Unaudited) | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | September 30, 2017 | | December 31, 2016 |
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LIABILITIES: | | | |
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Future policy benefits: | | | |
Universal life and annuity contracts | $ | 9,856,403 |
| | 9,722,313 |
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Traditional life reserves | 135,366 |
| | 136,782 |
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Other policyholder liabilities | 137,072 |
| | 143,391 |
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Deferred Federal income tax liability | 56,016 |
| | 64,990 |
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Federal income tax payable | — |
| | 789 |
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Other liabilities | 150,752 |
| | 104,888 |
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Total liabilities | 10,335,609 |
| | 10,173,153 |
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COMMITMENTS AND CONTINGENCIES (Note 8) |
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STOCKHOLDERS’ EQUITY: | |
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Common stock: | |
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Class A - $.01 par value; 7,500,000 shares authorized; 3,436,166 issued and outstanding in 2017 and 2016 | 34 |
| | 34 |
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Class B - $.01 par value; 200,000 shares authorized, issued, and outstanding in 2017 and 2016 | 2 |
| | 2 |
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Additional paid-in capital | 41,716 |
| | 41,716 |
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Accumulated other comprehensive income | 20,572 |
| | 10,552 |
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Retained earnings | 1,740,358 |
| | 1,669,524 |
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Total stockholders’ equity | 1,802,682 |
| | 1,721,828 |
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Total liabilities and stockholders' equity | $ | 12,138,291 |
| | 11,894,981 |
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Note: The Condensed Consolidated Balance Sheet at December 31, 2016 has been derived from the audited Consolidated Financial Statements as of that date.
See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Three Months Ended September 30, 2017 and 2016
(Unaudited)
(In thousands, except per share amounts)
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| 2017 | | 2016 |
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Premiums and other revenues: | | | |
Universal life and annuity contract charges | $ | 40,268 |
| | 40,333 |
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Traditional life premiums | 5,285 |
| | 4,631 |
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Net investment income | 151,691 |
| | 126,981 |
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Other revenues | 4,672 |
| | 4,476 |
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Net realized investment gains (losses): | |
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Total other-than-temporary impairment (“OTTI”) gains (losses) | 26 |
| | 27 |
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Portion of OTTI (gains) losses recognized in other comprehensive income | (26 | ) | | (27 | ) |
Net OTTI losses recognized in earnings | — |
| | — |
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Other net investment gains (losses) | 2,074 |
| | 5,426 |
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Total net realized investment gains (losses) | 2,074 |
| | 5,426 |
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Total revenues | 203,990 |
| | 181,847 |
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Benefits and expenses: | |
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Life and other policy benefits | 21,015 |
| | 17,430 |
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Amortization of deferred policy acquisition costs | 18,722 |
| | 24,395 |
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Universal life and annuity contract interest | 107,799 |
| | 67,776 |
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Other operating expenses | 22,596 |
| | 23,595 |
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Total benefits and expenses | 170,132 |
| | 133,196 |
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Earnings before Federal income taxes | 33,858 |
| | 48,651 |
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Federal income taxes | 12,045 |
| | 14,915 |
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Net earnings | $ | 21,813 |
| | 33,736 |
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Basic earnings per share: | |
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Class A | $ | 6.17 |
| | $ | 9.54 |
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Class B | $ | 3.08 |
| | $ | 4.77 |
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Diluted earnings per share: | |
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Class A | $ | 6.17 |
| | $ | 9.54 |
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Class B | $ | 3.08 |
| | $ | 4.77 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the Nine Months Ended September 30, 2017 and 2016
(Unaudited)
(In thousands, except per share amounts)
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| 2017 | | 2016 |
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Premiums and other revenues: | | | |
Universal life and annuity contract charges | $ | 122,329 |
| | 123,791 |
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Traditional life premiums | 13,639 |
| | 13,721 |
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Net investment income | 466,045 |
| | 335,732 |
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Other revenues | 13,714 |
| | 14,050 |
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Net realized investment gains (losses): | |
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Total other-than-temporary impairment (“OTTI”) gains (losses) | 69 |
| | 80 |
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Portion of OTTI (gains) losses recognized in other comprehensive income | (69 | ) | | (80 | ) |
Net OTTI losses recognized in earnings | — |
| | — |
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Other net investment gains (losses) | 10,906 |
| | 10,589 |
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Total net realized investment gains (losses) | 10,906 |
| | 10,589 |
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Total revenues | 626,633 |
| | 497,883 |
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Benefits and expenses: | |
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Life and other policy benefits | 58,626 |
| | 48,571 |
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Amortization of deferred policy acquisition costs | 85,992 |
| | 88,581 |
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Universal life and annuity contract interest | 299,862 |
| | 179,592 |
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Other operating expenses | 74,031 |
| | 66,306 |
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Total benefits and expenses | 518,511 |
| | 383,050 |
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Earnings before Federal income taxes | 108,122 |
| | 114,833 |
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Federal income taxes | 37,288 |
| | 37,553 |
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Net earnings | $ | 70,834 |
| | 77,280 |
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Basic earnings per share: | |
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Class A | $ | 20.03 |
| | $ | 21.85 |
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Class B | $ | 10.02 |
| | $ | 10.93 |
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Diluted earnings per share: | |
