your irst choice - the plateau group, inc. · 2 the plateau group, inc. founded in 1981 in...
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Your irst choice 1
The Plateau Group, Inc.2
Founded in 1981 in Crossville, Tennessee, The Plateau Group,
Inc. is an underwriter of payment protection products and a
distributor of related financial products and services through-
out the United States and South Pacific Islands. Plateau serves
clients in the banking, consumer finance, automotive, credit
union and retail industries. The company is considered one of
the premier providers of products and services to financial
institutions. Plateau also holds a national reputation as a
provider of reinsurance and reinsurance accounting.
Company Profi leCompany Profi le
Authorized StatesAuthorized States
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Financial PerformanceFinancial Performance
Financial Performance Results for 2017 Include:• Net after tax income of $2,743,244 compared to $2,041,100 for 2016; an increase of 34.4%.• Net income per share of $2.31 compared to $1.75 for 2016; an increase of 32%.• Shareholders’ equity at year-end 2017 of $28,245,086 ($23.69 per share) compared to $25,319,219 at year-end 2016 ($21.69 per share); an increase of 11.56%.• Return on equity of 10.3% for 2017 compared to 8.4% for 2016. • Collected insurance premium of $112,180,589 com-pared to $110,301,323 for 2016; an increase of 1.7%.• Cash and Invested Assets at year-end were $69,583,526 compared to $69,518,217 at 2016.• Investment Income of $1,359,164 compared to $993,722 for 2016; an increase of 36.8%.• Commissions and Fee Income of $4,871,901 compared to $4,802,900 for 2016.
NOTE: Total revenues, cash and invested assets and investment income used in this presentation may not coincide with the enclosed balance sheet and income statement because certain components are reclassifi ed for GAAP presentation. The numbers discussed in the Letter to Shareholders and in the Analysis of Premium Section are used consistently for planning and comparison.
Table of ContentsTable of Contents
Letter to Shareholders.......................2Marketing/Sales Photos.....................4Management Photos ..........................5Consolidated Balance Sheet...........14Consolidated Earnings......................15Shareholders’ Equity...........................16Plateau Associates.............................11Executive Committee.........................14Board of Directors..............................14Associates by Department................15
The Plateau Group, Inc.4
Letter to ShareholdersLetter to Shareholders
Dick WilliamsPresident
To our: Shareholders, Customers, and Prospec ve Customers:
For 2017, The Plateau Group, Inc. reported record earnings of $2,743,244, $2.31 per share compared to $2,041,100, $1.75 per share for 2016. This is an increase of 34.4% in earnings and 32% in per share earnings. The earnings were boosted by favorable income tax adjust-ments in the amount of $458,000, primarily a ribut-able to the revalua on of deferred tax liabili es at the new lower tax rate. Shareholders’ equity increased to $28,245,086 during 2017 compared to year-end 2016 of $25,319,219, an increase of 11.56%. Return on equity for 2017 was 10.3% compared to 8.4% for 2016.
Each of our revenue components experienced a gain for the year. Insurance premiums were a record $112,180,589, an increase of 1.7% compared to 2016. Income generated from premiums, less commissions, claims and premium taxes, increased $701,917 to $12,071,598 in underwri ng margin, which is the amount available to cover overhead from premiums. The premi-um by Market Segment chart on this page illustrates the sources of our produc on and the changes during 2017.
The second largest revenue component is com-missions and fee income which was rela vely fl at at $4,871,901 for 2017. A por on of this component is de-rived from administra ve fees collected on administered extended service contracts and debt protec on products off ered by banks. The largest component of this important source is commissions earned by off ering valuable prod-ucts manufactured or underwri en by other vendors.
Our third source of revenue is investment income generated by inves ng our capital and reserves held on our insurance products. At year end 2017 we held a total of $69,583,526 in cash and invested assets. Investment earnings for 2017 were $1,359,164 compared to $993,722 for 2016, an increase of 36.8%. More than ninety-fi ve percent of our por olio is invested very conserva vely in short term cer fi cates of deposit, fi xed income gov-ernment bonds and fi xed income corporate bonds. The average yield on our investments for 2017 was 2% as we con nue this conserva ve investment por olio.
On the expense side, rising technology costs and regulatory and compliance costs are costs of doing business for Plateau. We u lize prudence in every pos-sible decision we make in these areas but must meet the requirements imposed on our opera ons to improve busi-ness processes and compliance requirements. To a large extent these costs are outside of our control. We focus on the costs within our control. The key performance indica-tor we use to gauge our eff orts on cost control is our ra o of opera ng expenses to opera ng revenue. For 2017 this ra o was 26.89%. Our stated goal for this ra o is 25% and we believe we can achieve this target in the next couple of years.
