Investments

The Company invests primarily in fixed maturity securities, which totaled 85.0% of total investments and cash and cash equivalents at December 31, 2015. Holdings in high quality fixed maturity securities rated A or higher by Standard & Poor's, Inc. totaled 82.5% of investment holdings in this category, reflecting the conservative investment philosophy of the Company.



	December 31, 2015			December 31, 2014
	Carrying Value		% of Total Carrying Value	Carrying Value		% of Total Carrying Value
	(In thousands)			(In thousands)
Fixed maturity securities	$	995,601	85.0	$	932,159	83.6
Equity securities	23,438		2.0	69,879		6.3
Mortgage loans	594		0.1	628		0.1
Policy loans	60,166		5.1	54,032		4.8
Real estate and other long-term investments	8,031		0.7	8,266		0.7
Short-term investments	251		—	—		—
Cash and cash equivalents	82,827		7.1	50,708		4.5
Total cash, cash equivalents and investments	$	1,170,908	100.0	$	1,115,672	100.0

The cost, gross unrealized gains and losses and fair value of investments in fixed maturities and equity securities, as of December 31, 2015 and 2014, are as follows.



	December 31, 2015
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,995	2,597	—	12,592
U.S. Government-sponsored enterprises	19,676		1,104	—	20,780
States and political subdivisions	470,319		15,815	3,085	483,049
Foreign governments	104		27	—	131
Corporate	211,245		9,683	4,847	216,081
Commercial mortgage-backed	140		5	—	145
Residential mortgage-backed	2,658		214	2	2,870
Total available-for-sale securities	714,137		29,445	7,934	735,648
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,010		110	—	2,120
States and political subdivisions	236,776		6,756	883	242,649
Corporate	21,167		530	1,500	20,197
Total held-to-maturity securities	259,953		7,396	2,383	264,966
Total fixed maturity securities	$	974,090	36,841	10,317	1,000,614
Equity securities:
Stock mutual funds	$	3,270	—	237	3,033
Bond mutual funds	18,798		55	349	18,504
Common stock	65		—	22	43
Preferred stock	1,594		266	2	1,858
Total equity securities	$	23,727	321	610	23,438



	December 31, 2014
	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
	(In thousands)
Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	10,056	2,924	—	12,980
U.S. Government-sponsored enterprises	38,312		1,937	—	40,249
States and political subdivisions	404,657		19,146	1,448	422,355
Foreign governments	104		31	—	135
Corporate	211,410		17,441	1,024	227,827
Commercial mortgage-backed	223		8	—	231
Residential mortgage-backed	3,204		249	3	3,450
Total available-for-sale securities	667,966		41,736	2,475	707,227
Held-to-maturity securities:
U.S. Government-sponsored enterprises	2,017		178	—	2,195
States and political subdivisions	192,875		7,782	388	200,269
Corporate	30,040		947	560	30,427
Total held-to-maturity securities	224,932		8,907	948	232,891
Total fixed maturity securities	$	892,898	50,643	3,423	940,118
Equity securities:
Stock mutual funds	$	16,005	1,657	66	17,596
Bond mutual funds	50,976		60	796	50,240
Common stock	65		—	14	51
Preferred stock	1,741		253	2	1,992
Total equity securities	$	68,787	1,970	878	69,879

For investments of available-for-sale fixed maturities that have unrealized losses as of December 31, 2015, the cost, gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months, gross unrealized losses that have been in a continuous unrealized loss position for 12 months or longer and fair value are as follows.



	December 31, 2015
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	136,862	1,474	129	12,633	1,611	12	149,495	3,085	141
Corporate	70,081		4,330	69	3,308	516	3	73,389	4,846	72
Residential mortgage-backed	57		1	2	133	2	3	190	3	5
Total available-for-sale securities	207,000		5,805	200	16,074	2,129	18	223,074	7,934	218
Held-to-maturity securities:
States and political subdivisions	$	74,628	774	59	2,404	110	5	77,032	884	64
Corporate	4,585		641	4	2,160	858	2	6,745	1,499	6
Total held-to-maturity securities	79,213		1,415	63	4,564	968	7	83,777	2,383	70
Total fixed maturities	$	286,213	7,220	263	20,638	3,097	25	306,851	10,317	288
Equity securities:
Stock mutual funds	$	3,030	237	4	2	—	1	3,032	237	5
Bond mutual funds	10,158		318	2	108	31	1	10,266	349	3
Preferred stocks	101		1	1	1	1	1	102	2	2
Common stocks	22		1	2	21	21	2	43	22	4
Total equities	$	13,311	557	9	132	53	5	13,443	610	14

The available-for-sale fixed maturities in a gross unrealized loss position for more than 12 months is primarily related to rises in interest rates which results in lower market prices on fixed maturity securities that have lower coupons than the current market rate. This is interest rate risk and is not a signal of impairment. Management has completed its assessment of other-than-temporary impairment of these securities. Based on our evaluation of the credit worthiness of the issuers and because we do not intend to sell the investments, nor is it likely that we would be required to sell these investments, before recovery of their amortized cost bases, which may be maturity, none of the unrealized losses are considered to be other-than-temporary.

We monitor all debt and equity securities on an on-going basis relative to changes in credit ratings, market prices, earnings trends and financial performance, in addition to specific region or industry reviews. Our impairment review, in accordance with current guidance, is performed by the Company at each reporting date and management uses its best judgment to decide if impairment is other-than-temporary. We determine other-than-temporary impairment by reviewing relevant evidence related to the specific security issuer, as well as our intent to sell the security or whether we more likely than not will be required to sell the security before its anticipated recovery. All securities with a market price below par were segregated and reviewed as of December 31, 2015 based upon the items above for impairment.