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Class A | $ | 20.03 |
| | $ | 21.85 |
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Class B | $ | 10.02 |
| | $ | 10.93 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended September 30, 2017 and 2016
(Unaudited)
(In thousands)
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| 2017 | | 2016 |
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Net earnings | $ | 21,813 |
| | 33,736 |
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Other comprehensive income (loss), net of effects of deferred costs and taxes: | |
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Unrealized gains (losses) on securities: | |
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Net unrealized holding gains (losses) arising during period | 2,212 |
| | 2,824 |
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Net unrealized liquidity gains (losses) | 9 |
| | 9 |
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Reclassification adjustment for net amounts included in net earnings | (988 | ) | | (1,398 | ) |
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Net unrealized gains (losses) on securities | 1,233 |
| | 1,435 |
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Foreign currency translation adjustments | 166 |
| | 22 |
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Benefit plans: | |
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Amortization of net prior service cost and net gain (loss) | (910 | ) | | (283 | ) |
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Other comprehensive income (loss) | 489 |
| | 1,174 |
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Comprehensive income (loss) | $ | 22,302 |
| | 34,910 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Nine Months Ended September 30, 2017 and 2016
(Unaudited)
(In thousands)
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| 2017 | | 2016 |
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Net earnings | $ | 70,834 |
| | 77,280 |
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Other comprehensive income, net of effects of deferred costs and taxes: | |
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Unrealized gains (losses) on securities: | |
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Net unrealized holding gains (losses) arising during period | 15,479 |
| | 48,927 |
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Net unrealized liquidity gains (losses) | 22 |
| | 27 |
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Reclassification adjustment for net amounts included in net earnings | (2,746 | ) | | (1,971 | ) |
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Net unrealized gains (losses) on securities | 12,755 |
| | 46,983 |
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Foreign currency translation adjustments | (5 | ) | | (81 | ) |
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Benefit plans: | |
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Amortization of net prior service cost and net gain (loss) | (2,730 | ) | | (850 | ) |
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Other comprehensive income (loss) | 10,020 |
| | 46,052 |
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Comprehensive income (loss) | $ | 80,854 |
| | 123,332 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) (In thousands) |
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| 2017 | | 2016 |
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Common stock: | | | |
Balance at beginning of period | $ | 36 |
| | 36 |
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Shares exercised under stock option plan | — |
| | — |
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Balance at end of period | 36 |
| | 36 |
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Additional paid-in capital: | |
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Balance at beginning of period | 41,716 |
| | 41,716 |
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Shares exercised under stock option plan | — |
| | — |
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Balance at end of period | 41,716 |
| | 41,716 |
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Accumulated other comprehensive income: | |
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Unrealized gains on non-impaired securities: | |
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Balance at beginning of period | 22,813 |
| | 12,347 |
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Change in unrealized gains (losses) during period, net of tax | 12,733 |
| | 46,956 |
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Balance at end of period | 35,546 |
| | 59,303 |
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Unrealized losses on impaired held to maturity securities: | |
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Balance at beginning of period | (203 | ) | | (240 | ) |
Amortization | 45 |
| | 52 |
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Other-than-temporary impairments, non-credit, net of tax | — |
| | — |
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Additional credit loss on previously impaired securities | — |
| | — |
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Change in shadow deferred policy acquisition costs | (23 | ) | | (25 | ) |
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Balance at end of period | (181 | ) | | (213 | ) |
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Unrealized losses on impaired available for sale securities: | |
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Balance at beginning of period | (1 | ) | | (1 | ) |
Other-than-temporary impairments, non-credit, net of tax | — |
| | — |
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Change in shadow deferred policy acquisition costs | — |
| | — |
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Recoveries, net of tax | — |
| | — |
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Balance at end of period | (1 | ) | | (1 | ) |
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| Continued on Next Page | |
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NATIONAL WESTERN LIFE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(continued) For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) (In thousands) |
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| 2017 | | 2016 |
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Foreign currency translation adjustments: | |
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Balance at beginning of period | 2,661 |
| | 2,825 |
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Change in translation adjustments during period | (5 | ) | | (81 | ) |
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Balance at end of period | 2,656 |
| | 2,744 |
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Benefit plan liability adjustment: | |
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Balance at beginning of period | (14,718 | ) | | (14,602 | ) |
Amortization of net prior service cost and net loss, net of tax | (2,730 | ) | | (850 | ) |
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Balance at end of period | (17,448 | ) | | (15,452 | ) |
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Accumulated other comprehensive income at end of period | 20,572 |
| | 46,381 |
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Retained earnings: | | | |
Balance at beginning of period | 1,669,524 |
| | 1,569,905 |
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Net earnings | 70,834 |
| | 77,280 |
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Stockholder dividends | — |
| | — |
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Balance at end of period | 1,740,358 |
| | 1,647,185 |
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Total stockholders' equity | $ | 1,802,682 |
| | $ | 1,735,318 |
