2. INVESTMENTS

The Company’s investments are primarily composed of fixed income debt securities and common and preferred stock equity securities. We carry our equity securities at fair value and categorize all our fixed maturity debt securities 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.

Available-for-Sale Fixed Maturity and Equity Securities

The following tables are a summary of the proceeds from sales, maturities, and calls of AFS fixed maturity and equity securities and the related gross realized gains and losses.



	For the Three-Months Ended March 31,
							Net Realized
	Proceeds		Gains		Losses		Gains (Losses)
2020
Fixed maturity securities	$	3,802,593	$	233,693	$	(926)	$	232,767
Common stocks		524,818		47,126		(173,499)		(126,373)
Preferred stocks		91,838		—		(10,762)		(10,762)
2019
Fixed maturity securities	$	5,778,893	$	25,589	$	(11,619)	$	13,970
Common stocks		553,413		63,577		(124,973)		(61,396)

The amortized cost and estimated fair value of fixed income securities at March 31, 2020, by contractual maturity, are shown as follows:



	Amortized Cost		Fair Value
Due in one year or less	$	3,228,198	$	3,242,332
Due after one year through five years		18,003,293		18,394,229
Due after five years through 10 years		15,530,315		15,833,388
Due after 10 years		19,380,384		20,331,864
Asset and mortgage backed securities without a specific due date		33,479,339		33,387,560
Redeemable preferred stocks		215,805		221,438
Total fixed maturity securities	$	89,837,334	$	91,410,811

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 securities classified as available for sale at March 31, 2020 and December 31, 2019:



	Cost or				Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2020
Fixed maturity securities:
U.S. Treasury	$	1,352,761	$	1,392,031	$	39,270	$	—
MBS/ABS/CMBS		33,479,339		33,387,560		585,105		(676,884)
Corporate		38,473,713		39,357,281		1,516,966		(633,398)
Municipal		16,315,716		17,052,501		827,188		(90,403)
Redeemable preferred stock		215,805		221,438		6,270		(637)
Total fixed maturity securities	$	89,837,334	$	91,410,811	$	2,974,799	$	(1,401,322)



					Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2019
Fixed maturity securities:
U.S. Treasury	$	800,462	$	800,219	$	684	$	(927)
MBS/ABS/CMBS		33,802,911		34,290,995		540,743		(52,659)
Corporate		39,442,202		41,915,103		2,482,378		(9,477)
Municipal		14,302,840		15,081,255		808,081		(29,666)
Total fixed maturity securities	$	88,348,415	$	92,087,572	$	3,831,886	$	(92,729)

All the Company’s collateralized securities carry an average credit rating of AA+ by one or more major rating agencies and continue to pay according to contractual terms. Included within MBS/ABS/CMBS, as defined in Note 3 – Fair Value Disclosures, are residential mortgage backed securities with fair values of $9,555,196 and $9,909,462 and commercial mortgage backed securities of $13,136,719 and $13,408,898 at March 31, 2020 and December 31, 2019, respectively.

ANALYSIS

The following tables are also used as part of the impairment analysis and displays the total value of securities that were in an unrealized loss position as of March 31, 2020 and December 31, 2019. The tables segregate 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.



	March 31, 2020						December 31, 2019
			12 Months						12 Months
	< 12 Months		& Greater		Total		< 12 Months		& Greater		Total
Fixed Maturity Securities:
U.S. Treasury
Fair value	$	—	$	—	$	—	$	—	$	699,391	$	699,391
Amortized cost		—		—		—		—		700,318		700,318
Unrealized loss		—		—		—		—		(927)		(927)
MBS/ABS/CMBS
Fair value		12,453,701		1,894,665		14,348,366		6,398,581		5,056,732		11,455,313
Amortized cost		12,969,112		2,056,138		15,025,250		6,420,488		5,087,484		11,507,972
Unrealized loss		(515,411)		(161,473)		(676,884)		(21,907)		(30,752)		(52,659)
Corporate
Fair value		6,799,881		—		6,799,881		1,396,706		—		1,396,706
Amortized cost		7,433,279		—		7,433,279		1,406,183		—		1,406,183
Unrealized loss		(633,398)		—		(633,398)		(9,477)		—		(9,477)
Municipal
Fair value		3,446,768		—		3,446,768		1,969,468		—		1,969,468
Amortized cost		3,537,171		—		3,537,171		1,999,134		—		1,999,134
Unrealized loss		(90,403)		—		(90,403)		(29,666)		—		(29,666)
Subtotal, fixed income
Fair value		22,700,350		1,894,665		24,595,015		9,764,755		5,756,123		15,520,878
Amortized cost		23,939,562		2,056,138		25,995,700		9,825,805		5,787,802		15,613,607
Unrealized loss		(1,239,212)	$	(161,473)	$	(1,400,685)	$	(61,050)	$	(31,679)	$	(92,729)
Redeemable preferred stock
Fair value		71,588		—		71,588		—		—		—
Cost		72,225		—		72,225		—		—		—
Unrealized loss		(637)		—		(637)		—		—		—
Total
Fair value		22,771,938		1,894,665		24,666,603		9,764,755		5,756,123		15,520,878
Amortized cost		24,011,787		2,056,138		26,067,925		9,825,805		5,787,802		15,613,607
Unrealized loss	$	(1,239,849)	$	(161,473)	$	(1,401,322)	$	(61,050)	$	(31,679)	$	(92,729)

The fixed income portfolio contained 57 securities in an unrealized loss position as of March 31, 2020. Of these 57 securities, 4 have been in an unrealized loss position for 12 consecutive months or longer and represent $161,473 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.

There were no other-than-temporary impairment losses recognized in net earnings during the first three months ended March 31, 2020. For all fixed income securities at a loss at March 31, 2020, management believes it is probable that 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 for each security, which may be maturity. The fixed income securities in an unrealized loss position were not other-than-temporarily impaired at March 31, 2020 and December 31, 2019.

UNREALIZED GAINS AND LOSSES ON EQUITY SECURITIES

Net unrealized losses for the three months ended March 31, 2020 for equity securities held as of March 31, 2020 was $3,689,347. Net unrealized gains for the three months ended March 31, 2019 for equity securities held as of March 31, 2019 was $1,840,418.

Other Invested Assets

Other invested assets includes membership in the Federal Home Loan Bank of Chicago (FHLBC), which occurred in February 2018. Our investment in FHLBC stock is carried at cost. Due to the nature of our membership in the FHLBC, the carrying amount approximates fair value.

In addition, other invested assets includes privately held investments of $305,000, and notes issued for $625,000 and $650,000 on July 30, 2019 and January 28, 2020, respectively. Both notes bear interest at 6.5%, and are amortized over 20 years with a balloon payment due July 30, 2029.