Investments

The cost or amortized cost, gross unrealized gain or loss, and estimated fair value of the investments in securities classified as available for sale at September 30, 2019 and December 31, 2018, were as follows (dollars in thousands):



	September 30, 2019
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Debt Securities:
U.S. Government	$	13,917	$	72	$	(10	)	$	13,979
State and local government	14,091		582		—			14,673
Corporate debt	37,308		855		(14		)	38,149
Asset-backed securities	20,167		84		(57		)	20,194
Mortgage-backed securities	30,206		147		(221		)	30,132
Commercial mortgage-backed securities	4,271		193		—			4,464
Collateralized mortgage obligations	4,086		31		(4		)	4,113
Total debt securities available for sale	$	124,046	$	1,964	$	(306	)	$	125,704



	December 31, 2018
	Cost or Amortized Cost		Gross Unrealized					Estimated Fair Value
			Gains		Losses
Debt Securities:
U.S. Government	$	15,360	$	3	$	(178	)	$	15,185
State and local government	15,847		115		(174		)	15,788
Corporate debt	30,423		74		(651		)	29,846
Asset-backed securities	24,468		24		(208		)	24,284
Mortgage-backed securities	30,377		18		(1,155		)	29,240
Commercial mortgage-backed securities	4,025		5		(77		)	3,953
Collateralized mortgage obligations	2,178		9		(43		)	2,144
Total debt securities available for sale	$	122,678	$	248	$	(2,486	)	$	120,440

The following table summarizes the aggregate fair value and gross unrealized losses, by security type, of the available-for-sale securities in unrealized loss positions. The table segregates the holdings based on the length of time that individual securities have been in a continuous unrealized loss position, as follows (dollars in thousands):



	September 30, 2019
	Less than 12 months						Greater than 12 months						Total
	No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses			No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses			No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
Debt Securities:
U.S. Government	—	$	—	$	—		8	$	5,768	$	(10	)	8	$	5,768	$	(10	)
State and local government	—	—		—			1	63		—			1	63		—
Corporate debt	1	504		(5		)	3	1,692		(9		)	4	2,196		(14		)
Asset-backed securities	7	4,658		(10		)	17	9,035		(47		)	24	13,693		(57		)
Mortgage-backed securities	3	3,111		(1		)	23	14,731		(220		)	26	17,842		(221		)
Commercial mortgage-backed securities	1	4		—			1	457		—			2	461		—
Collateralized mortgage obligations	7	1,420		(4		)	—	—		—			7	1,420		(4		)
Total debt securities available for sale	19	$	9,697	$	(20	)	53	$	31,746	$	(286	)	72	$	41,443	$	(306	)



	December 31, 2018
	Less than 12 months						Greater than 12 months						Total
	No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses			No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses			No. of Issues	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
Debt Securities:
U.S. Government	1	$	2,470	$	(24	)	16	$	11,725	$	(154	)	17	$	14,195	$	(178	)
State and local government	21	4,935		(40		)	16	4,273		(134		)	37	9,208		(174		)
Corporate debt	36	12,096		(140		)	25	11,993		(511		)	61	24,089		(651		)
Asset-backed securities	25	17,743		(148		)	9	4,166		(60		)	34	21,909		(208		)
Mortgage-backed securities	20	5,474		(138		)	30	21,715		(1,017		)	50	27,189		(1,155		)
Commercial mortgage-backed securities	4	1,082		(12		)	3	2,632		(65		)	7	3,714		(77		)
Collateralized mortgage obligations	4	116		(1		)	6	1,587		(42		)	10	1,703		(43		)
Total debt securities available for sale	111	$	43,916	$	(503	)	105	$	58,091	$	(1,983	)	216	$	102,007	$	(2,486	)

The Company analyzed its investment portfolio in accordance with its other-than-temporary impairment ("OTTI") review procedures and determined the Company did not need to record a credit-related OTTI loss in net income, nor recognize a non-credit related OTTI loss in other comprehensive income for the three and nine months ended September 30, 2019 and 2018.

The Company’s sources of net investment income are as follows (dollars in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Debt securities	$	861		$	801		$	2,716		$	2,495
Equity securities	247			33			322			98
Cash, cash equivalents and short-term investments	156			19			342			55
Total investment income	1,264			853			3,380			2,648
Investment expenses	(54		)	(67		)	(209		)	(223		)
Net investment income	$	1,210		$	786		$	3,171		$	2,425

The following table summarizes the gross realized gains and losses from sales, calls or maturities of available-for-sale debt and equity securities (dollars in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Debt securities:
Gross realized gains	$	8		$	52		$	231		$	54
Gross realized losses	(1		)	(131		)	(53		)	(146		)
Total debt securities	7			(79		)	178			(92		)
Equity securities:
Gross realized gains	397			84			985			290
Gross realized losses	(14		)	(26		)	(39		)	(46		)
Total equity securities	383			58			946			244
Total net realized investment gains (losses)	$	390		$	(21	)	$	1,124		$	152

Proceeds from the sales of available-for-sale debt securities were $24.0 million and $23.5 million for the nine months ended September 30, 2019 and 2018, respectively. The gross realized gains and losses from the sales of available-for-sale debt securities as of September 30, 2019, were 231,000 and 53,000, respectively. The gross realized gains and losses from the sales of available-for-sale debt securities as of September 30, 2018 were $6,000 and $90,000, respectively.

The Company carries other equity investments that do not have a readily determinable fair value at cost, less impairment or observable changes in price. We review these investments for impairment during each reporting period. There was no impairment or observable changes in price recorded during 2019 related to the Company's equity securities without readily determinable fair value. These investments are a component of Other Assets in the Consolidated Balance Sheets.

The table below summarizes the amortized cost and fair value of available-for-sale debt securities by contractual maturity at September 30, 2019. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties (dollars in thousands):



	Amortized Cost		Estimated Fair Value
Due in one year or less	$	9,583	$	9,588
Due after one year through five years	31,619		32,158
Due after five years through ten years	14,762		15,314
Due after ten years	9,352		9,741
Securities with contractual maturities	65,316		66,801
Asset-backed securities	20,167		20,194
Mortgage-backed securities	30,206		30,132
Commercial mortgage-backed securities	4,271		4,464
Collateralized mortgage obligations	4,086		4,113
Total debt securities	$	124,046	$	125,704

At September 30, 2019 and December 31, 2018, the Insurance Company Subsidiaries had an aggregate of $8.6 million and $8.5 million, respectively, on deposit in trust accounts to meet the deposit requirements of various state insurance departments. At September 30, 2019 and December 31, 2018, the Company had $53.6 million and $45.4 million, respectively, held in trust accounts to meet collateral requirements with other third-party insurers, relating to various fronting arrangements. There are withdrawal and other restrictions on these deposits, including the type of investments that may be held, however, the Company may generally invest in high-grade bonds and short-term investments and earn interest on the funds.