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See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) (In thousands) |
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| 2017 | | 2016 |
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Cash flows from operating activities: | | | |
Net earnings | $ | 70,834 |
| | 77,280 |
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Adjustments to reconcile net earnings to net cash from operating activities: | |
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Universal life and annuity contract interest | 299,862 |
| | 179,592 |
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Surrender charges and other policy revenues | (33,682 | ) | | (34,955 | ) |
Realized (gains) losses on investments | (10,905 | ) | | (10,589 | ) |
Accretion/amortization of discounts and premiums, investments | 308 |
| | 51 |
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Depreciation and amortization | 7,379 |
| | 5,823 |
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(Increase) decrease in value of derivatives | (138,552 | ) | | (8,307 | ) |
(Increase) decrease in deferred policy acquisition and sales inducement costs | 19,895 |
| | 10,799 |
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(Increase) decrease in accrued investment income | (3,793 | ) | | (1,618 | ) |
(Increase) decrease in other assets | (7,762 | ) | | (3,683 | ) |
Increase (decrease) in liabilities for future policy benefits | 6,616 |
| | 3,408 |
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Increase (decrease) in other policyholder liabilities | (6,319 | ) | | (5,175 | ) |
Increase (decrease) in Federal income taxes liability | (8,647 | ) | | 21,661 |
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Increase (decrease) in deferred Federal income tax | (14,370 | ) | | 10,587 |
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Increase (decrease) in other liabilities | 12,530 |
| | 1,352 |
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Net cash provided by operating activities | 193,394 |
| | 246,226 |
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Cash flows from investing activities: | |
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Proceeds from sales of: | |
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Securities held to maturity | — |
| | — |
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Securities available for sale | 22,184 |
| | 16,087 |
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Other investments | 4,943 |
| | 3,947 |
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Proceeds from maturities and redemptions of: | |
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Securities held to maturity | 303,081 |
| | 304,190 |
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Securities available for sale | 222,841 |
| | 134,208 |
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Derivatives, index options | 151,298 |
| | 13,273 |
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Property and equipment | 2,731 |
| | — |
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Purchases of: | |
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Securities held to maturity | (377,821 | ) | | (231,804 | ) |
Securities available for sale | (192,670 | ) | | (229,932 | ) |
Derivatives, index options | (55,780 | ) | | (57,224 | ) |
Other investments | (329 | ) | | (27,525 | ) |
Property and equipment | (1,697 | ) | | — |
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Net change in short-term investments | — |
| | (14,972 | ) |
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| Continued on Next Page | |
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NATIONAL WESTERN LIFE GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) For the Nine Months Ended September 30, 2017 and 2016 (Unaudited) (In thousands) |
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| 2017 | | 2016 |
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Principal payments on mortgage loans | 24,199 |
| | 17,295 |
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Cost of mortgage loans acquired | (38,166 | ) | | (55,796 | ) |
Decrease (increase) in policy loans | 1,233 |
| | 2,739 |
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Net cash provided by/(used in) investing activities | 66,047 |
| | (125,514 | ) |
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Cash flows from financing activities: | |
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Deposits to account balances for universal life and annuity contracts | 546,966 |
| | 626,083 |
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Return of account balances on universal life and annuity contracts | (687,087 | ) | | (675,389 | ) |
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Net cash provided by (used in) financing activities | (140,121 | ) | | (49,306 | ) |
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Effect of foreign exchange | (7 | ) | | (125 | ) |
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Net increase (decrease) in cash and cash equivalents | 119,313 |
| | 71,281 |
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Cash and cash equivalents at beginning of period | 51,247 |
| | 106,007 |
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Cash and cash equivalents at end of period | $ | 170,560 |
| | $ | 177,288 |
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SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |
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Cash paid (received) during the period for: | |
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Interest | $ | 30 |
| | 33 |
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Income taxes | $ | 60,304 |
| | 5,032 |
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Noncash operating activities: | | | |
Deferral of sales inducements | $ | (9,696 | ) | | (7,146 | ) |
See accompanying notes to Condensed Consolidated Financial Statements (unaudited).
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
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(1) | CONSOLIDATION AND BASIS OF PRESENTATION |
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for annual financial statements. In the opinion of management, the accompanying Condensed Consolidated Financial Statements contain all adjustments necessary to present fairly the financial position of National Western Life Group, Inc. ("NWLGI") and its wholly owned subsidiaries (“Company”) as of September 30, 2017, and the results of its operations and its cash flows for the three and nine months ended September 30, 2017 and September 30, 2016. Such adjustments are of a normal recurring nature. The results of operations for the nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the full year. It is recommended that these Condensed Consolidated Financial Statements be read in conjunction with the audited consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 which is accessible free of charge through the Company's internet site at www.nwlgi.com or the Securities and Exchange Commission internet site at www.sec.gov. The Condensed Consolidated Balance Sheet at December 31, 2016 has been derived from the audited consolidated financial statements as of that date.
The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of NWLGI and its wholly owned subsidiaries: National Western Life Insurance Company ("NWLIC" or "National Western"), Regent Care San Marcos Holdings, LLC, NWL Investments, Inc., and NWL Services, Inc. National Western's wholly owned subsidiaries include The Westcap Corporation, NWL Financial, Inc., NWLSM, Inc., and Braker P III, LLC. Where comments or disclosures are made specifically in reference to the insurance operations of National Western, the "company" is used in order to distinguish such comments from the consolidated entity. All significant intercorporate transactions and accounts have been eliminated in consolidation.
