2.	Investments

Short-term investments held at December 31, 2017 include $ 25.8 million of U.S. Treasury securities and obligation of U.S. government agencies. Short-term investments held at December 31, 2016 include $21.9 million of U.S. Treasury securities and obligations of U.S. government agencies, $4.9 million of states and political subdivisions and $2.8 million of corporate bonds..

AMERISAFE redeemed an investment in a limited partnership hedge fund accounted for under the equity method in 2017.

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2017 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	460,428	$	9,628	$	(955	)	$	469,101
Corporate bonds		100,024		190		(167	)		100,047
Commercial mortgage-backed securities		—		—		—			—
U.S. agency-based mortgage-backed securities		10,260		625		(40	)		10,845
U.S. Treasury securities and obligations of U.S. government agencies		57,657		548		(198	)		58,007
Asset-backed securities		1,299		25		(15	)		1,309
Totals	$	629,668	$	11,016	$	(1,375	)	$	639,309

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2017 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	244,898	$	6,819	$	(577	)	$	251,140
Corporate bonds		130,210		224		(212	)		130,222
U.S. agency-based mortgage-backed securities		18,813		—		(799	)		18,014
U.S. Treasury securities and obligations of U.S. government agencies		67,315		29		(1,126	)		66,218
Total fixed maturity		461,236		7,072		(2,714	)		465,594
Equity securities		8,503		779		—			9,282
Other investments		—		—		—			—
Totals	$	469,739	$	7,851	$	(2,714	)	$	474,876

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2016 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	394,875	$	7,622	$	(3,014	)	$	399,483
Corporate bonds		143,858		423		(265	)		144,016
Commercial mortgage-backed securities		70		—		—			70
U.S. agency-based mortgage-backed securities		9,967		948		—			10,915
U.S. Treasury securities and obligations of U.S. government agencies		11,737		746		(67	)		12,416
Asset-backed securities		1,927		163		(59	)		2,031
Totals	$	562,434	$	9,902	$	(3,405	)	$	568,931

The gross unrealized gains and losses on, and the cost or amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2016 are summarized as follows:

	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
Fixed maturity:
States and political subdivisions	$	231,168	$	4,340	$	(3,215	)	$	232,293
Corporate bonds		182,350		436		(271	)		182,515
U.S. agency-based mortgage-backed securities		10,428		17		(1,103	)		9,342
U.S. Treasury securities and obligations of U.S. government agencies		55,925		—		(978	)		54,947
Total fixed maturity		479,871		4,793		(5,567	)		479,097
Equity securities		—		33		—			33
Other investments		10,000		3,330		—			13,330
Totals	$	489,871	$	8,156	$	(5,567	)	$	492,460

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at December 31, 2017, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	88,215	$	88,556
After one year through five years		271,580		273,810
After five years through ten years		98,748		100,745
After ten years		159,566		164,044
U.S. agency-based mortgage-backed securities		10,260		10,845
Asset-backed securities		1,299		1,309
Totals	$	629,668	$	639,309

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at December 31, 2017, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	76,194	$	76,211
After one year through five years		153,483		153,092
After five years through ten years		43,442		43,606
After ten years		169,304		174,671
U.S. agency-based mortgage-backed securities		18,813		18,014
Totals	$	461,236	$	465,594

Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay certain obligations with or without call or prepayment penalties.

At December 31, 2017, there were $18.7 million of held-to-maturity investments and $2.4 million of available-for-sale investments on deposit with regulatory agencies of states in which the Company does business.

A summary of the Company’s realized gains and losses on sales, calls or redemptions of investments for 2017, 2016 and 2015 is as follows:

	Fixed Maturity Securities Available for Sale			Equity Securities		Other			Total
	(in thousands)
Year ended December 31, 2017
Proceeds from sales	$	14,591		$	1	$	13,172		$	27,764
Gross realized investment gains	$	485		$	1	$	—		$	486
Gross realized investment (losses)		(5	)		—		—			(5	)
Net realized investment gains		480			1		—			481
Other, including losses on calls and redemptions		(520	)		—		(608	)		(1,128	)
Net realized gains (losses) on investments	$	(40	)	$	1	$	(608	)	$	(647	)
Year ended December 31, 2016
Proceeds from sales	$	54,730		$	—	$	4,609		$	59,339
Gross realized investment gains	$	823		$	—	$	68		$	891
Gross realized investment (losses)		(1,728	)		—		—			(1,728	)
Net realized investment gains (losses)		(905	)		—		68			(837	)
Other, including gains on calls and redemptions		274			—		69			343
Net realized gains (losses) on investments	$	(631	)	$	—	$	137		$	(494	)
Year ended December 31, 2015
Proceeds from sales	$	4,432		$	—	$	—		$	4,432
Gross realized investment gains	$	177		$	—	$	—		$	177
Gross realized investment (losses)		(162	)		—		—			(162	)
Net realized investment gains		15			—		—			15
Impairments		(2,653	)		—		—			(2,653	)
Other, including gains on calls and redemptions		102			—		42			144
Net realized gains (losses) on investments	$	(2,536	)	$	—	$	42		$	(2,494	)

