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, 2016	Cost		Gains		Losses		Value
U.S. Treasury securities and obligations of U.S. Government	$	74,338	$	231	$	-	$	74,569
Corporate bonds		161,211		956		(1,472)		160,695
Collateralized corporate bank loans		81,062		116		(787)		80,391
Municipal bonds		196,870		2,194		(6,384)		192,680
Mortgage-backed		56,599		387		(563)		56,423

Total debt securities		570,080		3,884		(9,206)		564,758

Total equity securities		27,460		22,998		(1,130)		49,328

Total debt and equity securities	$	597,540	$	26,882	$	(10,336)	$	614,086

As of December 31, 2015
U.S. Treasury securities and obligations of U.S. Government	$	76,323	$	7	$	(61)	$	76,269
Corporate bonds		122,894		637		(1,822)		121,709
Collateralized corporate bank loans		83,434		44		(1,882)		81,596
Municipal bonds		196,446		1,888		(5,966)		192,368
Mortgage-backed		59,532		155		(304)		59,383

Total debt securities		538,629		2,731		(10,035)		531,325

Total equity securities		24,951		23,391		(838)		47,504

Total debt and equity securities	$	563,580	$	26,122	$	(10,873)	$	578,829

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


	Three Months Ended March 31,
	2016		2015

U.S. Treasury securities and obligations of U.S. Government	$	-	$	-
Corporate bonds		80		-
Collateralized corporate bank loans		18		18
Municipal bonds		(24)		(26)
Mortgage-backed		-		187
Equity securities		-		682
Gain on investments		74		861
Other-than-temporary impairments		(301)		(277)
Net realized (losses) gains	$	(227)	$	584

We realized gross gains on investments of $0.1 million and $0.9 million during the three months ended March 31, 2016 and 2015, respectively. We realized gross losses on investments of $23 thousand and $28 thousand for the three months ended March 31, 2016 and 2015, respectively. We recorded proceeds from the sale of investment securities of $4.8 million and $1.6 million during the three months ended March 31, 2016 and 2015, 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, 2016 and December 31, 2015 (in thousands):



	As of March 31, 2016
	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		72,123		(1,472)		-		-		72,123		(1,472)
Collateralized corporate bank loans		45,414		(691)		5,314		(96)		50,728		(787)
Municipal bonds		16,565		(279)		20,798		(6,105)		37,363		(6,384)
Mortgage-backed		29,780		(561)		44		(2)		29,824		(563)
Total debt securities		163,882		(3,003)		26,156		(6,203)		190,038		(9,206)

Total equity securities		2,796		(474)		1,689		(656)		4,485		(1,130)
Total debt and equity securities	$	166,678	$	(3,477)	$	27,845	$	(6,859)	$	194,523	$	(10,336)

	As of December 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	$	41,428	$	(61)	$	-	$	-	$	41,428	$	(61)
Corporate bonds		96,475		(1,822)		-		-		96,475		(1,822)
Collateralized corporate bank loans		65,868		(1,758)		3,532		(124)		69,400		(1,882)
Municipal bonds		44,525		(488)		25,310		(5,478)		69,835		(5,966)
Mortgage-backed		36,251		(302)		48		(2)		36,299		(304)
Total debt securities		284,547		(4,431)		28,890		(5,604)		313,437		(10,035)

Total equity securities		6,584		(838)		-		-		6,584		(838)
Total debt and equity securities	$	291,131	$	(5,269)	$	28,890	$	(5,604)	$	320,021	$	(10,873)

At March 31, 2016, the gross unrealized losses more than twelve months old were attributable to 33 debt security positions. At December 31, 2015, the gross unrealized losses more than twelve months old were attributable to 39 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, 2016 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	$	76,399	$	76,378
Due after one year through five years		275,361		274,245
Due after five years through ten years		100,146		96,120
Due after ten years		61,575		61,592
Mortgage-backed		56,599		56,423
	$	570,080	$	564,758