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During 2017 we applied for and received Cer fi -cates of Authority (CofA) in eleven new states. Plateau Insurance Company obtained four of these new CofA’s bringing its total to forty-three states plus three cer- fi cates in the South Pacifi c Islands. Plateau Casualty
obtained seven new CofA’s bringing its total to forty-six states. This expansion is important to Plateau as we review many of the new business opportuni es requiring the need to off er products in mul ple states. Now that we have obtained the new CofA’s we are taking the next step in fi ling policy forms for the necessary products. The ability to provide products in the majority of states combined with maintaining a ra ng of A- with AM Best will con nue to bring new business opportuni es for our review.
We con nued to add experienced profession-als to our staff in 2017. Bill Ellio joined our staff in January 2017. Bill brings 39 years of credit insurance experience with four diff erent carriers, the most recent being Transamerica which exited that business in 2016. His role with Plateau is client management, including management of exis ng accounts and helping assess the new opportuni es we iden fy. In June 2017 Jim Hall, an associate of Bill’s at Transamerica, with 28 years of credit insurance experience in a variety of opera onal areas, including form fi lings, management of claims, and group mortgage opera ons, joined our staff . Since Transamerica exited the monthly pay group mortgage business at year end 2016, we have replaced some of the Transamerica policies in force through certain creditors with Plateau In-surance Company policies, picking up approximately one million dollars in annual premium. In 2018 we have iden- fi ed and are working to replace another million dollars
of group mortgage annual premium. Bill and Jim have been very valuable in assis ng us with the transi on of this business. We now have twelve associates with many years of experience in our business who have joined our staff in the last six years contribu ng to our marke ng, opera ons and growth.
Plateau must maintain compliance with laws and regula ons from mul ple sources. Insurance is regulated
by each state, each of which has its own unique laws and regula ons. Our staff must be well aware of the unique requirements of each state. The majority of our products are off ered by lenders which have their own set of regu-latory requirements on a state by state basis, as well as federal lending laws imposed on their business. For Pla-teau, the Consumer Financial Protec on Bureau has been the elephant in the room since its incep on under the leadership of Richard Cordray, where the bureau applied enforcement ac ons and imposed very expensive se le-ment agreements. Since his resigna on late in 2017, Mick Mulvaney has led the bureau as a very reasonable director. It appears that under Mulvaney’s leadership, and hopefully the permanent director who follows him, the bureau will be led in ways that are fair to all par es, including lenders.
Plateau remains well posi oned to deliver on stra-tegic priori es and create long-term value for our share-holders. With our expanded footprint of CofA’s we expect to a ract new business opportuni es. We an cipate cross selling our products in the commercial bank market to exis ng clients, growing the automobile market through recently contracted agents and third-party administrators, and growing the consumer fi nance market as we a ract new producers. As we build on the momentum of our diversifi ca on over the past eight years, we remain dedi-cated to providing excellent and diff er en ated service for our customers.
I want to off er a sincere thanks to our associates, our management team, and our board for their dedica on, commitment to quality service and their openness to in-nova on and improvement. To our investors and clients, I thank you for your trust. We understand we must con- nue to earn it and we look forward to the challenge.
Regards,
The Plateau Group, Inc.6
Marketing/Sales DevelopmentMarketing/Sales Development
Doyle KellySoutheast
Reed GassChief Marketing Offi cer
Thom HaganMiddle Tennessee
David GreeneWest Tennessee
Bob JoyceNortheast
Greg JanssenIndiana
Dave KarrFinancial Institutions
Andrea Bower Kansas
Cameron RogersEast Tennessee
Tony SnowIndiana
Fred AntleySouth Carolina
Melody WilliamsDirector of Training
Bill ElliottClient Management
John KellySoutheast Agent
Michael BoozerSouth Carolina Agent
John ManningAlabama Agent
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Skip DavisSr. Vice President
Products/Marketing
Euretha RobertsSr. VIce President
Operations
Mike GrahamSr. Vice President
Reinsurance Accounting
Eric ShaverSr. Vice President
Information Technology
ManagementManagement
David HardegreeChief Financial Offi cer
Executive Vice President
Elaine Pelletier, FSA, MAAASr. Vice President
Actuary
Steve DouglasVice President
General Counsel
Michael Ramsey, CPAVice President
Treasurer
Sharon Tabor, Vice President
Property & Casualty
Shelia NewberryVice PresidentTitle Insurance
Sandy WhitsonVice President
Premium Processing
Doris DavisVice PresidentCredit Claims
Judy HicksVice President
Accounting
Terri HammonsVice PresidentAgent Services
Deedy AdamsVice President
Compliance
Sissie TurnerVice President
Group Mortgage/MOB
Joy WhitedVice PresidentUnderwriting
Eric Shaver IIInformation Technology
Security Offi cer
The Plateau Group, Inc.8
Consolidated Balance SheetsConsolidated Balance Sheets
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Consolidated EarningsConsolidated Earnings
The Plateau Group, Inc.10
Con
solid
ated
Sta
tem
ents
of C
hang
es in
Sha
reho
lder
s’ Eq
uity
Con
solid
ated
Sta
tem
ents
of C
hang
es in
Sha
reho
lder
s’ Eq
uity
THE P
LATE
AU G
ROUP
, INC.
