INVESTMENTS

The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at March 31, 2012, and December 31, 2011:



	Cost or Adjusted/Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
March 31, 2012
U.S. government and agency securities	$	48,067	$	168	$	60	$	48,175
States, municipalities and political subdivisions	17,149		1,360		—		18,509
Corporate securities	52,696		2,526		3		55,219
Redeemable preferred stocks	558		—		9		549
Total fixed maturities	$	118,470	$	4,054	$	72	$	122,452
Common stocks	2,956		422		20		3,358
Nonredeemable preferred stocks	477		—		21		456
Total equity securities	$	3,433	$	422	$	41	$	3,814
Other long-term investments	300		—		—		300
Total investments	$	122,203	$	4,476	$	113	$	126,566

December 31, 2011
U.S. government and agency securities	$	48,011	$	219	$	111	$	48,119
States, municipalities and political subdivisions	17,159		1,207		—		18,366
Corporate securities	51,135		2,366		145		53,356
Redeemable preferred stocks	558		—		21		537
Total fixed maturities	$	116,863	$	3,792	$	277	$	120,378
Common stocks	2,807		359		43		3,123
Nonredeemable preferred stocks	477		—		19		458
Total equity securities	$	3,284	$	359	$	62	$	3,581
Other long-term investments	300		—		—		300
Total investments	$	120,447	$	4,151	$	339	$	124,259

When we sell investments, we calculate the gain or loss realized on the sale by comparing the sales price (fair value) to the cost or adjusted/amortized cost of the security sold. We determine the cost or adjusted/amortized cost of the security sold using the specific-identification method. The following table details our realized gains (losses) by major investment category for the three-month periods ended March 31, 2012 and 2011:



	2012
	Gains (Losses)			Fair Value at Sale
Three Months Ended March 31,
Realized gains on equity securities	90			737
Realized losses on equity securities	(9		)	153
Net realized investment gains	$	81		$	890

We did not realize a material amount of gains or losses on fixed maturities during the three months ended March 31, 2012, nor did we realize a material amount of gains or losses on any securities during the three months ended March 31, 2011.

Various states in which we operate or will be operating require us, by statute, to maintain deposits to secure the payment of claims. The table below summarizes our statutorily-required deposits at March 31, 2012.



	Type of Security Deposited	Cost/Amortized Cost		Fair Value
Florida	Certificate of Deposit	$	300	$	300
Amount reflected in other long-term investments		$	300	$	300
South Carolina	U.S. Treasury Note	1,000		1,001
Massachusetts	Municipal Bond	104		111
Amount reflected in fixed maturities		$	1,104	$	1,112
Securities deposited with insurance regulatory authorities		$	1,404	$	1,412

The CD we deposited with the Florida insurance regulatory authority is a twelve-month, automatically renewing CD. The par value of the securities we deposited with the South Carolina and Massachusetts insurance regulatory authorities are $1,000 and $100, respectively.

The table below summarizes our fixed maturities at March 31, 2012 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.



	March 31, 2012
	Cost or Amortized Cost		Percent of Total		Fair Value		Percent of Total
Due in one year or less	$	43,614	36.8	%	$	43,606	35.6	%
Due after one year through five years	25,540		21.6		26,119		21.4
Due after five years through ten years	33,396		28.2		35,550		29.0
Due after ten years	15,920		13.4		17,177		14.0
Total	$	118,470	100.0	%	$	122,452	100.0	%

The following table summarizes our net investment income by major investment category:



	Three Months Ended March 31,
	2012			2011
Fixed maturities	$	679		$	494
Equity securities	34			36
Cash, cash equivalents and short-term investments	23			4
Other investments	11			—
Net investment income	$	747		$	534
Investment expenses	(71		)	(60		)
Net investment income, less investment expenses	$	676		$	474

The following table presents an aging of our unrealized investment losses by investment class:



	Less Than Twelve Months					Twelve Months or More
	Number of Securities*	Gross Unrealized Losses		Fair Value		Number of Securities*	Gross Unrealized Losses		Fair Value
March 31, 2012
U.S. government and agency securities	3	$	60	$	17,700	—	$	—	$	—
Corporate securities	1	3		1,042		—	—		—
Redeemable preferred stocks	2	6		326		2	3		223
Total fixed maturities	6	$	69	$	19,068	2	$	3	$	223
Common stocks	15	20		677		—	—		—
Nonredeemable preferred stocks	—	—		—		3	21		456
Total equity securities	15	$	20	$	677	3	$	21	$	456
Total	21	$	89	$	19,745	5	$	24	$	679

December 31, 2011
U.S. government and agency securities	2	$	90	$	16,915	1	$	21	$	1,627
Corporate securities	3	145		3,924		—	—		—
Redeemable preferred stocks	—	—		—		4	21		537
Total fixed maturities	5	$	235	$	20,839	5	$	42	$	2,164
Common stocks	12	40		740		1	3		9
Nonredeemable preferred stocks	—	—		—		3	19		458
Total equity securities	12	$	40	$	740	4	$	22	$	467
Total	17	$	275	$	21,579	9	$	64	$	2,631

* This amount represents the actual number of discrete securities, not the number of shares of those securities. The number is not presented in thousands.

During our quarterly evaluations of our securities for impairment, we determined that none of our investments in debt and equity securities that reflected an unrealized loss position were other-than-temporarily impaired. The issuers of our debt securities continue to make interest payments on a timely basis and have not suffered any credit rating reductions. We do not intend to sell nor is it likely that we would be required to sell the debt securities before we recover our amortized cost basis. All the issuers of the equity securities we own had near-term prospects that indicated we could recover our cost basis, and we also have the ability and the intent to hold these securities until their value equals or exceeds their cost.

The following table presents the fair value measurements of our financial instruments by level at March 31, 2012 and December 31, 2011:



March 31, 2012	Total		Level 1		Level 2
U.S. government and agency securities	$	48,175	$	26,972	$	21,203
States, municipalities and political subdivisions	18,509		—		18,509
Corporate securities	55,219		—		55,219
Redeemable preferred stocks	549		549		—
Total fixed maturities	$	122,452	$	27,521	$	94,931
Common stocks	3,358		3,358		—
Nonredeemable preferred stocks	456		456		—
Total equity securities	$	3,814	$	3,814	$	—
Other long-term investments	300		300		—
Total investments	$	126,566	$	31,635	$	94,931

December 31, 2011
U.S. government and agency securities	$	48,119	$	24,176	$	23,943
States, municipalities and political subdivisions	18,366		—		18,366
Corporate securities	53,356		—		53,356
Redeemable preferred stocks	537		537		—
Total fixed maturities	$	120,378	$	24,713	$	95,665
Common stocks	3,123		3,123		—
Nonredeemable preferred stocks	458		458		—
Total equity securities	$	3,581	$	3,581	$	—
Other long-term investments	300		300		—
Total investments	$	124,259	$	28,594	$	95,665

We do not hold any investments that require unobservable inputs to determine their fair value. At the end of each quarter, we determine whether we need to transfer the fair values of any securities between levels of the fair value heirarchy and, if so, we report the transfer as of the end of the quarter. We made no such transfers during the three months ended March 31, 2012.

For our investments in U.S. government securities that do not have prices in active markets, agency securities, state and municipal governments, and corporate bonds, we obtain the fair values from Synovus Trust Company, NA, which uses a third-party valuation service. The valuation service calculates prices for our investments in the aforementioned security types on a month-end basis by using several matrix-pricing methodologies that incorporate inputs from various sources. The model the valuation service uses to price U.S. government securities and securities of states and municipalities incorporates inputs from active market makers and inter-dealer brokers. To price corporate bonds and agency securities, the valuation service calculates non-call yield spreads on all issuers, uses option-adjusted yield spreads to account for any early redemption features, then adds final spreads to the U.S. Treasury curve at 3 p.m. (ET) as of quarter end. Since the inputs the valuation service uses in their calculations are not quoted prices in active markets, but are observable inputs, they represent Level 2 inputs.