INVESTMENTS

3 Months Ended

Mar. 31, 2012

INVESTMENTS [Abstract]

INVESTMENTS

A. Available for Sale Securities - Fixed Maturity and Equity Securities

As of March 31, 2012 and December 31, 2011, fixed maturities available for sale represented 53% and 47% of total invested assets. The Company's insurance subsidiaries are regulated by insurance statutes and regulations as to the type of investments they are permitted to make, and the amount of funds that may be used for any one type of investment.

The Company has identified securities it may sell and classified them as "investments available for sale".  Investments available for sale are carried at market, with changes in market value directly recorded to shareholders' equity.

The amortized cost and estimated market values of investments in securities including investments held for sale are as follows:

March 31, 2012		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	37,626,131	$	6,046,073	$	0	$	43,672,204
States, municipalities and political subdivisions		205,000		5,799		0		210,799
Collateralized mortgage obligations		550,014		6,638		(2,754)		553,898
Public utilities		399,890		51,432		0		451,322
All other corporate bonds		109,529,698		4,209,527		(2,213,579)		111,525,646
		148,310,733		10,319,469		(2,216,333)		156,413,869
Equity securities		16,070,051		1,011,389		(141,569)		16,939,871
Total	$	164,380,784	$	11,330,858	$	(2,357,902)	$	173,353,740

December 31, 2011		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Market Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	56,794,363	$	13,805,565	$	0	$	70,599,928
States, municipalities and political subdivisions		235,000		6,317		0		241,317
Collateralized mortgage obligations		750,944		11,756		(2,973)		759,727
Public utilities		399,887		62,188		0		462,075
All other corporate bonds		49,334,206		4,901,684		(1,715,760)		52,520,130
		107,514,400		18,787,510		(1,718,733)		124,583,177
Equity securities		16,200,043		1,216,286		(116,701)		17,299,628
Total	$	123,714,443	$	20,003,796	$	(1,835,434)	$	141,882,805

The fair value of investments with sustained gross unrealized losses at March 31, 2012 and December 31, 2011 are as follows:

March 31, 2012		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	0	0	$	97,562	(2,754)	$	97,562	(2,754)
All other corporate bonds		35,974,609	(488,819)		1,237,642	(1,724,760)		37,212,251	(2,213,579)
Total fixed maturity	$	32,974,609	(488,819)	$	1,335,204	(1,727,514)	$	37,309,813	(2,216,333)
Equity securities	$	864,033	(70,641)	$	283,072	(70,928)	$	1,147,105	(141,569)

December 31, 2011		Less than 12 months			12 months or longer			Total
		Fair value	Unrealized losses		Fair value	Unrealized losses		Fair value	Unrealized losses
Collateralized mortgage obligations	$	7,008	(36)	$	97,868	(2,937)	$	104,876	(2,973)
All other corporate bonds		3,915,393	(17,574)		1,268,583	(1,698,186)		5,183,976	(1,715,760)
Total fixed maturity	$	3,922,401	(17,610)	$	1,366,451	(1,701,123)	$	5,288,852	(1,718,733)
Equity securities	$	848,032	(55,141)	$	292,441	(61,560)	$	1,140,473	(116,701)

The unrealized losses of fixed maturity investments were primarily due to financial market participants' perception of increased risks associated with the current market environment.  The unrealized losses of equity investments were primarily caused by normal market fluctuations in publicly traded securities.

The Company regularly reviews its investment portfolio for factors that may indicate that a decline in fair value of an investment is other than temporary.  Based on an evaluation of the issues, including, but not limited to:  intentions to sell or ability to hold the fixed maturity and equity securities with unrealized losses for a period of time sufficient for them to recover; the length of time and amount of the unrealized loss; and the credit ratings of the issuers of the investments, the Company held ten and eighteen investments as other-than-temporarily impaired at March 31, 2012 and December 31, 2011. Other-than-temporary impairments of $0 and $4,342,784 were taken in the first three months of 2012 and during the twelve months ended December 31, 2011, respectively.  The other-than-temporary impairments during 2011 were due to appraisal valuations and Management's analysis of discounted mortgage loans and real estate. There were no impairments recorded during the first quarter of 2012.

The amortized cost and estimated market value of debt securities at March 31, 2012, by contractual maturity, is shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Fixed Maturities Available for Sale March 31, 2012		Amortized Cost		Estimated Market Value
Due in one year or less	$	0	$	0
Due after one year through five years		20,378,312		21,769,041
Due after five years through ten years		85,030,415		88,940,161
Due after ten years		42,351,992		45,150,769
Collateralized mortgage obligations		550,014		553,898
Total	$	148,310,733	$	156,413,869

B. Trading Securities

Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the consolidated statements of operations.  Trading securities include exchange-traded equities, exchange-traded options, and exchange-traded futures.  The fair value of trading securities included in assets was $14,073,619 and $8,519,064 as of March 31, 2012 and December 31, 2011, respectively.  The fair value of trading securities included in liabilities was $(9,183,408) and $(5,471,475) as of March 31, 2012 and December 31, 2011, respectively.  Trading securities' net unrealized gains were $845,370 and $188,915 as of March 31, 2012 and December 31, 2011, respectively.  Trading securities carried as liabilities are securities sold short.  A gain, limited to the price at which the security was sold short, or a loss, potentially unlimited in size, will be recognized upon the termination of the short sale.  Realized gains (losses) from trading securities were $1,993,835 and $(3,464,352) for the three and twelve months ended March 31, 2012 and December 31, 2011, respectively. Earnings from trading securities are classified in cash flows from operating activities. Trading revenue charged to net investment income from trading securities was:

	Three Months March 31, 2012		Twelve Months December 31, 2011
	Net Realized and Unrealized Gains (Losses)		Net Realized and Unrealized Gains (Losses)
$	2,839,205	$	(3,275,437)

C. Derivatives

As of March 31, 2012, the Company held derivative instruments in the form of exchange-traded options.  The Company currently does not designate derivatives as hedging instruments.  Exchange-traded options and futures are combined with exchange-traded equity securities in the Company's trading portfolio, with the primary objective of generating a fair return while reducing risk.  These derivatives are carried at fair value, with unrealized gains and losses recognized in net investment income.  The fair value of derivatives included in trading security assets and trading security liabilities as of March 31, 2012 was $7,882,121 and $(7,485,738), respectively. The fair value of derivatives included in trading security assets and trading security liabilities as of December 31, 2011 was $3,217,420 and $(4,187,885), respectively.  Realized gains (losses) due to derivatives were $1,938,037 and $(1,343,588) for the three and twelve months ended March 31, 2012 and December 31, 2011, respectively. Unrealized gains included in income and trading security assets due to derivatives were $1,539,983 and $536,761 as of March 31, 2012 and December 31, 2011, respectively. Unrealized gains (losses) included in income and trading security liabilities due to derivatives were $(358,644) and $(2,476,008) as of March 31, 2012 and December 31, 2011, respectively.

D. Mortgages

The Company held mortgage loans on real estate in the amount of $37,990,530 and $36,740,839 at March 31, 2012 and December 31, 2011, respectively.  Included in the amounts are discounted commercial mortgage loans with a carrying value of $31,147,466 and $27,467,920 at March 31, 2012 and December 31, 2011, respectively.

During the first three months of 2012, the Company acquired $14,025,155 of new discounted mortgage loans at a total cost of $5,500,000, representing an average purchase price to outstanding loan of 39.22%.  Additionally, during the first three months of 2012, the Company settled, sold, or had paid off mortgage loans totaling $3,257,451.  The Company also recorded approximately $1,550,000 in income from the discounted mortgage loan activity, including approximately $1,062,000 in discount accruals during the first three months of 2012.  During 2011, the Company acquired $17,930,217 of discounted mortgage loans at a total cost of $6,673,601, representing an average purchase price to outstanding loan of 37.2%.  Additionally, during 2011, the Company settled, sold or had paid off discounted mortgage loans totaling $29,916,298.  During 2011, the Company recorded approximately $8,232,000 in income from the discounted mortgage loan activity, including approximately $3,940,000 in discount accruals.  The Company is currently projecting a very positive return from on-going mortgage loan payments from the discounted commercial mortgage loan portfolio.

While management believes the discounted loans will continue to have favorable earnings and outcomes as they are worked through, there can be no assurance this will remain true in future periods.  Changes in the current economy such as an even greater downturn than recently experienced could have a negative impact on the loans, including the financial stability of the borrowers, the borrowers' ability to pay or to refinance, the value of the property held as collateral and the ability to find purchasers at favorable prices.  As such, management has taken a conservative approach with these investments and has classified all discounted mortgage loans held as non-accrual.  In such status, the Company is not recording any accrued interest income nor is it recording any accrual of discount on the loans held.  Discount accruals reported during 2011 and 2012 were the result of the loan basis already being fully paid.

On the remainder of the mortgage loan portfolio, interest accruals are analyzed based on the likelihood of repayment.  In no event will interest continue to accrue when accrued interest along with the outstanding principal exceeds the net realizable value of the property.  The Company does not utilize a specified number of days delinquent to cause an automatic non-accrual status.

A mortgage loan reserve is established and adjusted based on management's quarterly analysis of the portfolio and any deterioration in value of the underlying property which would reduce the net realizable value of the property below its current carrying value.  The Company acquired the discounted mortgage loans at below fair value, therefore no reserve for delinquent loans is deemed necessary.  The loan portfolio since purchase is performing well.  Those loans not currently paying are being vigorously worked by management.  The current discounted commercial mortgage loan portfolio has an average price of 34.1% of face value and management has determined that this deep discount provides a financial cushion or built in allowance for any of the loans that are not currently performing within the portfolio of loans purchased.  The mortgage loan reserve was $0 at March 31, 2012 and December 31, 2011.

As of March 31, 2012, the Company's discounted mortgage loan portfolio contained 78 loans with a carrying value of $31,147,466.  The loans' payment performance since inception is shown as follows:

Payment Frequency	Number of Discounted Loans		Carrying Value
No payments	22	$	6,490,730
One-time payment received	5		603,203
Irregular payments received	22		10,766,053
Periodic payments received	29		13,287,480
Total	78	$	31,147,466

The following table summarizes discounted mortgage loan holdings of the Company:

Category		March 31, 2012		December 31, 2011
In good standing	$	4,498,420	$	6,657,971
Overdue interest over 90 days		5,502,046		5,907,192
Restructured		7,720,641		7,726,156
In process of foreclosure		13,426,359		7,176,601
Total discounted mortgage loans	$	31,147,466	$	27,467,920
Total foreclosed discounted mortgage loans during the period	$	17,857,217	$	21,059,386

During the first three months of 2012, the Company foreclosed on five discounted mortgage loans with a total carrying value of $1,137,134.  The foreclosed loans were transferred to real estate.  None of the loans transferred to real estate during 2012 were sold.  Two of the discounted loans that were transferred to real estate during 2011 were sold during 2011 and during the first three months of 2012 resulting in a net gain of $496,908 and $1,748,780, respectively.

During the first three months of 2012, the Company did not recognize any other-than-temporary impairments.