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates in the accompanying Condensed Consolidated Financial Statements include: (1) liabilities for future policy benefits, (2) valuation of derivative instruments, (3) recoverability and amortization of deferred policy acquisition costs, (4) valuation allowances for deferred tax assets, (5) other-than-temporary impairment losses on debt securities, (6) commitments and contingencies, and (7) valuation allowances for mortgage loans and real estate.
The table below shows the unrealized gains and losses on available-for-sale securities that were reclassified out of accumulated other comprehensive income for the three and nine months ended September 30, 2017 and September 30, 2016.
|
| | | | | | | | | | | | | |
Affected Line Item in the Statements of Earnings | | Amount Reclassified From Accumulated Other Comprehensive Income | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2017 | | 2016 | | 2017 | | 2016 |
| | (In thousands) |
| | | | | | | | |
Other net investment gains (losses) | | $ | 1,519 |
| | 2,151 |
| | 4,224 |
| | 3,033 |
|
Net OTTI losses recognized in earnings | | — |
| | — |
| | — |
| | — |
|
Earnings before Federal income taxes | | 1,519 |
| | 2,151 |
| | 4,224 |
| | 3,033 |
|
Federal income taxes | | 532 |
| | 753 |
| | 1,478 |
| | 1,062 |
|
| | | | | | | | |
Net earnings | | $ | 987 |
| | 1,398 |
| | 2,746 |
| | 1,971 |
|
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| |
(2) | NEW ACCOUNTING PRONOUNCEMENTS |
In January 2016, the FASB released accounting standards update (ASU) 2016-01, Recognition and Measurement of Financial Assets and Liabilities. The main provisions of the update are to eliminate the available for sale classification of accounting for equity securities and to adjust the fair value disclosures for financial instruments carried at amortized costs such that the disclosed fair values represent an exit price as opposed to an entry price. The provisions of this update will require that equity securities be carried at fair market value on the balance sheet and any periodic changes in value will be adjustments to the income statement. The provisions of this update become effective for interim and annual periods beginning after December 15, 2017. The Company does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.
In June 2016, the FASB released ASU 2016-13, Financial Instruments - Credit Losses, which revises the credit loss recognition criteria for certain financial assets measured at amortized cost. The new guidance replaces the existing incurred loss recognition model with an expected loss recognition model. The objective of the expected credit loss model is for the reporting entity to recognize its estimate of expected credit losses for affected financial assets in a valuation allowance deducted from the amortized cost basis of the related financial assets that results in presenting the net carrying value of the financial assets at the amount expected to be collected. The guidance is effective for interim and annual periods beginning after December 15, 2019, and for most affected instruments must be adopted using a modified retrospective approach, with a cumulative effect adjustment recorded to beginning retained income. The Company is currently evaluating this guidance.
In March 2017, the FASB issued ASU 2017-08, Receivables - Nonrefundable Fees and Other Costs: Premium Amortization on Purchased Callable Debt Securities, which amends the amortization period for certain purchased callable debt securities held at a premium. The amortization period for premiums is being shortened to the earliest call date. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. The Company is currently evaluating this guidance.
In May 2017, the FASB released ASU 2017-09, Compensation - Stock Compensation. The update provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Accounting Standards Codification (ASC) Topic 718. An entity shall account for the effects of a modification described in ASC paragraphs 718-20-35-3 through 35-9, unless all the following are met: (1) The fair value of the modified award is the same as the fair value of the original award immediately before the original award is modified; (2) The vesting conditions of the modified award are the same as the vesting conditions of the original award immediately before the original award is modified; and (3) The classification of the modified award as an equity instrument or a liability instrument is the same as the classification of the original award immediately before the original award is modified. The provisions of this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2017. The Company does not expect a material effect on the results of operations or financial position with the adoption of this ASU.
In July 2017, the FASB released ASU 2017-11, Earnings Per Share; Distinguishing Liabilities from Equity; and, Derivatives and Hedging. This update includes: (I) Accounting for Certain Financial Instruments with Down Round Features, and (II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interest with a Scope Exception. Part I of this update changes the classification analysis of certain equity-linked financial instruments with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. Part II of this update recharacterizes the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. The Company does not expect a material effect on the results of operations or financial position with the adoption of this ASU.
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
In September 2017, the FASB released ASU 2017-13, Revenue Recognition (Topic 605), Revenue from contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842). This update adds SEC paragraphs pursuant to the SEC Staff Announcement made at the July 20, 2017 Emerging Issues Task Force (EITF) meeting to provide effective dates that differ for (1) public business entities and certain other specified entities and (2) all other entities. The Company does not expect an effect on the results of operations or financial position with the adoption of this ASU. The Company will adopt Topic 606 and 842 within the required effective dates set by the SEC. Amendment to Topic 605 does not affect the Company since management fees amongst affiliates are eliminated upon consolidation. Amendment to Topic 840 does not affect the Company since the Company does not have any Third-Party Value Guarantees embedded within its lease agreements that will have a material effect on the results of operations or financial position.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the SEC did not, or are not believed by management to, have a material impact on the Company’s present or future consolidated financial statements.