AND
SUBS
IDIA
RIES
(Unaudited)
Accu
mulat
edOt
her
Total
Addit
ional
Retai
ned
Comp
rehen
sive
Share
holde
rs'Co
mmon
Stoc
k P
aid-In
Cap
ital
E
arning
s In
come
(Los
s)
Equ
ity
Balan
ce as
of Ja
nuary
1, 20
161,1
53,45
44,6
32,95
218
,119,9
62(60
9,213
)23
,297,1
55
Net in
come
2,041
,100
2,041
,100
Othe
r com
preh
ensiv
e inc
ome
64,62
564
,625
Stoc
k iss
ued -
18,35
8 sha
res18
,358
362,7
3238
1,090
Retir
emen
t of s
tock
- 17,2
44 sh
ares
(17,24
4)(10
3,506
)(23
,409)
(144,1
59)
Divid
ends
to st
ockh
olders
(576,7
27)
(576,7
27)
Divid
end r
einve
stmen
t - 13
,015 s
hares
13,01
524
3,120
256,1
35
Tot
al14
,129
502,3
461,4
40,96
464
,625
2,022
,064
Balan
ce as
of D
ecem
ber 3
1, 20
161,1
67,58
35,1
35,29
819
,560,9
26(54
4,588
)25
,319,2
19
Net in
come
2,743
,244
2,743
,244
Othe
r com
preh
ensiv
e inc
ome
216,4
9721
6,497
Stoc
k iss
ued -
30,65
0 sha
res30
,650
628,8
0165
9,451
Retir
emen
t of s
tock
- 14,7
23 sh
ares
(14,72
3)(23
4,128
)(52
,997)
(301,8
48)
Divid
ends
to st
ockh
olders
(576,7
76)
(576,7
76)
Divid
end r
einve
stmen
t - 9,
017 s
hares
9,017
176,2
8218
5,299
T
otal
24,94
457
0,955
2,113
,471
216,4
972,9
25,86
7
Balan
ce as
of D
ecem
ber 3
1, 20
17 $
1,192
,527
$5,7
06,25
3 $
21,67
4,397
$(32
8,091
) $
28,24
5,086
Your irst choice 11
Plateau AssociatesPlateau Associates
Jessie SteppCredit Claims
Victoria SteppCredit Claims
Gina KeenerCredit Claims
Megan SherrillCredit Claims
Kimberly VincentCredit Claims
Tonya IlesCredit Operations
Jo ReaganCredit Operations
Renee HolbrookCredit Claims
Brandy ThompsonCredit Operations
Erin Young, AVPCredit Operations
Cassie IlesCredit Operations
Tasha HigdonCredit Operations
Tiff any ThompsonCredit Operations
Pamela PingreeCredit Operations
Sarah RaryCredit Operations
Joshua VanWinkleCredit Operations
Sandra BradberryUnderwriting
Bre WeidnerCredit Operations
Dana RedwineUnderwriting
Becky JohnstonUnderwriting
Jackie WilbanksGroup Mortgage/MOB
Shaina HardyGroup Mortgage/MOB
Meredith MullenUnderwriting
Kelley MillerGroup Mortgage/MOB
Hannah LauGroup Mortgage/MOB
April Fagan, AVPCredit Claims
Brandy AdkinsUnderwriting
Leanne LandersCredit Operations
Lauren BilbreyCredit Claims
The Plateau Group, Inc.12
Plateau AssociatesPlateau Associates
Andrew EllerAgent Services
Shannon GrahamAgent Services
Katie CastelowAgent Services
Keli SmithAgent Services
Laura LooneyAgent Services
Margaret MullinaxAgent Services
Beverly Jolly Compliance
Jessica HawnLicensing
Mary Franc GrahamCompliance
Amanda DyerLicensing
Troy BolenInformation Technology
Alexis DeiblerCompliance
Greg BaughmanInformation Technology
Terry WalterP&C/Auto
LeeAnn Roberts, AVPP&C/Auto
Heather JohnsonP&C/Auto
JoAnn RamseyInformation Technology
Skye PearsonInformation Technology
Daniel CareyInformation Technology
Julie HowardInformation Technology
Brandi WyattP&C/Auto
Whitney HenryP&C/Auto
Cammie ElmoreP&C/Auto
James HallCompliance
Your irst choice 13
Plateau AssociatesPlateau Associates
Melissa DyerTitle Services
Stephanie CareyGeneral Services
Brett SuggsGeneral Services
Vicki MasonGeneral Services
Glenna JacksonGeneral Services
Vicki CarlsonGeneral Services
Lynette DurantAccounting
Tracy Graham, AVPAccounting
Michele StandeferAccounting
Margaret SmithAccounting
Hannah ZiesReinsurance
Crystal DavidsonReinsurance
Johnnie WhittenburgReinsurance
Nick DonathanReinsurance
Kaye BarnettReinsurance
Natasha CollinsPlateau West
Martha LindsayPlateau West
Tamara BurtonPlateau West
Andrea ShumatePlateau West
Scarlett Sapp-HolmesAccounting
Christy ReedCredit Claims
The Plateau Group, Inc.14
Executive CommitteeExecutive Committee
Steve Miller, ChairmanThe Plateau Group, Inc.
