5. Investments

The amortized cost and estimated fair value of investments in debt and equity securities by category is as follows (in thousands):



			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
As of March 31, 2015	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. Government	$	92,292	$	383	$	-	$	92,675
Corporate bonds		31,093		824		(59)		31,858
Collateralized corporate bank loans		114,385		572		(2,068)		112,889
Municipal bonds		162,088		2,362		(2,239)		162,211
Mortgage-backed		67,118		391		(85)		67,424

Total debt securities		466,976		4,532		(4,451)		467,057

Total equity securities		28,120		37,646		(300)		65,466

Total debt and equity securities	$	495,096	$	42,178	$	(4,751)	$	532,523

As of December 31, 2014
U.S. Treasury securities and obligations of U.S. Government	$	93,280	$	29	$	(4)	$	93,305
Corporate bonds		28,643		884		(85)		29,442
Collateralized corporate bank loans		115,358		206		(1,915)		113,649
Municipal bonds		161,546		2,384		(1,601)		162,329
Mortgage-backed		51,943		487		(370)		52,060

Total debt securities		450,770		3,990		(3,975)		450,785

Total equity securities		25,360		31,086		(2)		56,444

Total debt and equity securities	$	476,130	$	35,076	$	(3,977)	$	507,229

Major categories of net realized gains (losses) on investments are summarized as follows (in thousands):



	Three Months Ended March 31,
	2015		2014

U.S. Treasury securities and obligations of U.S. Government	$	-	$	-
Corporate bonds		-		154
Collateralized corporate bank loans		18		59
Municipal bonds		(26)		(28)
Mortgage-backed		187		-
Equity securities		682		-
Gain on investments		861		185
Other-than-temporary impairments		(277)		-
Net realized gains	$	584	$	185

We realized gross gains on investments of $0.9 million and $0.2 million during the three months ended March 31, 2015 and 2014, respectively. We realized gross losses on investments of $28 thousand for both the three months ended March 31, 2015 and 2014, respectively. We recorded proceeds from the sale of investment securities of $1.6 million and $11.3 million during the three months ended March 31, 2015 and 2014, respectively. Realized investment gains and losses are recognized in operations on the specific identification method.

The following schedules summarize the gross unrealized losses showing the length of time that investments have been continuously in an unrealized loss position as of March 31, 2015 and December 31, 2014 (in thousands):



	As of March 31, 2015
	12 months or less				Longer than 12 months				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses

U.S. Treasury securities and obligations of U.S. Government	$	-	$	-	$	-	$	-	$	-	$	-
Corporate bonds		17,069		(59)		-		-		17,069		(59)
Collateralized corporate bank loans		35,468		(373)		11,074		(1,695)		46,542		(2,068)
Municipal bonds		54,473		(1,957)		4,113		(282)		58,586		(2,239)
Mortgage-backed		17,603		(85)		7		-		17,610		(85)
Total debt securities		124,613		(2,474)		15,194		(1,977)		139,807		(4,451)

Total equity securities		4,030		(300)		-		-		4,030		(300)
Total debt and equity securities	$	128,643	$	(2,774)	$	15,194	$	(1,977)	$	143,837	$	(4,751)

	As of December 31, 2014
	12 months or less				Longer than 12 months				Total
			Unrealized				Unrealized				Unrealized
	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Treasury securities and obligations of U.S. Government	$	15,005	$	(4)	$	-	$	-	$	15,005	$	(4)
Corporate bonds		7,552		(85)		-		-		7,552		(85)
Collateralized corporate bank loans		64,712		(824)		8,898		(1,091)		73,610		(1,915)
Municipal bonds		50,546		(945)		15,684		(656)		66,230		(1,601)
Mortgage-backed		20,469		(365)		2,966		(5)		23,435		(370)
Total debt securities		158,284		(2,223)		27,548		(1,752)		185,832		(3,975)

Total equity securities		129		(2)		-		-		129		(2)
Total debt and equity securities	$	158,413	$	(2,225)	$	27,548	$	(1,752)	$	185,961	$	(3,977)

At March 31, 2015, the gross unrealized losses more than twelve months old were attributable to 18 debt security positions. At December 31, 2014, the gross unrealized losses more than twelve months old were attributable to 24 debt security positions. We consider these losses as a temporary decline in value as they are predominately on bonds that we do not intend to sell and do not believe we will be required to sell prior to recovery of our amortized cost basis. We see no other indications that the decline in values of these securities is other-than-temporary.

We complete a detailed analysis each quarter to assess whether any decline in the fair value of any investment below cost is deemed other-than-temporary. All securities with an unrealized loss are reviewed. We recognize an impairment loss when an investment's value declines below cost, adjusted for accretion, amortization and previous other-than-temporary impairments and it is determined that the decline is other-than-temporary.

Debt Investments: We assess whether we intend to sell, or it is more likely than not that we will be required to sell, a fixed maturity investment before recovery of its amortized cost basis less any current period credit losses. For fixed maturity investments that are considered other-than-temporarily impaired and that we do not intend to sell and will not be required to sell, we separate the amount of the impairment into the amount that is credit related (credit loss component) and the amount due to all other factors. The credit loss component is recognized in earnings and is the difference between the investment’s amortized cost basis and the present value of its expected future cash flows. The remaining difference between the investment’s fair value and the present value of future expected cash flows is recognized in other comprehensive income.

Equity Investments: Some of the factors considered in evaluating whether a decline in fair value for an equity investment is other-than-temporary include: (1) our ability and intent to retain the investment for a period of time sufficient to allow for an anticipated recovery in value; (2) the recoverability of cost; (3) the length of time and extent to which the fair value has been less than cost; and (4) the financial condition and near-term and long-term prospects for the issuer, including the relevant industry conditions and trends, and implications of rating agency actions and offering prices. When it is determined that an equity investment is other-than-temporarily impaired, the security is written down to fair value, and the amount of the impairment is included in earnings as a realized investment loss. The fair value then becomes the new cost basis of the investment, and any subsequent recoveries in fair value are recognized at disposition. We recognize a realized loss when impairment is deemed to be other-than-temporary even if a decision to sell an equity investment has not been made. When we decide to sell a temporarily impaired available-for-sale equity investment and we do not expect the fair value of the equity investment to fully recover prior to the expected time of sale, the investment is deemed to be other-than-temporarily impaired in the period in which the decision to sell is made.

The amortized cost and estimated fair value of debt securities at March 31, 2015 by contractual maturity are as follows. Expected maturities may differ from contractual maturities because certain borrowers may have the right to call or prepay obligations with or without penalties.



	Amortized		Fair
	Cost		Value
	(in thousands)
Due in one year or less	$	51,034	$	51,292
Due after one year through five years		196,816		198,058
Due after five years through ten years		106,014		104,179
Due after ten years		45,994		46,104
Mortgage-backed		67,118		67,424
	$	466,976	$	467,057