NWLIC is restricted by state insurance laws as to dividend amounts which may be paid to stockholders without prior approval from the Colorado Division of Insurance. The restrictions are based on the lesser of statutory earnings from operations, excluding capital gains, from the prior calendar year or 10% of statutory surplus of the company as of previous calendar year-end. The maximum dividend payment which may be made without prior approval in 2017 is $86.0 million. As the sole owner of NWLIC, all dividends declared by National Western are payable entirely to NWLGI and are eliminated in consolidation.
In the second quarter of 2017 National Western declared and paid a $4.0 million dividend to NWLGI. During the third quarter of 2017 National Western declared a $3.0 million dividend payable to NWLGI which was subsequently paid on October 16, 2017. In the nine months ended September 30, 2016, National Western declared a cash dividend of $3.0 million payable to NWLGI which was subsequently paid on October 3, 2016.
NWLGI did not declare or pay cash dividends on its common shares during the nine months ended September 30, 2017 and 2016.
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Basic earnings per share of common stock are computed by dividing net income by the weighted-average basic common shares outstanding during the period. Diluted earnings per share, by definition, assumes the issuance of common shares applicable to stock options in the denominator. However, settlement of stock option exercises in cash or by issuance of shares is at discretion of the Company's optionholders and such exercises have predominantly been in cash. Consequently, the Company's stock options outstanding are not considered potentially dilutive under accounting guidance.
Net income for the periods shown is allocated between Class A shares and Class B shares based upon (1) the proportionate number of shares issued and outstanding as of the end of the period, and (2) the per share dividend rights of the two classes under the Company's Restated Certificate of Incorporation (the Class B dividend per share is equal to one-half the Class A dividend per share).
|
| | | | | | | | | | | | |
| Three Months Ended September 30, |
| 2017 | | 2016 |
| Class A | | Class B | | Class A | | Class B |
| (In thousands except per share amounts) |
| | | | | | | |
Numerator for Basic and Diluted Earnings Per Share: | | | | | | | |
Net income | $ | 21,813 |
| | | | 33,736 |
| | |
Dividends - Class A shares | — |
| | | | — |
| | |
Dividends - Class B shares | — |
| | | | — |
| | |
| | | | | | | |
Undistributed income | $ | 21,813 |
| | | | 33,736 |
| | |
| | | | | | | |
Allocation of net income: | |
| | | | |
| | |
Dividends | $ | — |
| | — |
| | — |
| | — |
|
Allocation of undistributed income | 21,196 |
| | 617 |
| | 32,782 |
| | 954 |
|
| | | | | | | |
Net income | $ | 21,196 |
| | 617 |
| | 32,782 |
| | 954 |
|
| | | | | | | |
Denominator: | |
| | |
| | |
| | |
|
Basic earnings per share - weighted-average shares | 3,436 |
| | 200 |
| | 3,436 |
| | 200 |
|
Effect of dilutive stock options | — |
| | — |
| | — |
| | — |
|
| | | | | | | |
Diluted earnings per share - adjusted weighted-average shares for assumed conversions | 3,436 |
| | 200 |
| | 3,436 |
| | 200 |
|
| | | | | | | |
Basic Earnings Per Share | $ | 6.17 |
| | 3.08 |
| | 9.54 |
| | 4.77 |
|
| | | | | | | |
Diluted Earnings Per Share | $ | 6.17 |
| | 3.08 |
| | 9.54 |
| | 4.77 |
|
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
| | | | | | | | | | | | |
| | | | | | | |
| Nine Months Ended September 30, |
| 2017 | | 2016 |
| Class A | | Class B | | Class A | | Class B |
| (In thousands except per share amounts) |
| | | | | | | |
Numerator for Basic and Diluted Earnings Per Share: | | | | | | | |
Net income | $ | 70,834 |
| | | | 77,280 |
| | |
Dividends - Class A shares | — |
| | | | — |
| | |
Dividends - Class B shares | — |
| | | | — |
| | |
| | | | | | | |
Undistributed income | $ | 70,834 |
| | | | 77,280 |
| | |
| | | | | | | |
Allocation of net income: | |
| | | | |
| | |
Dividends | $ | — |
| | — |
| | — |
| | — |
|
Allocation of undistributed income | 68,831 |
| | 2,003 |
| | 75,095 |
| | 2,185 |
|
| | | | | | | |
Net income | $ | 68,831 |
| | 2,003 |
| | 75,095 |
| | 2,185 |
|
| | | | | | | |
Denominator: | |
| | |
| | |
| | |
|
Basic earnings per share - weighted-average shares | 3,436 |
| | 200 |
| | 3,436 |
| | 200 |
|
Effect of dilutive stock options | — |
| | — |
| | — |
| | — |
|
| | | | | | | |
Diluted earnings per share - adjusted weighted-average shares for assumed conversions | 3,436 |
| | 200 |
| | 3,436 |
| | 200 |
|
| | | | | | | |
Basic Earnings Per Share | $ | 20.03 |
| | 10.02 |
| | 21.85 |
| | 10.93 |
|
| | | | | | | |
Diluted Earnings Per Share | $ | 20.03 |
| | 10.02 |
| | 21.85 |
| | 10.93 |
|
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| |
(5) | PENSION AND OTHER POSTRETIREMENT PLANS |
| |
(A) | Defined Benefit Pension Plans |
National Western sponsors a qualified defined benefit pension plan covering employees enrolled prior to 2008. The plan provides benefits based on the participants' years of service and compensation. The company makes annual contributions to the plan that comply with the minimum funding provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). On October 19, 2007, National Western's Board of Directors approved an amendment to freeze the pension plan as of December 31, 2007. The freeze ceased future benefit accruals to all participants and closed the plan to any new participants. In addition, all participants became immediately 100% vested in their accrued benefits as of that date. Fair values of plan assets and liabilities are measured as of the prior December 31 for each respective year. The following table summarizes the components of net periodic benefit cost.
