Discontinued Operations
On December 12, 2013, the Company completed the sale of HLIL, an indirect wholly-owned subsidiary. For further information regarding the sale of HLIL, see Note 2 - Business Dispositions of Notes to Consolidated Financial Statements.
On November 1, 2011, the Company completed a merger with CenterState Banks, Inc. (“CBI”), pursuant to which Federal Trust Corporation (“FTC”), a wholly owned subsidiary of the Company, was merged with and into CBI, and Federal Trust Bank (“FTB”), a federally chartered, FDIC-insured thrift and wholly owned subsidiary of FTC, was merged with and into CenterState Bank of Florida, N.A. (“CenterState Bank”), a wholly owned subsidiary of CBI. The Company recorded an after-tax charge of $74 to net realized capital losses in the second quarter of 2011 for the estimated loss on disposal, including the write off of remaining goodwill of $10, after-tax, and losses on certain FTC and FTB assets and liabilities, which were not transferred to CenterState Bank. Upon final closing with CBI, the Company recorded a benefit of $6, after tax, in the fourth quarter of 2011 related to the divestiture.
In the first quarter of 2011, the Company completed the sale of its wholly-owned subsidiary Specialty Risk Services (“SRS”) and recorded a net realized capital gain of $150, after-tax. SRS is a third-party claims administration business that provides self-insured, insured, and alternative market clients with customized claims services.
The following table summarizes the amounts related to discontinued operations in the Consolidated Statements of Operations.
|
| | | | | | | | | |
| For the years ended December 31, |
| 2013 | 2012 | 2011 |
Revenues | | | |
Earned premiums | $ | 4 |
| $ | — |
| $ | — |
|
Fee income and other | 13 |
| 46 |
| 50 |
|
Net investment income (loss) | | | |
Securities available-for-sale and other | (3 | ) | 10 |
| 26 |
|
Equity securities, trading | 140 |
| 201 |
| (14 | ) |
Total Net Investment Income | 137 |
| 211 |
| 12 |
|
Net realized capital losses | (49 | ) | 33 |
| 75 |
|
Other revenues | — |
| — |
| 48 |
|
Total revenues | 105 |
| 290 |
| 185 |
|
Benefits, losses and expenses | |
| |
| |
|
Benefits, losses and loss adjustment expenses | 2 |
| 2 |
| (2 | ) |
Benefits, losses and loss adjustment expenses - returns credited on international variable annuities | 140 |
| 201 |
| (14 | ) |
Amortization of DAC | — |
| — |
| — |
|
Insurance operating costs and other expenses | 23 |
| 39 |
| 95 |
|
Total benefits, losses and expenses | 165 |
| 242 |
| 79 |
|
Income (loss) before income taxes | (60 | ) | 48 |
| 106 |
|
Income tax expense (benefit) | (28 | ) | (15 | ) | 49 |
|
Income (loss) from operations of discontinued operations, net of tax | (32 | ) | 63 |
| 57 |
|
Net realized capital gain (loss) on disposal, net of tax [1] | (102 | ) | (1 | ) | 82 |
|
Income (loss) from discontinued operations, net of tax | $ | (134 | ) | $ | 62 |
| $ | 139 |
|
[1] Includes an income tax benefit of $219 on the sale of HLIL for the year ended December 31, 2013.
