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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________________________________
FORM 10-Q
________________________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
Commission File Number 001-33251
________________________________________________________

uve-20210331_g1.jpg
UNIVERSAL INSURANCE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
________________________________________________________
Delaware65-0231984
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
1110 W. Commercial Blvd., Fort Lauderdale, Florida 33309
(Address of principal executive offices) (Zip Code)
(954) 958-1200
(Registrant’s telephone number, including area code)
________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.01 Par ValueUVENew York Stock Exchange
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No   

    Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes     No   




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    Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer  
Smaller reporting company
Emerging growth company
                
    If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

    Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act)      Yes      No  

    Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 31,215,931 shares of common stock, par value $0.01 per share, outstanding on April 26, 2021.




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UNIVERSAL INSURANCE HOLDINGS, INC.
TABLE OF CONTENTS
Page No.

2


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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



To the Board of Directors and Stockholders of
Universal Insurance Holdings, Inc.
Fort Lauderdale, Florida

RESULTS OF REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


We have reviewed the accompanying condensed consolidated balance sheet of Universal Insurance Holdings, Inc. and its wholly-owned subsidiaries (the “Company”) as of March 31, 2021 and the related condensed consolidated statements of income, comprehensive income, stockholders’ equity, and cash flows for the three-month period ended March 31, 2021 and 2020. Based on our review, we are not aware of any material modifications that should be made to the accompanying interim financial statements for them to be in conformity with accounting principles generally accepted in the United States of America.

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheet of Universal Insurance Holdings, Inc. as of December 31, 2020 and the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for the year then ended (not presented herein) and we expressed an unqualified audit opinion on those consolidated financial statements in our report dated February 26, 2021. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2020, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

BASIS FOR REVIEW RESULTS

These interim financial statements are the responsibility of the Company’s management. We conducted our review in accordance with the standards of the PCAOB. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the PCAOB, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.


We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

/s/ Plante & Moran, PLLC
Chicago, Illinois
April 30, 2021

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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands, except per share data)
 As of
March 31,December 31,
20212020
ASSETS
Available-for-sale debt securities, at fair value, net of allowance for credit loss of $220 and $186 (amortized cost: $931,174 and $815,647)
$913,131 $819,861 
Equity securities, at fair value (cost: $91,571 and $84,667)
91,291 84,887 
Assets held for sale6,855  
Investment real estate, net6,027 15,176 
Total invested assets1,017,304 919,924 
Cash and cash equivalents90,829 167,156 
Restricted cash and cash equivalents12,715 12,715 
Prepaid reinsurance premiums100,221 215,723 
Reinsurance recoverable217,625 160,417 
Premiums receivable, net62,488 66,883 
Property and equipment, net53,178 53,572 
Deferred policy acquisition costs111,193 110,614 
Income taxes recoverable14,741 30,576 
Deferred income tax asset, net17,488 6,284 
Other assets19,671 14,877 
Total assets$1,717,453 $1,758,741 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Unpaid losses and loss adjustment expenses$315,780 $322,465 
Unearned premiums772,843 783,135 
Advance premium73,738 49,562 
Book overdraft 59,399 
Reinsurance payable, net24,527 10,312 
Commission payable26,693 23,809 
Other liabilities and accrued expenses41,119 52,341 
Long-term debt8,088 8,456 
Total liabilities1,262,788 1,309,479 
Commitments and Contingencies (Note 12)
STOCKHOLDERS’ EQUITY:
Cumulative convertible preferred stock, $0.01 par value
  
Authorized shares - 1,000
Issued shares - 10 and 10
Outstanding shares - 10 and 10
Minimum liquidation preference, $9.99 and $9.99 per share
Common stock, $0.01 par value
469 468 
Authorized shares - 55,000
Issued shares - 46,911 and 46,817
Outstanding shares - 31,216 and 31,137
Treasury shares, at cost - 15,695 and 15,680
(225,751)(225,506)
Additional paid-in capital104,624 103,445 
Accumulated other comprehensive income (loss), net of taxes(13,567)3,343 
Retained earnings588,890 567,512 
Total stockholders’ equity454,665 449,262 
Total liabilities and stockholders’ equity$1,717,453 $1,758,741 

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(in thousands, except per share data)