Crossville, TN
Dick Williams, PresidentThe Plateau Group, Inc.
Crossville, TN
John Barker, CEOCitizens Tri-County Bank
Dunlap, TN
John BrunoBrentwood, TN
Board of DirectorsBoard of DirectorsDavid Barnes, PresidentBank of FrankewingFrankewing, TN
Bill Bates, CEOBank of Perry County Lobelville, TN
James England, ChairmanDecatur County BankDecaturville, TN
Craig Fitzhugh, Chairman, CEOBank of RipleyRipley, TN
Randy Graham, President, CEO First National Bank of TennesseeLivingston, TN
David Hardegree, CFOThe Plateau Group, Inc.Crossville, TN 38555
Mark Hayes, Chairman, CEOFirst National BankPulaski, TN
Wright Hickerson, III, DirectorFCB CorporationManchester, TN
Andy Nash, EVPThe Farmers BankPortland, TN
David Williamson, President, CEOBank of Putnam CountyCookeville, TN
Chad Wilson, PresidentFoundation Bank/McKenzie Banking Co.Jackson, TN
Wib Evans, PresidentFirst Bank Ventures
Lexington, TN
John HaileCleveland, TN
Your irst choice 15
CorporateDick WilliamsDavid Hardegree, CPAEuretha RobertsMike GrahamEric ShaverSkip DavisElaine Pelle er, FSA, MAAASteven Douglas, A yBill Ellio
Marke ng Staff Reed GassThom HaganDavid GreeneCameron RogersDoyle KellyFred AntleyBob JoyceGreg JanssenTony SnowAndrea BowerDave KarrMelody Williams, Trainer Marke ng AgentsJim Smar Hank LovedayJohn ManningDonna BrownMichael BoozerJohn Kelly
Informa on TechnologyEric ShaverJoAnn RamseyDaniel CareyTroy BolenEric Shaver IISkye PearsonGreg BaughmanJulie HowardGarre Davis
Group Mortgage/MOBSissie TurnerHannah LauJackie WilbanksShaina HardyKelley Miller
Agent ServicesTerri HammonsKeli SmithMargaret MullinaxShannon GrahamKa e CastelowLaura LooneyAndrew EllerAmanda DyerJessica Hawn
General ServicesVicki MasonStephanie CareyBre SuggsVicki Carlson Craig Wya Jewell SelbyGlenna Jackson
Corporate Accoun ngMichael Ramsey, CPAJudy HicksMargaret SmithTracy Graham Christy ReedLyne e Durant Scarlet SappMichele Standefer
Reinsurance Accoun ngMike GrahamJohnnie Whi enburgKaye Barne Hannah ZiesCrystal DavidsonNick Donathan
P & C / AutoSharon TaborLeeAnn RobertsTerry WalterBrandi Wya Heather JohnsonWhitney HenryCammie Elmore
Title InsuranceShelia NewberryMelissa Dyer
Compliance Deedy AdamsBeverly JollyAlexis DeiblerMary Franc Graham, A yJames Hall
Credit Opera onsSandy WhitsonErin YoungJo ReaganJoshua VanWinkleTasha HigdonPamela PingreeTonya IlesBre WeidnerSarah RaryTiff any ThompsonBrandy Flynn Cassie IlesLeanne LandersHenri Calahan
Underwri ngJoy WhitedSandra BradberryBecky JohnstonMeredith MullenDana RedwineBrandy Adkins
Credit ClaimsDoris DavisApril FaganKimberly VincentVictoria HoustonMegan SherrillJessie SteppGina KeenerRenee HolbrookLauren Bilbrey
Plateau WestMartha LindsayNatasha CollinsTamara BurtonAndrea Shumate
Plateau Associates by DepartmentPlateau Associates by Department
The Plateau Group, Inc.16
Crossville, Tennessee
Plateau CustomersPlateau Customers
Plateau Corporate Offi cePlateau Corporate Offi ce
Your irst choice 17