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Investments
 12 Months Ended
Dec. 31, 2019
Investments [Abstract]  
Investments Investments
Available-for-sale investments
The following tables summarize the Company’s available-for-sale investments:
 
 
December 31, 2019

 
Amortized Cost
 
Gross Unrealized Holding Gains
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
 
(in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
 
$
110

 
$
2

 
$
—

 
$
112

Obligations of states, municipalities and political subdivisions
 
166,312

 
7,542

 
(961
)
 
172,893

Corporate and other securities
 
180,287

 
4,736

 
(255
)
 
184,768

Commercial mortgage and asset-backed securities
 
195,750

 
2,930

 
(710
)
 
197,970

Residential mortgage-backed securities
 
172,358

 
1,819

 
(388
)
 
173,789

Total available-for-sale investments
 
$
714,817

 
$
17,029

 
$
(2,314
)
 
$
729,532

 
 
December 31, 2018
 
 
Amortized Cost
 
Gross Unrealized Holding Gains
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
 
(in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
 
$
610

 
$
2

 
$
(1
)
 
$
611

Obligations of states, municipalities and political subdivisions
 
153,884

 
2,010

 
(1,294
)
 
154,600

Corporate and other securities
 
97,889

 
264

 
(1,401
)
 
96,752

Commercial mortgage and asset-backed securities
 
151,137

 
252

 
(1,522
)
 
149,867

Residential mortgage-backed securities
 
110,717

 
354

 
(2,650
)
 
108,421

Total available-for-sale investments
 
$
514,237

 
$
2,882

 
$
(6,868
)
 
$
510,251


Available-for-sale investments in a loss position
The Company regularly reviews all its available-for-sale investments with unrealized losses to assess whether the declines in the securities’ fair value are deemed to be an other-than-temporary impairment ("OTTI"). The Company considers a number of factors in completing its OTTI review, including the length of time and the extent to which a security's fair value has been below cost and the financial condition of an issuer. In addition to specific issuer information, the Company also evaluates the current market and interest rate environment. Generally, a change in a security’s value caused by a change in the market or interest rate environment does not constitute an OTTI, but rather a temporary decline in fair value.
For fixed-maturity securities, the Company also considers whether it intends to sell the security or if it is more likely than not that it will be required to sell the security before recovery and the ability to recover all amounts outstanding
when contractually due. When assessing whether it intends to sell a fixed-maturity security or if it is likely to be required to sell a fixed-maturity security before recovery of its amortized cost, the Company evaluates facts and circumstances including, but not limited to, decisions to reposition the investment portfolio, potential sales of investments to meet cash flow needs and potential sales of investments to capitalize on favorable pricing.
For fixed-maturity securities where a decline in fair value is considered to be other-than-temporary and the Company intends to sell the security, or it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost, an impairment is recognized in net income based on the fair value of the security at the time of assessment, resulting in a new cost basis for the security. If the decline in fair value of a fixed-maturity security below its amortized cost is considered to be other-than-temporary based upon other considerations, the Company compares the estimated present value of the cash flows expected to be collected to the amortized cost of the security. The extent to which the estimated present value of the cash flows expected to be collected is less than the amortized cost of the security represents the credit-related portion of the OTTI, which is recognized in net income, resulting in a new cost basis for the security. Any remaining decline in fair value represents the noncredit portion of the OTTI, which is recognized in other comprehensive income
The following tables summarize gross unrealized losses and fair value for available-for-sale securities by length of time that the securities have continuously been in an unrealized loss position:
 
 
December 31, 2019
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
 
(in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Obligations of states, municipalities and political subdivisions
 
28,997

 
(961
)
 
254

 
—

 
29,251

 
(961
)
Corporate and other securities
 
22,409

 
(251
)
 
1,509

 
(4
)
 
23,918

 
(255
)
Commercial mortgage and asset-backed securities
 
37,723

 
(303
)
 
46,623

 
(407
)
 
84,346

 
(710
)
Residential mortgage-backed securities
 
36,986

 
(148
)
 
24,815

 
(240
)
 
61,801

 
(388
)
Total available-for-sale investments
 
$
126,115

 
$
(1,663
)
 
$
73,201

 
$
(651
)
 
$
199,316

 
$
(2,314
)

At December 31, 2019, the Company held 137 fixed-maturity securities with a total estimated fair value of $199.3 million and gross unrealized losses of $2.3 million. Of those securities, 51 were in a continuous unrealized loss position for greater than one year. Unrealized losses were caused by interest rate changes or other market factors and were not credit specific issues. At December 31, 2019, 89% of the Company’s fixed-maturity securities were rated "A-" or better and all of Company's fixed-maturity securities made expected coupon payments under the contractual terms of the securities. Based on its review, the Company concluded that there were no other-than-temporary impairments from fixed-maturity securities with unrealized losses for the year ended December 31, 2019.

