INVESTMENTS

The Company invests primarily in fixed maturity securities, which totaled 90.7% of total cash, cash equivalents and investments at June 30, 2019. The Company's cash, cash equivalents and investments are listed below.



Carrying Value (In thousands, except for %)	June 30, 2019				December 31, 2018
Carrying Value (In thousands, except for %)	Amount		%		Amount		%

Fixed maturity securities	$	1,341,339	90.7	%	$	1,231,039	88.7	%
Equity securities	15,827		1.1	%	15,068		1.1	%
Mortgage loans	182		—	%	186		—	%
Policy loans	81,545		5.5	%	80,825		5.8	%
Real estate and other long-term investments	2,593		0.2	%	7,223		0.5	%
Short-term investments	2,455		0.2	%	7,865		0.6	%
Cash and cash equivalents	34,568		2.3	%	45,492		3.3	%
Total cash, cash equivalents and investments	$	1,478,509	100.0	%	$	1,387,698	100.0	%

The following tables represent the cost or amortized cost, gross unrealized gains and losses and fair value of fixed maturities as of the dates indicated.



	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
June 30, 2019
(In thousands)

Fixed maturities:
Available-for-sale:
U.S. Treasury securities	$	9,749	1,733	—	11,482
U.S. Government-sponsored enterprises	3,528		1,015	—	4,543
States and political subdivisions	651,598		25,193	351	676,440
Corporate	481,406		30,533	2,171	509,768
Commercial mortgage-backed	1,109		2	—	1,111
Residential mortgage-backed	116,364		11,280	2	127,642
Asset-backed	10,229		5	1	10,233
Foreign governments	102		18	—	120
Total fixed maturities	$	1,274,085	69,779	2,525	1,341,339



	Cost or Amortized Cost		Gross Unrealized Gains	Gross Unrealized Losses	Fair Value
December 31, 2018
(In thousands)

Fixed maturities:
Available-for-sale securities:
U.S. Treasury securities	$	9,864	1,410	—	11,274
U.S. Government-sponsored enterprises	3,540		740	—	4,280
States and political subdivisions	713,991		7,614	1,490	720,115
Corporate	384,817		6,725	9,746	381,796
Commercial mortgage-backed	39,694		386	66	40,014
Residential mortgage-backed	66,960		1,726	2	68,684
Asset-backed	4,764		1	8	4,757
Foreign governments	117		2	—	119
Total fixed maturities	$	1,223,747	18,604	11,312	1,231,039

Most of the Company's equity securities are diversified stock and bond mutual funds.



Fair Value (In thousands)	June 30, 2019		December 31, 2018

Equity securities:
Stock mutual funds	$	3,142	2,906
Bond mutual funds	12,255		11,774
Common stock	120		94
Non-redeemable preferred stock	310		294
Total equity securities	$	15,827	15,068

VALUATION OF INVESTMENTS

Available-for-sale securities are reported in the consolidated financial statements at fair value. Equity securities are measured at fair value with the change in fair value recorded through net income. The Company recognized net realized gains of $155,000 and $757,000 on equity securities held for the three and six months ended June 30, 2019 and losses of $86,000 and $388,000 for the same periods ended June 30, 2018, respectively. An impairment loss of $3.1 million was recorded during the second quarter of 2019 related to our Citizens Academy training facility property located near Austin, Texas. It was determined during the quarter that the property met the held-for-sale criteria. As a result, this investment was reclassified from real estate held for investment to real estate held-for-sale. This resulted in an impairment loss of $3.1 million as the carrying amount of the property was written down to the net realizable value. This investment is considered a Level 3 asset in the fair value hierarchy.

The Company monitors all debt 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. The assessment of whether other-than-temporary impairments ("OTTI") have occurred is based on a case-by-case evaluation of underlying reasons for the decline in fair value. The Company determines OTTI by reviewing relevant evidence related to the specific security issuer as well as the Company's intent to sell the security, or if it is more likely than not that the Company would be required to sell a security before recovery of its amortized cost.

When an OTTI has occurred, the amount of the OTTI recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the Company intends to sell the security or it is more likely that the Company will be required to sell the security before recovery of its amortized cost basis, the OTTI is recognized in earnings equal to the entire difference between the investment's amortized cost and its fair value at the balance sheet date. If the Company does not intend to sell the security and it is more likely than not that the Company will not be required to sell the security before recovery of its amortized cost basis, the OTTI is separated into the following: (a) the amount representing the credit loss; and (b) the amount related to all other factors. The amount of the total OTTI related to the credit loss is recognized in earnings. The amount of the total OTTI related to other factors is recognized in other comprehensive income, net of applicable taxes. The previous amortized cost basis less the OTTI recognized in earnings becomes the new amortized cost basis of the investment. The new amortized cost basis is not adjusted for subsequent recoveries in fair value.