Three Months Ended
March 31,
20212020
PREMIUMS EARNED AND OTHER REVENUES
Direct premiums written$365,314 $334,553 
Change in unearned premium10,292 (8,602)
Direct premium earned375,606 325,951 
Ceded premium earned(132,301)(105,122)
Premiums earned, net243,305 220,829 
Net investment income2,986 6,834 
Net realized gains (losses) on investments542 299 
Net change in unrealized gains (losses) of equity securities(494)(8,024)
Commission revenue9,126 7,015 
Policy fees5,387 5,540 
Other revenue1,905 2,782 
Total premiums earned and other revenues262,757 235,275 
OPERATING COSTS AND EXPENSES
Losses and loss adjustment expenses143,963 135,048 
General and administrative expenses82,443 72,643 
Total operating costs and expenses226,406 207,691 
INCOME BEFORE INCOME TAXES36,351 27,584 
Income tax expense (benefit)9,943 7,517 
NET INCOME $26,408 $20,067 
Basic earnings per common share$0.85 $0.62 
Weighted average common shares outstanding - Basic31,208 32,591 
Diluted earnings per common share$0.84 $0.61 
Weighted average common shares outstanding - Diluted31,277 32,731 
Cash dividend declared per common share$0.16 $0.16 


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

Three Months Ended
March 31,
20212020
Net income (loss)$26,408 $20,067 
Other comprehensive income (loss), net of taxes(16,910)(8,946)
Comprehensive income (loss)$9,498 $11,121 
The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 (unaudited)
(in thousands, except per share data)  


Treasury SharesCommon
Shares
Issued
Preferred
Shares
Issued
Common
Stock
Amount
Preferred
Stock
Amount
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Shares,
at Cost
Total
Stockholders’
Equity
Balance, December 31, 2020(15,680)46,817 10 $468 $— $103,445 $567,512 $3,343 $(225,506)$449,262 
Vesting of performance share units(16)
(1)
62 — — — — — — (241)(241)
Vesting of restricted stock units(17)
(1)
65 — 1 — (1)— — (254)(254)
Retirement of treasury shares33 
(1)
(33)— — — (495)— — 495  
Purchases of treasury stock(15)— — — — — — — (245)(245)
Share-based compensation— — — — — 1,675 — — — 1,675 
Net income— — — — — — 26,408 — — 26,408 
Other comprehensive loss, net of taxes— — — — — — — (16,910)— (16,910)
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (5,030)— — (5,030)
Balance, March 31, 2021(15,695)46,911 10 $469 $— $104,624 $588,890 $(13,567)$(225,751)$454,665 

(1) All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)
(in thousands, except per share data)  


Treasury SharesCommon
Shares
Issued
Preferred
Shares
Issued
Common
Stock
Amount
Preferred
Stock
Amount
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Shares,
 at Cost
Total
Stockholders’
Equity
Balance, December 31, 2019(14,069)46,707 10 $467 $— $96,036 $573,619 $20,364 $(196,585)$493,901 
Cumulative effect of change in accounting principle
 (ASU 2016-13)
— — — — — (597)597 — — 
Balance, January 1, 2020(14,069)46,707 10 $467 $— $96,036 $573,022 $20,961 $(196,585)$493,901 
Vesting of performance share units(25)
(1)
83 — 1 — (1)— — (646)(646)
Grants and issue of stock award— 
(1)
1 — — — 30 — — — 30 
Retirement of treasury shares25 
(1)
(25)— — — (646)— — 646  
Purchases of treasury stock(312)— — — — — — — (6,587)(6,587)
Share-based compensation— — — — — 1,691 — — — 1,691 
Net income— — — — — — 20,067 — — 20,067 
Other comprehensive income, net of taxes— — — — — — — (8,946)— (8,946)
Declaration of dividends
($0.16 per common share and
$0.25 per preferred share)
— — — — — — (5,222)— — (5,222)
Balance, March 31, 2020(14,381)46,766 10 $468 $— $97,110 $587,867 $12,015 $(203,172)$494,288 

(1)
All shares acquired represent shares tendered to cover the strike price for options and tax withholdings on the intrinsic value of options exercised, restricted stock vested, performance share units vested, or restricted stock units vested. These shares have been cancelled by the Company.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)