In 2016, the Company sold $3.0 million in bonds that were classified as held-to-maturity. In February, Moody’s downgraded the bonds to B2 from B1 citing increasing liquidity concerns and also placed the bonds on negative outlook indicating the rating could be downgraded further. Given the evidence of significant credit deterioration, the Company elected to sell the bonds for $3.0 million, recognizing a $0.1 million realized gain.

Major categories of the Company’s net investment income are summarized as follows:

	Year Ended December 31,
	2017			2016			2015
	(in thousands)
Gross investment income:
Fixed maturity securities	$	28,961		$	27,837		$	28,498
Equity securities		201			—			—
Short-term investments and cash and cash equivalents		1,117			348			149
Other investments		104			1,568			763
Total gross investment income		30,383			29,753			29,410
Investment expenses		(1,102	)		(1,647	)		(1,508	)
Net investment income	$	29,281		$	28,106		$	27,902

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2017
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	110,698	$	654	$	19,895	$	301	$	130,593	$	955
Corporate bonds		56,425		156		4,121		11		60,546		167
U.S. agency-based mortgage-backed securities		2,798		40		—		—		2,798		40
U.S. Treasury securities and obligations of U.S. government agencies		48,153		122		3,948		76		52,101		198
Asset-backed securities		—		—		967		15		967		15
Total held-to-maturity securities		218,074		972		28,931		403		247,005		1,375
Available-for Sale
Fixed maturity securities:
States and political subdivisions	$	23,365	$	86	$	19,153	$	491	$	42,518	$	577
Corporate bonds		82,795		171		5,888		41		88,683		212
U.S. agency-based mortgage-backed securities		14,686		59		3,328		740		18,014		799
U.S. Treasury securities and obligations of U.S. government agencies		14,730		204		47,716		922		62,446		1,126
Total available-for-sale securities		135,576		520		76,085		2,194		211,661		2,714
Total	$	353,650	$	1,492	$	105,016	$	2,597	$	458,666	$	4,089
December 31, 2016
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	157,507	$	3,014	$	—	$	—	$	157,507	$	3,014
Corporate bonds		44,654		202		6,292		63		50,946		265
U.S. Treasury securities and obligations of U.S. government agencies		3,968		67		—		—		3,968		67
Asset-backed securities		—		—		1,173		59		1,173		59
Total held-to-maturity securities		206,129		3,283		7,465		122		213,594		3,405
Available-for Sale
Fixed maturity securities:
States and political subdivisions	$	73,505	$	2,976	$	4,523	$	239	$	78,028	$	3,215
Corporate bonds		41,419		111		7,922		160		49,341		271
U.S. agency-based mortgage-backed securities		3,702		48		3,607		1,055		7,309		1,103
U.S. Treasury securities and obligations of U.S. government agencies		54,947		978		—		—		54,947		978
Total available-for-sale securities		173,573		4,113		16,052		1,454		189,625		5,567
Total	$	379,702	$	7,396	$	23,517	$	1,576	$	403,219	$	8,972

At December 31, 2017, the Company held 299 individual fixed maturity securities that were in an unrealized loss position, of which 61 were in a continuous unrealized loss position for longer than 12 months.

The Company regularly reviews its investment portfolio to evaluate the necessity of recording impairment losses for other-than-temporary declines in the fair value of our investments. The Company considers various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors considered are:

•

any reduction or elimination of preferred dividends, or nonpayment of scheduled principal or interest payments;

•

the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

•

how long and by how much the fair value of the security has been below its cost or amortized cost;

•

any downgrades of the security by a rating agency;

•

our intent not to sell the security for a sufficient time period for it to recover its value;

•

the likelihood of being forced to sell the security before the recovery of its value; and

•

an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. The Company determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the securities before the recovery of its amortized cost basis.

In 2017, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.