|
| | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Service cost | $ | 27 |
| | 26 |
| | 81 |
| | 79 |
|
Interest cost | 240 |
| | 250 |
| | 718 |
| | 750 |
|
Expected return on plan assets | (306 | ) | | (304 | ) | | (920 | ) | | (912 | ) |
Amortization of prior service cost | — |
| | — |
| | — |
| | — |
|
Amortization of net loss | 159 |
| | 193 |
| | 477 |
| | 579 |
|
| | | | | | | |
Net periodic benefit cost | $ | 120 |
| | 165 |
| | 356 |
| | 496 |
|
The service cost shown above for each period represents plan expenses expected to be paid out of plan assets. Under the clarified rules of the Pension Protection Act, plan expenses paid from plan assets are to be included in the plan's service cost component.
The company's minimum required contribution for the 2017 plan year is $0.2 million. There was no remaining contribution payable for the 2016 plan year as of September 30, 2017. As of September 30, 2017, the company had contributed a total of $0.0 million to the plan for the 2017 plan year.
National Western also sponsors a nonqualified defined benefit plan primarily for senior officers. The plan provides benefits based on the participants' years of service and compensation. The pension obligations and administrative responsibilities of the plan are maintained by a pension administration firm, which is a subsidiary of American National Insurance Company ("ANICO"). ANICO has guaranteed the payment of pension obligations under the plan. However, the company has a contingent liability with respect to the plan should these entities be unable to meet their obligations under the existing agreements. Also, the company has a contingent liability with respect to the plan in the event that a plan participant continues employment with National Western beyond age seventy, the aggregate average annual participant salary increases exceed 10% per year, or any additional employees become eligible to participate in the plan. If any of these conditions are met, the company would be responsible for any additional pension obligations resulting from these items. Amendments were made to the plan to allow an additional employee to participate and to change the benefit formula for the then Chairman of the company. As previously mentioned, these additional obligations are a liability to the company. Effective December 31, 2004, this plan was frozen with respect to the continued accrual of benefits of the then Chairman and the then President of the company in order to comply with law changes under the American Jobs Creation Act of 2004 ("Act").
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Effective July 1, 2005, National Western established a second non-qualified defined benefit plan for the benefit of the then Chairman of the company. This plan is intended to provide for post-2004 benefit accruals that mirror and supplement the pre-2005 benefit accruals under the previously discussed non-qualified plan, while complying with the requirements of the Act.
Effective November 1, 2005, National Western established a third non-qualified defined benefit plan for the benefit of the then President of the company. This plan is intended to provide for post-2004 benefit accruals that supplement the pre-2005 benefit accruals under the first non-qualified plan as previously discussed, while complying with the requirements of the Act.
The following table summarizes the components of net periodic benefit costs for the nonqualified defined benefit plans.
|
| | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Service cost | $ | 204 |
| | 109 |
| | 612 |
| | 327 |
|
Interest cost | 347 |
| | 265 |
| | 1,041 |
| | 794 |
|
Amortization of prior service cost | 15 |
| | 15 |
| | 45 |
| | 45 |
|
Amortization of net loss | 818 |
| | 501 |
| | 2,455 |
| | 1,503 |
|
| | | | | | | |
Net periodic benefit cost | $ | 1,384 |
| | 890 |
| | 4,153 |
| | 2,669 |
|
The company expects to contribute $2.0 million to these plans in 2017. As of September 30, 2017, the company has contributed $1.6 million to the plans.
| |
(B) | Defined Benefit Postretirement Healthcare Plans |
National Western sponsors two healthcare plans to provide postretirement benefits to certain fully-vested individuals. The following table summarizes the components of net periodic benefit costs.
|
| | | | | | | | | | | | |
| Three Months Ended | | Nine Months Ended |
| September 30, | | September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Interest cost | $ | 35 |
| | 30 |
| | 104 |
| | 90 |
|
Amortization of prior service cost | 25 |
| | 26 |
| | 77 |
| | 78 |
|
Amortization of net loss | 10 |
| | — |
| | 31 |
| | — |
|
| | | | | | | |
Net periodic benefit cost | $ | 70 |
| | 56 |
| | 212 |
| | 168 |
|
The company expects to contribute minimal amounts to the plan in 2017.