Three Months Ended
March 31,
20212020
Cash flows from operating activities:
Net cash provided by operating activities$61,265 $45,643 
Cash flows from investing activities:
Proceeds from sale of property and equipment16 11 
Purchases of property and equipment(1,211)(4,705)
Purchases of equity securities(8,175)(10,145)
Purchases of available-for-sale debt securities(178,828)(61,782)
Proceeds from sales of equity securities1,576  
Proceeds from sales of available-for-sale debt securities27,455 9,979 
Proceeds from sales of investment real estate2,591  
Maturities of available-for-sale debt securities25,178 32,534 
Net cash provided by (used in) investing activities(131,398)(34,108)
Cash flows from financing activities:
Preferred stock dividend(3)(3)
Common stock dividend(5,083)(5,261)
Purchase of treasury stock(245)(6,587)
Payments related to tax withholding for share-based compensation(495)(646)
Repayment of debt(368)(367)
Net cash provided by (used in) financing activities(6,194)(12,864)
Cash and cash equivalents, and restricted cash and cash equivalents:
Net increase (decrease) during the period(76,327)(1,329)
Balance, beginning of period179,871 184,744 
Balance, end of period$103,544 $183,415 

The following table summarizes our cash and cash equivalents and restricted cash and cash equivalents within the Condensed Consolidated Balance Sheets (in thousands):
 March 31,December 31,
20212020
Cash and cash equivalents$90,829 $167,156 
Restricted cash and cash equivalents (1)12,715 12,715 
Total cash and cash equivalents and restricted cash and cash equivalents$103,544 $179,871 
(1)See “—Note 5 (Insurance Operations)” for a discussion of the nature of the restrictions for restricted cash and cash equivalents and “—Note 14 (Variable Interest Entities)” for a discussion of restricted cash held in a trust account.




The accompanying notes to condensed consolidated financial statements are an integral part of these statements.
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UNIVERSAL INSURANCE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Nature of Operations and Basis of Presentation
Nature of Operations
Universal Insurance Holdings, Inc. (“UVE”, and together with its wholly-owned subsidiaries, “the Company”) is a Delaware corporation incorporated in 1990. The Company is a vertically integrated insurance holding company performing all aspects of insurance underwriting, distribution and claims. Through its wholly-owned insurance company subsidiaries, Universal Property & Casualty Insurance Company (“UPCIC”) and American Platinum Property and Casualty Insurance Company (“APPCIC”, and together with UPCIC, the “Insurance Entities”), the Company is principally engaged in the property and casualty insurance business offered primarily through its network of independent agents. Risk from catastrophic losses is managed through the use of reinsurance agreements. The Company’s primary product is residential homeowners’ insurance offered in 19 states as of March 31, 2021, including Florida, which comprises the majority of the Company’s policies in force. See “—Note 5 (Insurance Operations)” for more information regarding the Company’s insurance operations.
The Company generates revenues primarily from the collection of premiums and investment returns on funds invested on cash flows in excess of those retained and used for claims-paying obligations and insurance operations. Other significant sources of revenue include brokerage commissions collected from reinsurers on certain reinsurance programs placed on behalf of the Insurance Entities, policy fees collected from policyholders by the Company’s wholly-owned managing general agent subsidiary and payment plan fees charged to policyholders who choose to pay their premiums in installments. The Company’s wholly-owned adjusting company receives claims-handling fees from the Insurance Entities. The Insurance Entities are reimbursed for these fees on claims that are subject to recovery under the Insurance Entities’ respective reinsurance programs. These fees, after expenses, are recorded in the Condensed Consolidated Financial Statements as an adjustment to losses and loss adjustment expense (“LAE”).
Basis of Presentation
The Company has prepared the accompanying unaudited Condensed Consolidated Financial Statements (“Financial Statements”) in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, the Financial Statements do not include all of the information and footnotes required by United States Generally Accepted Accounting Principles (“U.S. GAAP”) for annual financial statements. Therefore, the Financial Statements should be read in conjunction with the audited Consolidated Financial Statements contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on February 26, 2021. The Condensed Consolidated Balance Sheet at December 31, 2020 was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been included in the Financial Statements. The results for interim periods do not necessarily indicate the results that may be expected for any other interim period or for the full year.
To conform to the current period presentation, certain amounts in the prior periods’ condensed consolidated financial statements and notes have been reclassified. Such reclassifications were of an immaterial amount and had no effect on net income or stockholders’ equity.
The Financial Statements include the accounts of the Company and its wholly-owned subsidiaries, as well as variable interest entities (“VIE”) in which the Company is determined to be the primary beneficiary. All material intercompany balances and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s primary use of estimates is in the recognition of liabilities for unpaid losses, loss adjustment expenses, subrogation recoveries and reinsurance recoveries. Actual results could differ from those estimates.