For investments of available-for-sale fixed maturities and equity securities that have unrealized losses as of December 31, 2014, the cost, gross unrealized losses that have been in a continuous unrealized loss position for less than 12 months, gross unrealized losses that have been in a continuous unrealized loss position for 12 months or longer and fair value are as follows.



	December 31, 2014
	Less than 12 months				Greater than 12 months			Total
	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities
	(In thousands, except for # of securities)
Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	43,776	318	47	33,716	1,130	24	77,492	1,448	71
Corporate	26,671		780	24	2,530	244	2	29,201	1,024	26
Residential mortgage-backed	159		2	5	33	1	1	192	3	6
Total available-for-sale securities	70,606		1,100	76	36,279	1,375	27	106,885	2,475	103
Held-to-maturity securities:
States and political subdivisions	$	21,233	74	16	15,429	314	21	36,662	388	37
Corporate	3,866		285	4	2,746	275	2	6,612	560	6
Total held-to-maturity securities	25,099		359	20	18,175	589	23	43,274	948	43
Total fixed maturities	$	95,705	1,459	96	54,454	1,964	50	150,159	3,423	146
Equity securities:
Stock mutual funds	$	5,224	66	4	—	—	—	5,224	66	4
Bond mutual funds	26,228		796	4	—	—	—	26,228	796	4
Preferred stocks	234		2	4	—	—	—	234	2	4
Common stocks	46		1	2	4	13	9	50	14	11
Total equities	$	31,732	865	14	4	13	9	31,736	878	23

The amortized cost and fair value of fixed maturities at December 31, 2015 by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date have been reflected based upon the final stated maturity.



	Cost or Amortized Cost		Fair Value
	(In thousands)
Available-for-sale securities:
Due in one year or less	$	29,996	30,382
Due after one year through five years	126,518		129,004
Due after five years through ten years	99,265		103,056
Due after ten years	458,358		473,206
Total available-for-sale securities	714,137		735,648
Held-to-maturity securities:
Due in one year or less	10,373		10,443
Due after one year through five years	35,781		37,446
Due after five years through ten years	48,051		49,087
Due after ten years	165,748		167,990
Total held-to-maturity securities	259,953		264,966
Total fixed maturities	$	974,090	1,000,614

The Company had no investments in any one entity which exceeded 10% of stockholders' equity at December 31, 2015. In addition, there were no investments that were non-income producing for the year ended December 31, 2015.

Major categories of net investment income are summarized as follows:



	For the Years Ended December 31,
	2015			2014		2013
	(In thousands)
Investment income on:
Fixed maturities	$	39,570		36,670		32,604
Equity securities	2,909			1,986		1,839
Mortgage loans on real estate	36			42		68
Policy loans	4,614			4,172		3,637
Long-term investments	247			287		229
Other	53			45		64
Total investment income	47,429			43,202		38,441
Investment expenses	(1,647		)	(2,140	)	(1,844	)
Net investment income	$	45,782		41,062		36,597

Proceeds and gross realized gains and losses from sales of fixed maturities available-for-sale for 2015, 2014 and 2013 are summarized as follows:



	For the Years Ended December 31,
	2015		2014	2013
	(In thousands)
Proceeds	$	—	3,074	316
Gross realized gains	$	—	235	7
Gross realized losses	$	—	—	1

In 2015, there were no sales of fixed maturities available-for-sale. In 2014, two bonds were sold for a gain related to the non-insurance subsidiaries holdings. There were no securities sold from the held-to-maturity portfolio in 2015, 2014 or 2013.

Proceeds and gross realized gains and losses from sales of equity securities for 2015, 2014 and 2013 are summarized as follows:



	For the Years Ended December 31,
	2015		2014	2013
	(In thousands)
Proceeds	$	43,163	15,029	5,996
Gross realized gains	$	634	118	—
Gross realized losses	$	599	169	428

In 2015, the Company sold six equity and bond mutual funds, some of which had been previously impaired, that resulted in a net gain of $35,000 due to regulatory accounting considerations. All mutual funds are considered common stocks for regulatory accounting purposes and the RBC charge for stocks is extremely high. In 2014 three equity and bond mutual funds were sold that resulted in a net loss of $51,000 due to circumstances that arose based upon the current environment and due to the fact that they were shorter duration funds. During 2013 two equity mutual funds were sold resulting in a net loss of $0.4 million, for tax planning purposes.

Realized investment gains (losses) are as follows:



	For the Years Ended December 31,
	2015			2014		2013
	(In thousands)
Realized investment gains (losses):
Sales, calls and maturities:
Fixed maturities	$	(111	)	359		199
Equity securities	37			49		(436	)
Other long-term investments	—			—		(10	)
Net realized gains (losses)	(74		)	408		(247	)
Other-than-temporary impairments ("OTTI")
Fixed maturities	(2,998		)	—		—
Equity securities	(2,387		)	(427	)	—
Realized loss on OTTI	(5,385		)	(427	)	—
Net realized investment gains (losses)	$	(5,459	)	(19	)	(247	)

We recorded OTTI write-downs in 2015 of $5.4 million related to two equity bond mutual funds and two bond issuers due to credit quality issues that arose in the current year.

The Company had realized losses of $111,000 from calls of fixed maturities in 2015.