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
| |
(6) | SEGMENT AND OTHER OPERATING INFORMATION |
The Company defines its reportable operating segments as domestic life insurance, international life insurance, and annuities. These segments are organized based on product types and geographic marketing areas. A summary of segment information as of September 30, 2017 and December 31, 2016 for the Condensed Consolidated Balance Sheet items and for the three and nine months ended September 30, 2017 and September 30, 2016 for the Condensed Consolidated Statement of Earnings is provided below.
Condensed Consolidated Balance Sheet Items:
|
| | | | | | | | | | | | | | | |
| September 30, 2017 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Deferred policy acquisition costs and sales inducements | $ | 95,894 |
| | 254,150 |
| | 598,234 |
| | — |
| | 948,278 |
|
Total segment assets | 1,071,664 |
| | 1,238,990 |
| | 9,306,527 |
| | 309,197 |
| | 11,926,378 |
|
Future policy benefits | 909,407 |
| | 904,097 |
| | 8,178,265 |
| | — |
| | 9,991,769 |
|
Other policyholder liabilities | 14,441 |
| | 14,635 |
| | 107,996 |
| | — |
| | 137,072 |
|
|
| | | | | | | | | | | | | | | |
| December 31, 2016 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Deferred policy acquisition costs and sales inducements | $ | 90,485 |
| | 243,106 |
| | 648,714 |
| | — |
| | 982,305 |
|
Total segment assets | 971,990 |
| | 1,232,648 |
| | 9,193,980 |
| | 298,481 |
| | 11,697,099 |
|
Future policy benefits | 830,460 |
| | 919,380 |
| | 8,109,255 |
| | — |
| | 9,859,095 |
|
Other policyholder liabilities | 13,998 |
| | 10,528 |
| | 118,865 |
| | — |
| | 143,391 |
|
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Condensed Consolidated Statement of Earnings:
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2017 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Premiums and contract revenues | $ | 9,907 |
| | 30,353 |
| | 5,293 |
| | — |
| | 45,553 |
|
Net investment income | 17,385 |
| | 15,711 |
| | 114,123 |
| | 4,472 |
| | 151,691 |
|
Other revenues | 11 |
| | 26 |
| | 26 |
| | 4,609 |
| | 4,672 |
|
| | | | | | | | | |
Total revenues | 27,303 |
| | 46,090 |
| | 119,442 |
| | 9,081 |
| | 201,916 |
|
| | | | | | | | | |
Life and other policy benefits | 3,483 |
| | 8,437 |
| | 9,095 |
| | — |
| | 21,015 |
|
Amortization of deferred policy acquisition costs | 2,517 |
| | (21,585 | ) | | 37,790 |
| | — |
| | 18,722 |
|
Universal life and annuity contract interest | 14,119 |
| | 9,112 |
| | 84,568 |
| | — |
| | 107,799 |
|
Other operating expenses | 4,086 |
| | 5,661 |
| | 8,714 |
| | 4,135 |
| | 22,596 |
|
Federal income taxes (benefit) | 1,061 |
| | 15,473 |
| | (7,007 | ) | | 1,792 |
| | 11,319 |
|
| | | | | | | | | |
Total expenses | 25,266 |
| | 17,098 |
| | 133,160 |
| | 5,927 |
| | 181,451 |
|
| | | | | | | | | |
Segment earnings (loss) | $ | 2,037 |
| | 28,992 |
| | (13,718 | ) | | 3,154 |
| | 20,465 |
|
|
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2017 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Premiums and contract revenues | $ | 27,822 |
| | 91,563 |
| | 16,583 |
| | — |
| | 135,968 |
|
Net investment income | 51,998 |
| | 48,581 |
| | 346,031 |
| | 19,435 |
| | 466,045 |
|
Other revenues | 30 |
| | 73 |
| | 90 |
| | 13,521 |
| | 13,714 |
|
| | | | | | | | | |
Total revenues | 79,850 |
| | 140,217 |
| | 362,704 |
| | 32,956 |
| | 615,727 |
|
| | | | | | | | | |
Life and other policy benefits | 13,850 |
| | 19,399 |
| | 25,377 |
| | — |
| | 58,626 |
|
Amortization of deferred acquisition costs | 8,300 |
| | (7,874 | ) | | 85,566 |
| | — |
| | 85,992 |
|
Universal life and annuity contract interest | 41,576 |
| | 36,871 |
| | 221,415 |
| | — |
| | 299,862 |
|
Other operating expenses | 13,975 |
| | 18,846 |
| | 28,588 |
| | 12,622 |
| | 74,031 |
|
Federal income taxes (benefit) | 740 |
| | 25,125 |
| | 605 |
| | 7,001 |
| | 33,471 |
|
| | | | | | | | | |
Total expenses | 78,441 |
| | 92,367 |
| | 361,551 |
| | 19,623 |
| | 551,982 |
|
| | | | | | | | | |
Segment earnings (loss) | $ | 1,409 |