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2. Significant Accounting Policies
The Company reported Significant Accounting Policies in its Annual Report on Form 10-K for the year ended December 31, 2020. The following are new or revised disclosures or disclosures required on a quarterly basis.
Accounting Policies

Assets Held for Sale. The Company considers properties, including land, to be assets held for sale when (1) management commits to a plan to sell the property; (2) it is unlikely that the disposal plan will be significantly modified or discontinued; (3) the property is available for immediate sale in its present condition; (4) actions required to complete the sale of the property have been initiated; (5) sale of the property is probable and the Company expects the completed sale will occur within one year; and (6) the property is actively being marketed for sale at a price that is reasonable given our estimate of current market value. Upon designation of a property as an asset held for sale, we record the property’s value at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and the Company ceases depreciation. Assets held for sale are stated separately in the accompanying Condensed Consolidated Balance Sheets.



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3. Investments
Available-for-Sale Securities
The following table provides the amortized cost and fair value of available-for-sale debt securities as of the dates presented (in thousands):

March 31, 2021
Amortized
Cost
Allowance for Expected Credit LossesGross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Debt Securities:
  U.S. government obligations and agencies$40,284 $ $123 $(340)$40,067 
  Corporate bonds536,479 (175)1,102 (13,077)524,329 
  Mortgage-backed and asset-backed securities330,939 (2)559 (5,799)325,697 
  Municipal bonds16,400 (1) (574)15,825 
  Redeemable preferred stock7,072 (42)250 (67)7,213 
Total$931,174 $(220)$2,034 $(19,857)$913,131 

December 31, 2020
Amortized
Cost
Allowance for Expected Credit LossesGross
Unrealized
Gains
Gross
Unrealized
Losses
Fair Value
Debt Securities:
  U.S. government obligations and agencies$59,529 $ $157 $(55)$59,631 
  Corporate bonds416,758 (148)3,571 (337)419,844 
  Mortgage-backed and asset-backed securities319,377  1,175 (615)319,937 
  Municipal bonds11,990  138  12,128 
  Redeemable preferred stock7,993 (38)424 (58)8,321 
Total$815,647 $(186)$5,465 $(1,065)$819,861 

The following table provides the credit quality of available-for-sale debt securities with contractual maturities as of the dates presented (dollars in thousands):

March 31, 2021December 31, 2020
Equivalent S&P Credit RatingsFair Value% of Total
 Fair Value
Fair Value% of Total
 Fair Value
AAA$326,429 35.7 %$337,462 41.2 %
AA109,334 12.0 %89,681 10.9 %
A287,372 31.5 %230,290 28.1 %
BBB188,371 20.6 %160,662 19.6 %
BB and Below227  %233  %
No Rating Available1,398 0.2 %1,533 0.2 %
   Total$913,131 100.0 %$819,861 100.0 %

The table above includes credit quality ratings by Standard and Poor’s Rating Services, Inc. (“S&P”), Moody’s Investors Service, Inc. and Fitch Ratings, Inc. The Company has presented the highest rating of the three rating agencies for each investment position.
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The following table summarizes the amortized cost and fair value of mortgage-backed and asset-backed securities as of the dates presented (in thousands):

March 31, 2021December 31, 2020
Amortized
Cost
Fair ValueAmortized
Cost
Fair Value
Mortgage-backed Securities:
Agency$159,583 $156,281 $153,937 $153,758 
Non-agency57,231 55,262 54,231 54,666 
Asset-backed Securities:
Auto loan receivables68,860 68,908 68,188 68,440 
Credit card receivables7,850 7,855 7,878 7,891 
Other receivables37,415 37,391 35,143 35,182 
Total$330,939 $325,697 $319,377 $319,937 
The following tables summarize available-for-sale debt securities, aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position, for which no allowance for expected credit losses has been recorded as of the dates presented (in thousands):

March 31, 2021
Less Than 12 Months12 Months or Longer
Number of
Issues
Fair ValueUnrealized
Losses
Number of
Issues
Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies8 $37,127 $(340) $ $ 
Corporate bonds211 311,967 (8,712)1 1,141 (32)
Mortgage-backed and asset-backed securities107 249,319 (5,799)   
Municipal bonds7 13,402 (503)   
Redeemable preferred stock      
Total333 $611,815 $(15,354)1 $1,141 $(32)