The Company evaluates whether a credit impairment exists for fixed maturity securities by considering primarily the following factors: (a) changes in the financial condition of the security's underlying collateral; (b) whether the issuer is current on contractually obligated interest and principal payments; (c) changes in the financial condition, credit rating and near-term prospects of the issuer; (d) the length of time to which the fair value has been less than the amortized cost of the security; and (e) the payment structure of the security. The Company's best estimate of expected future cash flows used to determine the credit loss amount is a quantitative and qualitative process. Quantitative review includes information received from third party sources such as financial statements, pricing and rating changes, liquidity and other statistical information. Qualitative factors include judgments related to business strategies, economic impacts on the issuer and overall judgment related to estimates and industry factors. The Company's best estimate of future cash flows involves assumptions including, but not limited to, various performance indicators, such as historical and projected default and recovery rates, credit ratings, and current delinquency rates. These assumptions require the use of significant management judgment and include the probability of issuer default and estimates regarding timing and amount of expected recoveries, which may include estimating the underlying collateral value. In addition, projections of expected future debt security cash flows may change based upon new information regarding the performance of the issuer.

No fixed maturity investment impairments were recognized for the three and six months ended June 30, 2019 or the three months ended June 30, 2018. OTTI of $225,000 was recognized on one fixed maturity security issuer for the six months ended June 30, 2018.

The following tables present the fair values and gross unrealized losses of fixed maturity securities that have remained in a continuous unrealized loss position for the periods indicated.



June 30, 2019	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities

Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	44,983	198	39	24,021	153	33	69,004	351	72
Corporate	57,128		1,868	39	10,304	303	12	67,432	2,171	51
Residential mortgage-backed	—		—	—	94	2	4	94	2	4
Asset-backed	1,345		1	2	—	—	—	1,345	1	2
Total fixed maturities	$	103,456	2,067	80	34,419	458	49	137,875	2,525	129



December 31, 2018	Less than 12 months				Greater than 12 months			Total
(In thousands, except for # of securities)	Fair Value		Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities	Fair Value	Unrealized Losses	# of Securities

Fixed maturities:
Available-for-sale securities:
States and political subdivisions	$	227,132	883	233	33,891	607	46	261,023	1,490	279
Corporate	230,030		8,770	191	9,936	976	8	239,966	9,746	199
Commercial mortgage-backed	14,992		66	11	—	—	—	14,992	66	11
Residential mortgage-backed	18		—	3	98	2	4	116	2	7
Asset-backed	3,747		8	4	—	—	—	3,747	8	4
Total fixed maturities	$	475,919	9,727	442	43,925	1,585	58	519,844	11,312	500

We have reviewed the securities in an unrealized loss position for the periods ended June 30, 2019 and December 31, 2018 and determined that no OTTI exists that have not been recognized based on our evaluation of the credit worthiness of the issuers and the fact that we do not intend to sell the investments nor is it likely that we will be required to sell the securities before recovery of their amortized cost bases which may be maturity. We continue to monitor all securities on an on-going basis and future information may become available which could result in other-than-temporary impairments being recorded.

The amortized cost and fair value of fixed maturity securities at June 30, 2019 by contractual maturity are shown in the table 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 final stated maturity.



June 30, 2019	Amortized Cost		Fair Value
(In thousands)	Amortized Cost		Fair Value
Fixed maturity securities:
Due in one year or less	$	102,787	103,200
Due after one year through five years	131,248		136,348
Due after five years through ten years	214,674		226,791
Due after ten years	825,376		875,000
Total fixed maturity securities	$	1,274,085	1,341,339

The Company uses the specific identification method of the individual security to determine the cost basis used in the calculation of realized gains and losses related to security sales.



	Fixed Maturities, Available-for-Sale					Equity Securities
	Three Months Ended			Six Months Ended		Three Months Ended		Six Months Ended
	June 30,			June 30,		June 30,		June 30,
(In thousands)	2019		2018	2019	2018	2019	2018	2019	2018


Proceeds	$	2,755	—	10,414	—	—	—	—	—
Gross realized gains	$	107	—	109	—	—	—	—	—
Gross realized losses	$	182	—	365	—	—	—	—	—

There were sales of ten and twenty available-for-sale fixed maturity securities for the three and six months ended June 30, 2019, respectively. No available-for-sale fixed maturity securities were sold during the three and six months ended June 30, 2018. No equity securities were sold during the three and six months ended June 30, 2019 and 2018.