2. INVESTMENTS

The Company’s investments include fixed income debt securities and common and preferred stock equity securities. All of the Company’s investments are presented as available-for-sale (AFS), which are carried at fair value. When available, quoted market prices are obtained to determine fair value for the Company’s investments. If a quoted market price is not available, fair value is estimated using a secondary pricing source or using quoted market prices of similar securities. The Company has no investment securities for which fair value is determined using Level 3 inputs as defined in Note 3 – Fair Value Disclosures. Realized gains and losses on disposition of investments are based on specific identification of the investments sold on the settlement date, which does not differ significantly from trade date accounting.

The following is a summary of the proceeds from sales, maturities, and calls of available-for-sale securities and the related gross realized gains and losses for the six-months ended June 30, 2017 and 2016.



	For the Six-Months Ended Ended June 30,
							Net realized
	Proceeds		Gains		Losses		gain
2017
Fixed maturity securities	$	4,414,597	$	29,328	$	(21)	$	29,307
Common stocks		1,955,715		415,471		—		415,471
2016
Fixed maturity securities	$	7,495,759	$	148,842	$	(10,624)	$	138,218

The amortized cost and estimated fair value of fixed income securities at June 30, 2017, by contractual maturity, are shown as follows:



	Amortized Cost		Fair Value
Due in one year or less	$	2,252,559	$	2,258,033
Due after one year through five years		18,973,053		19,521,392
Due after five years through 10 years		15,001,686		15,712,972
Due after 10 years		18,458,796		18,985,877
Asset and mortgage backed securities without a specific due date		26,547,073		26,527,701
Total fixed maturity securities	$	81,233,167	$	83,005,975

Expected maturities may differ from contractual maturities due to call provisions on some existing securities.

The following table is a schedule of cost or amortized cost and estimated fair values of investments in fixed income and equity securities as of June 30, 2017 and December 31, 2016:



	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2017
Fixed maturity securities:
U.S. treasury	$	1,345,794	$	1,344,461	$	2,526	$	(3,859)
MBS/ABS/CMBS		26,547,073		26,527,701		199,808		(219,180)
Corporate		30,452,133		31,455,183		1,041,383		(38,333)
Municipal		22,888,167		23,678,630		845,066		(54,603)
Total fixed maturity securities		81,233,167		83,005,975		2,088,783		(315,975)
Equity securities:
Common stocks		9,823,126		10,590,764		799,138		(31,500)
Preferred stocks		3,669,342		3,782,049		122,402		(9,695)
Total equity securities		13,492,468		14,372,813		921,540		(41,195)
Total AFS securities	$	94,725,635	$	97,378,788	$	3,010,323	$	(357,170)



	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2016
Fixed maturity securities:
U.S. treasury	$	1,244,542	$	1,241,125	$	2,527	$	(5,944)
MBS/ABS/CMBS		19,751,138		19,677,200		183,175		(257,113)
Corporate		27,593,568		28,344,907		842,782		(91,443)
Municipal		14,339,843		14,870,791		665,790		(134,842)
Total fixed maturity securities		62,929,091		64,134,023		1,694,274		(489,342)
Equity securities:
Common stocks		6,311,708		6,982,547		704,768		(33,929)
Preferred stocks		2,925,434		2,798,413		5,425		(132,446)
Total equity securities		9,237,142		9,780,960		710,193		(166,375)
Total AFS securities	$	72,166,233	$	73,914,983	$	2,404,467	$	(655,717)

Included within MBS/ABS/CMBS, as defined in Note 3 – Fair Value Disclosures, are residential mortgage backed securities with fair values of 14,636,934 and $10,288,405 and commercial mortgage backed securities of $7,555,799 and $7,600,109 at June 30, 2017 and December 31, 2016, respectively.

ANALYSIS

The following table is also used as part of the impairment analysis and displays the total value of securities that were in an unrealized loss position as of June 30, 2017, and December 31, 2016. The table segregates the securities based on type, noting the fair value, cost (or amortized cost), and unrealized loss on each category of investment as well as in total. The table further classifies the securities based on the length of time they have been in an unrealized loss position.