December 31, 2020
Less Than 12 Months12 Months or Longer
Number of
Issues
Fair ValueUnrealized
Losses
Number of
Issues
Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies8 $31,729 $(55) $ $ 
Corporate bonds27 28,791 (162)   
Mortgage-backed and asset-backed securities42 112,462 (615)   
Municipal bonds      
Redeemable preferred stock2 688 (12)   
Total79 $173,670 $(844) $ $ 

Unrealized losses on available-for-sale debt securities in the above table as of March 31, 2021 have not been recognized into income as credit losses because the issuers are of high credit quality (investment grade securities), management does not intend to sell and it is likely management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. There were no material factors impacting any one category or specific security requiring an accrual for credit loss. The issuers continue to make principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity.

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The following table presents a reconciliation of the beginning and ending balances for expected credit losses on available-for-sale debt securities (in thousands):
Corporate BondsMortgage-Backed and Asset-Backed SecuritiesMunicipal BondsRedeemable
 Preferred Stock
Total
Balance, December 31, 2019$ $ $ $ $ 
Cumulative effect adjustment as of
 January 1, 2020
665   126 791 
Increase (decrease)(517)  (88)(605)
Balance, December 31, 2020148   38 186 
Increase (decrease)27 2 1 4 34 
Balance, March 31, 2021$175 $2 $1 $42 $220 

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agencies, market sentiment and trends and adverse conditions specifically related to the security, among other quantitative and qualitative factors utilized for establishing an estimate for credit losses. If the assessment indicates that a credit loss exists, the present values of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes an available-for-sale debt security is confirmed as uncollected or when either of the criteria regarding intent or requirement to sell is met.
The following table presents the amortized cost and fair value of investments with maturities as of the date presented (in thousands):
March 31, 2021
Amortized CostFair Value
Due in one year or less$19,275 $19,357 
Due after one year through five years516,595 513,373 
Due after five years through ten years374,044 359,574 
Due after ten years21,095 20,630 
Perpetual maturity securities165 197 
Total$931,174 $913,131 

All securities, except those with perpetual maturities, were categorized in the table above utilizing years to effective maturity. Effective maturity takes into consideration all forms of potential prepayment, such as call features or prepayment schedules, that shorten the lifespan of contractual maturity dates.
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The following table provides certain information related to available-for-sale debt securities, equity securities and investment in real estate during the periods presented (in thousands):
Three Months Ended
March 31,
20212020
Proceeds from sales and maturities (fair value):
  Available-for-sale debt securities$52,633 $42,513 
  Equity securities$1,576 $ 
Gross realized gains on sale of securities:
  Available-for-sale debt securities$122 $346 
  Equity securities$343 $ 
Gross realized losses on sale of securities:
  Available-for-sale debt securities$(324)$(47)
  Equity securities$ $ 
Realized gains on sales of investment real estate$401 $ 

The following table presents the components of net investment income, comprised primarily of interest and dividends, for the periods presented (in thousands):
Three Months Ended
March 31,
20212020
Available-for-sale debt securities$2,829 $6,015 
Equity securities591 545 
Cash and cash equivalents (1)11 791 
Other (2)268 254 
  Total investment income3,699 7,605 
Less: Investment expenses (3)(713)(771)
  Net investment income$2,986 $6,834 

(1)
Includes interest earned on restricted cash and cash equivalents.
(2)
Includes investment income earned on real estate investments.
(3)
Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.

Equity Securities
The following table provides the unrealized gains and losses recognized for the periods presented on equity securities still held at the end of the reported period (in thousands):
Three Months Ended
March 31,
20212020
Unrealized gains (losses) recognized during the reported period on equity securities still held at the end of the reported period$(519)$(8,024)

Assets Held for Sale
The Company has committed to a plan of sale for a real estate property previously included in Investment Real Estate. The real estate property is located in Tequesta, Florida. Proceeds from the sale are expected to exceed the property’s carrying value of $6.9 million and, accordingly, no impairment loss was recognized on the classification of this real estate property as held for sale.

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Investment Real Estate
Investment real estate consisted of the following as of the dates presented (in thousands):
March 31,December 31,
2021