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 nine-months ended September 30, 2017 and 2016.



	For the Nine-Months Ended Ended September 30,
							Net realized
	Proceeds		Gains		Losses		gain
2017
Fixed maturity securities	$	5,670,040	$	29,328	$	(21)	$	29,307
Common stocks		2,154,214		415,471		(2,752)		412,719
Preferred stocks		55,199		919		—		919
2016
Fixed maturity securities	$	9,827,239	$	155,428	$	(3,732)	$	151,696
Equity securities	$	1,590,088	$	80,083	$	—	$	80,083

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



	Amortized Cost		Fair Value
Due in one year or less	$	2,001,464	$	2,004,240
Due after one year through five years		19,220,500		19,783,690
Due after five years through 10 years		14,618,497		15,344,456
Due after 10 years		19,339,597		19,990,535
Asset and mortgage backed securities without a specific due date		29,887,277		29,917,463
Total fixed maturity securities	$	85,067,335	$	87,040,384

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 Septembeeer 30, 2017 and December 31, 2016:



	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2017
Fixed maturity securities:
U.S. treasury	$	1,346,253	$	1,343,760	$	1,912	$	(4,405)
MBS/ABS/CMBS		29,887,277		29,917,463		216,031		(185,845)
Corporate		30,546,761		31,657,013		1,128,163		(17,911)
Municipal		23,287,044		24,122,148		870,229		(35,125)
Total fixed maturity securities		85,067,335		87,040,384		2,216,335		(243,286)
Equity securities:
Common stocks		10,247,724		11,264,700		1,024,776		(7,800)
Preferred stocks		3,670,999		3,785,161		142,736		(28,574)
Total equity securities		13,918,723		15,049,861		1,167,512		(36,374)
Total AFS securities	$	98,986,058	$	102,090,245	$	3,383,847	$	(279,660)



	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 $14,092,583 and $10,288,405 and commercial mortgage backed securities of $7,529,511 and $7,600,109 at September 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 September 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.



	September 30, 2017						December 31, 2016
			12 Mos						12 Mos
	< 12 Mos.		& Greater		Total		< 12 Mos.		& Greater		Total
U.S. Treasury
Fair value	$	995,313	$	—	$	995,313	$	993,576	$	—	$	993,576
Cost or Amortized cost		999,718		—		999,718		999,520		—		999,520
Unrealized Loss		(4,405)		—		(4,405)		(5,944)		—		(5,944)

MBS/ABS/CMBS
Fair value		9,212,756		2,075,299		11,288,055		10,712,987		322,641		11,035,628
Cost or Amortized cost		9,316,739		2,157,161		11,473,900		10,968,840		323,901		11,292,741
Unrealized Loss		(103,983)		(81,862)		(185,845)		(255,853)		(1,260)		(257,113)

Corporate
Fair value		1,571,361		1,983,352		3,554,713		5,476,442		984,115		6,460,557
Cost or Amortized cost		1,574,106		1,998,518		3,572,624		5,552,624		999,376		6,552,000
Unrealized Loss		(2,745)		(15,166)		(17,911)		(76,182)		(15,261)		(91,443)

Municipal
Fair value		1,396,750		858,505		2,255,255		2,995,362		—		2,995,362
Cost or Amortized cost		1,406,640		883,740		2,290,380		3,130,204		—		3,130,204
Unrealized Loss		(9,890)		(25,235)		(35,125)		(134,842)		—		(134,842)

Subtotal, fixed income
Fair value		13,176,180		4,917,156		18,093,336		20,178,367		1,306,756		21,485,123
Cost or Amortized cost		13,297,203		5,039,419		18,336,622		20,651,188		1,323,277		21,974,465
Unrealized Loss		(121,023)		(122,263)		(243,286)		(472,821)		(16,521)		(489,342)

Common Stock
Fair value		647,000		—		647,000		—		445,872		445,872
Cost or Amortized cost		654,800		—		654,800		—		479,801		479,801
Unrealized Loss		(7,800)		—		(7,800)		—		(33,929)		(33,929)

Preferred Stock
Fair value		643,660		425,875		1,069,535		2,328,345		—		2,328,345
Cost or Amortized cost		662,025		436,084		1,098,109		2,460,791		—		2,460,791
Unrealized Loss		(18,365)		(10,209)		(28,574)		(132,446)		—		(132,446)

Total
Fair value		14,466,840		5,343,031		19,809,871		22,506,712		1,752,628		24,259,340
Cost or amortized cost		14,614,028		5,475,503		20,089,531		23,111,979		1,803,078		24,915,057
Unrealized Loss	$	(147,188)	$	(132,472)	$	(279,660)	$	(605,267)	$	(50,450)	$	(655,717)

As of September 30, 2017, the Company held 9 common stock and preferred stock securities in an unrealized loss position. Of these 9 securities, three have been in an unrealized loss position for 12 consecutive months or longer and represent $10,209 in unrealized losses. 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 45 securities in an unrealized loss position as of September 30, 2017. Of these 45 securities, 11 have been in an unrealized loss position for 12 consecutive months or longer and represent $122,263 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 nine months ended September 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 and subsequently sold in the third quarter of 2017. During the first nine months of 2016, the Company recognized $205,834 of OTTI on one common stock security and $6,897 of OTTI on one fixed income security. For all fixed income securities at a loss at September 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 September 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 September 30, 2017 and December 31, 2016.