 
 
December 31, 2018
 
 
Less than 12 Months
 
12 Months or Longer
 
Total
 
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
Estimated Fair Value
 
Gross Unrealized Holding Losses
 
 
(in thousands)
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
U.S. Treasury securities and obligations of U.S. government agencies
 
$
—

 
$
—

 
$
499

 
$
(1
)
 
$
499

 
$
(1
)
Obligations of states, municipalities and political subdivisions
 
42,718

 
(440
)
 
34,326

 
(854
)
 
77,044

 
(1,294
)
Corporate and other securities
 
62,045

 
(890
)
 
12,092

 
(511
)
 
74,137

 
(1,401
)
Commercial mortgage and asset-backed securities
 
93,247

 
(1,017
)
 
25,746

 
(505
)
 
118,993

 
(1,522
)
Residential mortgage-backed securities
 
24,571

 
(155
)
 
55,638

 
(2,495
)
 
80,209

 
(2,650
)
Total available-for-sale investments
 
$
222,581

 
$
(2,502
)
 
$
128,301

 
$
(4,366
)
 
$
350,882

 
$
(6,868
)

At December 31, 2018, the Company held 317 fixed-maturity securities with a total estimated fair value of $350.9 million and gross unrealized losses of $6.9 million. Of these securities, 158 were in a continuous unrealized loss position for greater than one year. Unrealized losses were caused by interest rate changes or other market factors and were not credit specific issues. At December 31, 2018, 86.4% of the Company’s fixed-maturity securities were rated "A-" or better and all of Company's fixed-maturity securities made expected coupon payments under the contractual terms of the securities. Based on its review, the Company concluded that there were no other-than-temporary impairments from the fixed-maturity or equity securities with unrealized losses at December 31, 2018.
Contractual maturities of available-for-sale fixed-maturity securities
The amortized cost and estimated fair value of available-for-sale fixed-maturity securities at December 31, 2019 are summarized, by contractual maturity, as follows:
 
 
Amortized
 
Estimated
 
 
Cost
 
Fair Value
 
 
(in thousands)
Due in one year or less
 
$
9,940

 
$
9,990

Due after one year through five years
 
115,480

 
118,611

Due after five years through ten years
 
79,235

 
82,314

Due after ten years
 
142,054

 
146,858

Commercial mortgage and asset-backed securities
 
195,750

 
197,970

Residential mortgage-backed securities
 
172,358

 
173,789

Total fixed maturities
 
$
714,817

 
$
729,532


Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties, and the lenders may have the right to put the securities back to the borrower.
Net investment income
The following table presents the components of net investment income:
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in thousands)
Interest:
 
 
 
 
 
 
Taxable bonds
 
$
14,853

 
$
9,474

 
$
6,233

Municipal bonds (tax exempt)
 
3,692

 
4,298

 
3,619

Cash equivalents and short-term investments
 
842

 
1,017

 
678

Dividends on equity securities
 
2,136

 
2,014

 
1,041

Gross investment income
 
21,523

 
16,803

 
11,571

Investment expenses
 
(1,390
)
 
(1,115
)
 
(1,002
)
Net investment income
 
$
20,133

 
$
15,688

 
$
10,569


Realized investment gains and losses
The following table presents realized investment gains and losses:
 
 
Year Ended December 31,
 
 
2019
 
2018
 
2017
 
 
(in thousands)
Fixed-maturity securities:
 
 
 
 
 
 
Realized gains
 
$
567

 
$
263

 
$
220

Realized losses
 
(79
)
 
(17
)
 
(69
)
Net realized gains from fixed-maturity securities
 
488

 
246

 
151

 
 
 
 
 
 
 
Equity securities:
 
 
 
 
 
 
Realized gains
 
556

 
57

 
—

Realized losses
 
(688
)
 
(22
)
 
—

Net realized gains (losses) from equity securities
 
(132
)
 
35

 
—

 
 
 
 
 
 
 
Short-term securities - realized gain
 
3

 
—

 
—

Net realized investment gains
 
$
359

 
$
281

 
$
151


Change in net unrealized gains (losses) on investments
The change in net unrealized gains for fixed-maturity securities was $18.7 million for the year ended December 31, 2019. The change in net unrealized losses for fixed-maturity securities was $6.9 million for the year ended December 31, 2018. The change in net unrealized gains for fixed-maturity securities was $5.2 million for the year ended December 31, 2017. For the year ended December 31, 2017, the change in net unrealized gains for equity securities was $4.2 million.
Insurance – statutory deposits
The Company had invested assets with a carrying value of $6.9 million and $6.9 million on deposit with state regulatory authorities at December 31, 2019 and 2018, respectively.