Investments (Tables)

9 Months Ended

Sep. 30, 2018

Investments in available for sale securities are summarized as follows:

September 30, 2018		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	12,657,069	$	5,984	$	(271,045)	$	12,392,008
U.S. special revenue and assessments		16,354,783		307,439		(149,904)		16,512,318
All other corporate bonds		130,575,574		5,566,740		(3,004,117)		133,138,197
	$	159,587,426	$	5,880,163	$	(3,425,066)	$	162,042,523

December 31, 2017		Original or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Investments available for sale:
Fixed maturities
U.S. Government and govt. agencies and authorities	$	2,679,325	$	33,802	$	(73,530)	$	2,639,597
U.S. special revenue and assessments		9,012,232		620,789		0		9,633,021
All other corporate bonds		148,220,954		18,359,816		(298,163)		166,282,607
		159,912,511		19,014,407		(371,693)		178,555,225
Equity securities (1)		35,712,633		23,648,201		(512,343)		58,848,491
Total	$	195,625,144	$	42,662,608	$	(884,036)	$	237,403,716

Debt Securities by Contractual Maturity

The amortized cost and estimated market value of debt securities at September 30, 2018, 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 September 30, 2018		Amortized Cost		Estimated Fair Value
Due in one year or less	$	4,996,905	$	5,084,620
Due after one year through five years		30,412,755		34,408,309
Due after five years through ten years		60,548,458		60,929,783
Due after ten years		63,629,308		61,619,811
Total	$	159,587,426	$	162,042,523

Fair Value of Investments with Sustained Gross Unrealized Losses

The fair value of investments with sustained gross unrealized losses at September 30, 2018 and December 31, 2017 are as follows:

September 30, 2018		Less than 12 months			12 months or longer				Total
		Fair value	Unrealized losses			Fair value	Unrealized losses			Fair value		Unrealized losses
U.S. Government and govt. agencies and authorities	$	9,842,145	$	(133,915)	$	1,543,243	$	(137,130)	$	11,385,388	$	(271,045)
U.S. Special Revenue and Assessments		7,408,605		(149,904)		0		0		7,408,605		(149,904)
All other corporate bonds		82,216,653		(2,386,342)		7,618,210		(617,775)		89,834,863		(3,004,117)
Total fixed maturities	$	99,467,403	$	(2,670,161)	$	9,161,453	$	(754,905)	$	108,628,856	$	(3,425,066)

December 31, 2017		Less than 12 months			12 months or longer					Total
		Fair value	Unrealized losses			Fair value	Unrealized losses			Fair value	Unrealized losses
U.S. Government and govt. agencies and authorities	$	0	$	0	$	1,604,987	$	(73,530)	$	1,604,987	$	(73,530)
All other corporate bonds		9,732,635		(91,757)		11,164,317		(206,406)		20,896,952		(298,163)
Total fixed maturities	$	9,732,635	$	(91,757)	$	12,769,304	$	(279,936)	$	22,501,939	$	(371,693)

Equity securities (1)	$	4,130,260	$	(270,774)	$	1,526,868	$	(241,569)	$	5,657,128	$	(512,343)

Securities in Continuous Unrealized Loss Position

Additional information regarding investments in an unrealized loss position is as follows:

	Less than 12 months	12 months or longer	Total
As of September 30, 2018
Fixed maturities	47	6	53
As of December 31, 2017
Fixed maturities	6	6	12
Equity securities (1)	2	2	4

(1)	Effective January 1, 2018, the Company adopted ASU No. 2016-01 and equity securities are no longer classified as available-for-sale. Prior periods have not been restated to conform to the current presentation. See Note 2 to the Condensed Consolidated Financial Statements for additional information.

Substantially all of the unrealized losses on fixed maturities available-for-sale and equity securities at September 30, 2018 and December 31, 2017 are attributable to changes in market interest rates and general disruptions in the credit market subsequent to purchase. The Company does not currently intend to sell nor does it expect to be required to sell any of the securities in an unrealized loss position. Based upon the Company's expected continuation of receipt of contractually required principal and interest payments and its intent and ability to retain the securities until price recovery, as well as the Company's evaluation of other relevant factors, the Company deems these securities to be temporarily impaired as of September 30, 2018 and December 31, 2017.

Net Investment Gains (Losses) and Change in Net Unrealized Gains on AFS Investments

The following table presents net investment gains (losses) and the change in net unrealized gains on available-for-sale investments.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2018		2017		2018		2017
Realized gains on available-for-sale investments:
Sales of fixed maturities	$	11,018,711	$	799,615	$	11,392,373	$	1,044,254
Sales of equity securities (1)		0		159,910		0		1,012,936
Sales of real estate		1,055,409		168,177		1,589,651		168,177
Other		0		0		0		0
Total realized gains		12,074,120		1,127,702		12,982,024		2,225,367
Realized losses on available-for-sale investments:
Sales of fixed maturities		0		(2,450)		(258,458)		(36,482)
Sales of equity securities (1)		0		0		0		0
Sales of real estate		0		(3,392)		0		(522,965)
Other-than-temporary impairments		(300,000)		0		(300,000)		0
Other		0		0		0		0
Total realized losses		(300,000)		(5,842)		(558,458)		(559,447)
Net realized investment gains (losses)		11,774,120		1,121,860		12,423,566		1,665,920
Change in fair value of equity securities: (1)
Realized gains (losses) on equity securities sold during the period (1)		0		0		0		0
Change in fair value of equity securities held at the end of the period		6,689,533		0		22,050,489		0
Change in fair value of equity securities (1)		6,689,533		0		22,050,489		0
Net investment gains (losses)	$	18,463,653	$	1,121,860	$	34,474,055	$	1,665,920
Change in net unrealized gains (losses) on available-for-sale investments included in other comprehensive income:
Fixed maturities	$	1,244,302	$	4,444,400	$	(4,982,237)	$	9,630,582
Equity securities		0		3,089,712		0		2,759,425
Net increase (decrease)	$	1,244,302	$	7,534,112	$	(4,982,237)	$	12,390,007

(1)

Effective January 1, 2018, the Company adopted ASU No. 2016-01. As a result, equity securities are no longer classified as available-for-sale with unrealized gains and losses recognized in other comprehensive income; rather, all changes in the fair value of equity securities are now recognized in net income. Prior periods have not been restated to conform to the current presentation. See note 2.

Maximum and Minimum Lending Rates for Mortgage Loans

During 2018 and 2017, the maximum and minimum lending rates for mortgage loans were:

	2018		2017
	Maximum rate	Minimum rate	Maximum rate	Minimum rate
Farm Loans	5.00%	5.00%	5.00%	5.00%
Commercial Loans	7.50%	4.00%	7.50%	4.00%
Residential Loans	8.00%	8.00%	8.00%	4.00%

Mortgage Loans

The following table summarizes the mortgage loan holdings of the Company for the periods ended:

		September 30, 2018		December 31, 2017
In good standing	$	8,164,844	$	15,310,941
Overdue interest over 90 days		4,773,322		0
Restructured		0		0
In process of foreclosure		0		2,003,536
Total mortgage loans	$	12,938,166	$	17,314,477
Total foreclosed loans during the year	$	0	$	0