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)
2021
Fixed maturity securities	$	3,484,432	$	1,319	$	(29)	$	1,290
Common stocks		687,015		212,361		(32,397)		179,964
Preferred stocks		78,469		5,455		—		5,455
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)

The amortized cost and estimated fair value of fixed income securities at March 31, 2021, by contractual maturity, are shown as follows:



	Amortized Cost		Fair Value
Due in one year or less	$	1,849,923	$	1,888,670
Due after one year through five years		20,417,844		21,645,715
Due after five years through 10 years		15,114,224		16,148,886
Due after 10 years		21,536,839		22,722,744
Asset and mortgage backed securities without a specific due date		38,561,248		39,224,101
Redeemable preferred stocks		215,805		234,923
Total fixed maturity securities	$	97,695,883	$	101,865,040

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, 2021 and December 31, 2020:



					Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2021
Fixed maturity securities:
U.S. Treasury	$	1,352,581	$	1,364,297	$	23,227	$	(11,511)
MBS/ABS/CMBS		38,561,248		39,224,101		977,305		(314,452)
Corporate		40,104,876		42,735,613		2,835,297		(204,560)
Municipal		17,461,373		18,306,106		955,785		(111,052)
Redeemable preferred stock		215,805		234,923		19,118		—
Total fixed maturity securities	$	97,695,883	$	101,865,040	$	4,810,732	$	(641,575)



					Gross Unrealized
	Amortized Cost		Fair Value		Gains		Losses
2020
Fixed maturity securities:
U.S. Treasury	$	1,352,758	$	1,385,406	$	33,336	$	(688)
MBS/ABS/CMBS		40,509,172		41,743,304		1,367,411		(133,279)
Corporate		39,186,671		43,580,743		4,429,000		(34,928)
Municipal		17,488,621		18,788,674		1,316,358		(16,305)
Redeemable preferred stock		215,805		242,439		26,634		—
Total fixed maturity securities	$	98,753,027	$	105,740,566	$	7,172,739	$	(185,200)

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 $14,865,024 and $16,220,343 and commercial mortgage backed securities of $12,452,036 and $12,721,455 at March 31, 2021 and December 31, 2020, 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, 2021 and December 31, 2020. 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, 2021						December 31, 2020
			12 Months						12 Months
	< 12 Months		& Greater		Total		< 12 Months		& Greater		Total
Fixed Maturity Securities:
U.S. Treasury
Fair value	$	689,063	$	—	$	689,063	$	299,391	$	—	$	299,391
Amortized cost		700,574		—		700,574		300,078		—		300,078
Unrealized loss		(11,511)		—		(11,511)		(688)		—		(688)
MBS/ABS/CMBS
Fair value		7,512,704		1,820,824		9,333,528		7,120,339		2,010,434		9,130,773
Amortized cost		7,711,500		1,936,480		9,647,980		7,236,360		2,027,692		9,264,052
Unrealized loss		(198,796)		(115,656)		(314,452)		(116,021)		(17,258)		(133,279)
Corporate
Fair value		6,201,266		233,125		6,434,391		1,739,691		—		1,739,691
Amortized cost		6,390,010		248,941		6,638,951		1,774,619		—		1,774,619
Unrealized loss		(188,744)		(15,816)		(204,560)		(34,928)		—		(34,928)
Municipal
Fair value		3,457,673		245,545		3,703,218		756,678		—		756,678
Amortized cost		3,565,111		249,159		3,814,270		772,984		—		772,984
Unrealized loss		(107,438)		(3,614)		(111,052)		(16,306)		—		(16,306)
Total
Fair value		17,860,706		2,299,494		20,160,200		9,916,099		2,010,434		11,926,533
Amortized cost		18,367,195		2,434,580		20,801,775		10,084,041		2,027,692		12,111,733
Unrealized loss	$	(506,489)	$	(135,086)	$	(641,575)	$	(167,942)	$	(17,258)	$	(185,200)

The fixed income portfolio contained 43 securities in an unrealized loss position as of March 31, 2021. Of these 43 securities, 6 have been in an unrealized loss position for 12 consecutive months or longer and represent $135,086 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, 2021. For all fixed income securities at a loss at March 31, 2021, 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 at maturity. The fixed income securities in an unrealized loss position were not other-than-temporarily impaired at March 31, 2021 and December 31, 2019.

UNREALIZED GAINS AND LOSSES ON EQUITY SECURITIES

Net unrealized gains for the three months ended March 31, 2021 for equity securities held as of March 31, 2021 were $876,316. Net unrealized (losses) for the three months ended March 31, 2020 for equity securities held as of March 31, 2020 were $(3,689,347).

Other Invested Assets

Other invested assets include membership in the Federal Home Loan Bank of Chicago (FHLBC), which occurred in February 2018. Our $200,000 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 include privately held investments of $204,400, and notes issued. Two of the notes, issued for $625,000 and $650,000 on July 30, 2019 and January 28, 2020, respectively, bear interest at 6.5% and are amortized over 20 years with a balloon payment due July 30, 2029. A third note issued for $94,000 on October 30, 2020, bears interest at 6.0% and is amortized over 29 years with monthly payments due beginning July 31, 2021. As of March 31, 2021, this note has $4,000 in accrued escrow and interest receivable. The Company had no allowance recorded related to uncollectible notes receivables at March 31, 2021 and December 31, 2020.