Investments (Tables)

3 Months Ended

Mar. 31, 2016

Schedule of reconciliation of cost to fair value of available-for-sale securities

The following table summarizes the cost and fair value of our available-for-sale securities:



	At March 31, 2016
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
States & political subdivisions	$	230,147	$	12,384	$	7	$	242,524
Corporate debt securities	257,320		1,302		2,124		256,498
Residential mortgage-backed securities	14,974		27		126		14,875
Commercial mortgage-backed securities	36,623		121		1,148		35,596
Collateralized debt obligations	55,123		61		414		54,770
Other debt securities	2,068		0		50		2,018
Total fixed maturities	596,255		13,895		3,869		606,281
Common stock	8,948		0		16		8,932
Total available-for-sale securities	$	605,203	$	13,895	$	3,885	$	615,213



	At December 31, 2015
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
States & political subdivisions	$	221,093	$	10,761	$	7	$	231,847
Corporate debt securities	254,464		281		4,412		250,333
Residential mortgage-backed securities	13,639		4		130		13,513
Commercial mortgage-backed securities	38,630		30		1,089		37,571
Collateralized debt obligations	51,905		61		221		51,745
Other debt securities	2,241		0		41		2,200
Total fixed maturities	581,972		11,137		5,900		587,209
Common stock	12,865		0		133		12,732
Total available-for-sale securities	$	594,837	$	11,137	$	6,033	$	599,941

Schedule of amortized cost and estimated fair value of fixed maturities by remaining contractual term to maturity

The amortized cost and estimated fair value of fixed maturities at March 31, 2016 are shown below by remaining contractual term to maturity. Mortgage-backed securities are allocated based upon their stated maturity dates. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	At March 31, 2016
(in thousands)	Amortized		Estimated
	cost		fair value
Due in one year or less	$	53,995	$	53,962
Due after one year through five years	275,900		277,046
Due after five years through ten years	174,612		181,441
Due after ten years	91,748		93,832
Total fixed maturities	$	596,255	$	606,281

Schedule of available-for-sale securities in a gross unrealized loss position by length of time



	At December 31, 2015
(dollars in thousands)	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings
Available-for-sale securities:
States & political subdivisions	$	5,867	$	7	$	0	$	0	$	5,867	$	7	3
Corporate debt securities	172,831		2,447		19,086		1,965		191,917		4,412		349
Residential mortgage-backed securities	9,827		84		936		46		10,763		130		9
Commercial mortgage-backed securities	13,081		68		19,081		1,021		32,162		1,089		24
Collateralized debt obligations	27,981		103		9,174		118		37,155		221		19
Other debt securities	1,960		40		241		1		2,201		41		2
Total fixed maturities	231,547		2,749		48,518		3,151		280,065		5,900		406
Common stock	12,732		133		0		0		12,732		133		1
Total available-for-sale securities	$	244,279	$	2,882	$	48,518	$	3,151	$	292,797	$	6,033	407
Quality breakdown of fixed maturities:
Investment grade	$	174,723	$	1,296	$	38,369	$	1,256	$	213,092	$	2,552	105
Non-investment grade	56,824		1,453		10,149		1,895		66,973		3,348		301
Total fixed maturities	$	231,547	$	2,749	$	48,518	$	3,151	$	280,065	$	5,900	406

Available-for-sale securities in a gross unrealized loss position are as follows. Data is provided by length of time for securities in a gross unrealized loss position.



	At March 31, 2016
(dollars in thousands)	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses		No. of holdings
Available-for-sale securities:
States & political subdivisions	$	6,938	$	7	$	0	$	0	$	6,938	$	7	3
Corporate debt securities	83,699		1,331		30,239		793		113,938		2,124		251
Residential mortgage-backed securities	5,333		12		2,886		114		8,219		126		7
Commercial mortgage-backed securities	9,321		77		17,371		1,071		26,692		1,148		22
Collateralized debt obligations	27,289		281		8,279		133		35,568		414		19
Other debt securities	1,950		50		68		0		2,018		50		2
Total fixed maturities	134,530		1,758		58,843		2,111		193,373		3,869		304
Common stock	0		0		8,932		16		8,932		16		1
Total available-for-sale securities	$	134,530	$	1,758	$	67,775	$	2,127	$	202,305	$	3,885	305
Quality breakdown of fixed maturities:
Investment grade	$	92,506	$	556	$	46,471	$	1,423	$	138,977	$	1,979	76
Non-investment grade	42,024		1,202		12,372		688		54,396		1,890		228
Total fixed maturities	$	134,530	$	1,758	$	58,843	$	2,111	$	193,373	$	3,869	304

Schedule of investment income, net of expenses, from portfolios

Interest and dividend income are recognized as earned and recorded to net investment income. Investment income, net of expenses, was generated from the following portfolios:



(in thousands)	Three months ended March 31,
	2016		2015
Fixed maturities	$	4,526	$	4,079
Equity securities	35		260
Cash equivalents and other	324		294
Total investment income	4,885		4,633
Less: investment expenses	223		92
Net investment income	$	4,662	$	4,541

Schedule of realized gains (losses) and other-than-temporary impairments on investments recognized in income

Realized gains and losses on sales of securities are recognized in income based upon the specific identification method. Realized gains (losses) on investments were as follows:



(in thousands)	Three months ended March 31,
	2016			2015
Available-for-sale securities:
Fixed maturities:
Gross realized gains	$	134		$	31
Gross realized losses	(1,583		)	(271		)
Net realized losses	(1,449		)	(240		)
Equity securities:
Gross realized gains	0			0
Gross realized losses	(34		)	0
Net realized losses	(34		)	0
Trading securities:
Common stock:
Gross realized gains	0			0
Gross realized losses	0			0
Increases in fair value⁽¹⁾	395			0
Net realized gains	395			0
Net realized investment losses	$	(1,088	)	$	(240	)


(1)	The fair value of our common stocks is determined based upon exchange traded prices provided by a nationally recognized pricing service.

Net impairment losses

The components of other-than-temporary impairments on investments were as follows:



(in thousands)	Three months ended March 31,
	2016			2015
Fixed maturities	$	(345	)	$	(120	)
Total other-than-temporary impairments	(345		)	(120		)
Portion recognized in other comprehensive income	0			0
Net impairment losses recognized in earnings	$	(345	)	$	(120	)

Schedule of limited partnership results, generally reported on a one-quarter lag

Amounts included in equity in (losses) earnings of limited partnerships by method of accounting are included below:



(in thousands)	Three months ended March 31,
	2016			2015

Equity in (losses) earnings of limited partnerships accounted for under the equity method	$	(716	)	$	2,612
Change in fair value of limited partnerships accounted for under the fair value option	46			(254		)
Equity in (losses) earnings of limited partnerships	$	(670	)	$	2,358

The following table summarizes limited partnership investments by sector:



(in thousands)	At March 31, 2016		At December 31, 2015
Private equity	$	43,286	$	48,397
Mezzanine debt	12,611		12,701
Real estate	22,713		22,911
Real estate - fair value option	4,302		4,526
Total limited partnerships	$	82,912	$	88,535