	June 30, 2017						December 31, 2016
			12 Mos						12 Mos
	< 12 Mos.		& Greater		Total		< 12 Mos.		& Greater		Total
U.S. Treasury
Fair value	$	995,793	$	—	$	995,793	$	993,576	$	—	$	993,576
Cost or Amortized cost		999,652		—		999,652		999,520		—		999,520
Unrealized Loss		(3,859)		—		(3,859)		(5,944)		—		(5,944)

MBS/ABS/CMBS
Fair value		12,082,093		157,116		12,239,209		10,712,987		322,641		11,035,628
Cost or Amortized cost		12,300,773		157,616		12,458,389		10,968,840		323,901		11,292,741
Unrealized Loss		(218,680)		(500)		(219,180)		(255,853)		(1,260)		(257,113)

Corporate
Fair value		3,588,228		989,820		4,578,048		5,476,442		984,115		6,460,557
Cost or Amortized cost		3,616,936		999,445		4,616,381		5,552,624		999,376		6,552,000
Unrealized Loss		(28,708)		(9,625)		(38,333)		(76,182)		(15,261)		(91,443)

Municipal
Fair value		2,532,093		—		2,532,093		2,995,362		—		2,995,362
Cost or Amortized cost		2,586,696		—		2,586,696		3,130,204		—		3,130,204
Unrealized Loss		(54,603)		—		(54,603)		(134,842)		—		(134,842)

Subtotal, fixed income
Fair value		19,198,207		1,146,936		20,345,143		20,178,367		1,306,756		21,485,123
Cost or Amortized cost		19,504,057		1,157,061		20,661,118		20,651,188		1,323,277		21,974,465
Unrealized Loss		(305,850)		(10,125)		(315,975)		(472,821)		(16,521)		(489,342)

Common Stock
Fair value		623,300		—		623,300		—		445,872		445,872
Cost or Amortized cost		654,800		—		654,800		—		479,801		479,801
Unrealized Loss		(31,500)		—		(31,500)		—		(33,929)		(33,929)

Preferred Stock
Fair value		705,550		—		705,550		2,328,345		—		—
Cost or Amortized cost		715,245		—		715,245		2,460,791		—		—
Unrealized Loss		(9,695)		—		(9,695)		(132,446)		—		(132,446)

Total
Fair value		20,527,057		1,146,936		21,673,993		22,506,712		1,752,628		24,259,340
Cost or amortized cost		20,874,102		1,157,061		22,031,163		23,111,979		1,803,078		24,915,057
Unrealized Loss	$	(347,045)	$	(10,125)	$	(357,170)	$	(605,267)	$	(50,450)	$	(655,717)

As of June 30, 2017, the Company held 6 common equity and preferred stock securities in an unrealized loss position. Of these 6 securities, none have been in an unrealized loss position for 12 consecutive months or longer. As of December 31, 2016, the Company held 21 equity securities that were in unrealized loss positions. Of these 21 securities, two were in an unrealized loss position for 12 consecutive months or longer and represented $33,929 in unrealized losses.

The fixed income portfolio contained 49 securities in an unrealized loss position as of June 30, 2017. Of these 49 securities, three have been in an unrealized loss position for 12 consecutive months or longer and represent $10,125 in unrealized losses. All fixed income securities in the investment portfolio continue to pay the expected coupon payments under the contractual terms of the securities. Credit-related impairments on fixed income securities that we do not plan to sell, and for which we are not more likely than not to be required to sell, are recognized in net earnings. Any non-credit related impairment is recognized in comprehensive earnings. Based on management’s analysis, the fixed income portfolio is of a high credit quality and it is believed it will recover the amortized cost basis of the fixed income securities. Management monitors the credit quality of the fixed income investments to assess if it is probable that the Company will receive its contractual or estimated cash flows in the form of principal and interest.

For the six months ended June 30, 2017, the Company recognized in net earnings $57,316 of other-than-temporary impairment (OTTI) losses on an ETF included in common stock that was impaired during the second quarter of 2017. During the first six months of 2016, the Company did not recognize any impairment losses. For all fixed income securities at a loss at June 30, 2017, management believes it is probable the Company will receive all contractual payments in the form of principal and interest. In addition, the Company is not required to, nor does it intend to sell these investments prior to recovering the entire amortized cost basis of each security, which may be maturity. Management does not consider these investments to be other-than-temporarily impaired at June 30, 2017. Based on managent’s analysis, it was concluded that the fixed maturity securities in an unrealized loss position were not other-than-temporarily impared at June 30, 2017 and December 31, 2016.