| | 47,850 |
| | 1,153 |
| | 13,333 |
| | 63,745 |
|
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
|
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2016 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Premiums and contract revenues | $ | 8,507 |
| | 31,066 |
| | 5,391 |
| | — |
| | 44,964 |
|
Net investment income | 12,294 |
| | 12,763 |
| | 97,384 |
| | 4,540 |
| | 126,981 |
|
Other revenues | 7 |
| | 10 |
| | 139 |
| | 4,320 |
| | 4,476 |
|
| | | | | | | | | |
Total revenues | 20,808 |
| | 43,839 |
| | 102,914 |
| | 8,860 |
| | 176,421 |
|
| | | | | | | | | |
Life and other policy benefits | 5,338 |
| | 5,038 |
| | 7,054 |
| | — |
| | 17,430 |
|
Amortization of deferred acquisition costs | (4,331 | ) | | 7,296 |
| | 21,430 |
| | — |
| | 24,395 |
|
Universal life and annuity contract interest | 9,795 |
| | 11,287 |
| | 46,694 |
| | — |
| | 67,776 |
|
Other operating expenses | 4,847 |
| | 6,691 |
| | 7,526 |
| | 4,531 |
| | 23,595 |
|
Federal income taxes (benefit) | 1,667 |
| | 3,591 |
| | 6,549 |
| | 1,209 |
| | 13,016 |
|
| | | | | | | | | |
Total expenses | 17,316 |
| | 33,903 |
| | 89,253 |
| | 5,740 |
| | 146,212 |
|
| | | | | | | | | |
Segment earnings (loss) | $ | 3,492 |
| | 9,936 |
| | 13,661 |
| | 3,120 |
| | 30,209 |
|
|
| | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2016 |
| Domestic Life Insurance | | International Life Insurance | | Annuities | | All Others | | Totals |
| | | | | (In thousands) | | | | |
| | | | | | | | | |
Premiums and contract revenues | $ | 24,814 |
| | 95,291 |
| | 17,407 |
| | — |
| | 137,512 |
|
Net investment income | 28,011 |
| | 30,203 |
| | 261,579 |
| | 15,939 |
| | 335,732 |
|
Other revenues | 37 |
| | 50 |
| | 145 |
| | 13,818 |
| | 14,050 |
|
| | | | | | | | | |
Total revenues | 52,862 |
| | 125,544 |
| | 279,131 |
| | 29,757 |
| | 487,294 |
|
| | | | | | | | | |
Life and other policy benefits | 13,629 |
| | 14,789 |
| | 20,153 |
| | — |
| | 48,571 |
|
Amortization of deferred acquisition costs | 989 |
| | 11,720 |
| | 75,872 |
| | — |
| | 88,581 |
|
Universal life and annuity contract interest | 20,855 |
| | 19,643 |
| | 139,094 |
| | — |
| | 179,592 |
|
Other operating expenses | 11,745 |
| | 17,867 |
| | 23,044 |
| | 13,650 |
| | 66,306 |
|
Federal income taxes (benefit) | 1,833 |
| | 19,977 |
| | 6,808 |
| | 5,229 |
| | 33,847 |
|
| | | | | | | | | |
Total expenses | 49,051 |
| | 83,996 |
| | 264,971 |
| | 18,879 |
| | 416,897 |
|
| | | | | | | | | |
Segment earnings (loss) | $ | 3,811 |
| | 41,548 |
| | 14,160 |
| | 10,878 |
| | 70,397 |
|
| | | | | | | | | |
NATIONAL WESTERN LIFE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Reconciliations of segment information to the Company's Condensed Consolidated Financial Statements are provided below.
|
| | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Premiums and Other Revenues: | | | | | | | |
Premiums and contract revenues | $ | 45,553 |
| | 44,964 |
| | 135,968 |
| | 137,512 |
|
Net investment income | 151,691 |
| | 126,981 |
| | 466,045 |
| | 335,732 |
|
Other revenues | 4,672 |
| | 4,476 |
| | 13,714 |
| | 14,050 |
|
Realized gains (losses) on investments | 2,074 |
| | 5,426 |
| | 10,906 |
| | 10,589 |
|
| | | | | | | |
Total condensed consolidated premiums and other revenues | $ | 203,990 |
| | 181,847 |
| | 626,633 |
| | 497,883 |
|
|
| | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Federal Income Taxes: | | | | | | | |
Total segment Federal income taxes | $ | 11,319 |
| | 13,016 |
| | 33,471 |
| | 33,847 |
|
Taxes on realized gains (losses) on investments | 726 |
| | 1,899 |
| | 3,817 |
| | 3,706 |
|
| | | | | | | |
Total condensed consolidated Federal income taxes | $ | 12,045 |
| | 14,915 |
| | 37,288 |
| | 37,553 |
|
|
| | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2017 | | 2016 | | 2017 | | 2016 |
| (In thousands) |
| | | | | | | |
Net Earnings: | | | | | | | |
Total segment earnings | $ | 20,465 |
| | 30,209 |
| | 63,745 |
| | 70,397 |
|
Realized gains (losses) on investments, net of taxes | 1,348 |
| | 3,527 | |