Investments (Tables)

6 Months Ended

Jun. 30, 2017

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

The following tables summarize the cost and fair value of our available-for-sale securities:



	At June 30, 2017
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
U.S. treasury	$	5,082	$	0	$	31	$	5,051
States & political subdivisions	255,244		8,211		758		262,697
Corporate debt securities	348,531		2,933		1,284		350,180
Residential mortgage-backed securities	13,641		58		146		13,553
Commercial mortgage-backed securities	35,638		92		753		34,977
Collateralized debt obligations	75,857		405		38		76,224
Other debt securities	2,000		0		0		2,000
Total fixed maturities	735,993		11,699		3,010		744,682
Total available-for-sale securities	$	735,993	$	11,699	$	3,010	$	744,682



	At December 31, 2016
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Available-for-sale securities:
U.S. treasury	$	5,093	$	0	$	62	$	5,031
Government sponsored entities	2,004		22		0		2,026
States & political subdivisions	249,312		6,113		2,293		253,132
Corporate debt securities	321,041		3,293		1,386		322,948
Residential mortgage-backed securities	16,232		61		191		16,102
Commercial mortgage-backed securities	37,723		59		933		36,849
Collateralized debt obligations	68,998		351		96		69,253
Other debt securities	2,000		0		0		2,000
Total fixed maturities	702,403		9,899		4,961		707,341
Common stock	6,152		0		202		5,950
Total available-for-sale securities	$	708,555	$	9,899	$	5,163	$	713,291

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 June 30, 2017 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 June 30, 2017
(in thousands)	Amortized		Estimated
	cost		fair value
Due in one year or less	$	71,180	$	71,283
Due after one year through five years	330,763		334,532
Due after five years through ten years	223,344		227,888
Due after ten years	110,706		110,979
Total fixed maturities	$	735,993	$	744,682

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

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 June 30, 2017
(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:
U.S. treasury	$	5,051	$	31	$	0	$	0	$	5,051	$	31	1
States & political subdivisions	50,085		721		1,123		37		51,208		758		24
Corporate debt securities	143,284		1,059		6,228		225		149,512		1,284		211
Residential mortgage-backed securities	4,489		56		4,097		90		8,586		146		8
Commercial mortgage-backed securities	19,545		292		7,702		461		27,247		753		26
Collateralized debt obligations	28,755		35		1,020		3		29,775		38		16
Total fixed maturities	251,209		2,194		20,170		816		271,379		3,010		286
Total available-for-sale securities	$	251,209	$	2,194	$	20,170	$	816	$	271,379	$	3,010	286
Quality breakdown of fixed maturities:
Investment grade	$	206,737	$	1,487	$	16,636	$	325	$	223,373	$	1,812	124
Non-investment grade	44,472		707		3,534		491		48,006		1,198		162
Total fixed maturities	$	251,209	$	2,194	$	20,170	$	816	$	271,379	$	3,010	286



	At December 31, 2016
(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:
U.S. treasury	$	5,031	$	62	$	0	$	0	$	5,031	$	62	1
States & political subdivisions	84,611		2,293		0		0		84,611		2,293		40
Corporate debt securities	112,453		987		8,692		399		121,145		1,386		155
Residential mortgage-backed securities	7,451		60		4,974		131		12,425		191		13
Commercial mortgage-backed securities	26,509		437		4,319		496		30,828		933		28
Collateralized debt obligations	27,470		75		4,208		21		31,678		96		15
Total fixed maturities	263,525		3,914		22,193		1,047		285,718		4,961		252
Common stock	5,950		202		0		0		5,950		202		1
Total available-for-sale securities	$	269,475	$	4,116	$	22,193	$	1,047	$	291,668	$	5,163	253
Quality breakdown of fixed maturities:
Investment grade	$	239,041	$	3,605	$	16,061	$	399	$	255,102	$	4,004	136
Non-investment grade	24,484		309		6,132		648		30,616		957		116
Total fixed maturities	$	263,525	$	3,914	$	22,193	$	1,047	$	285,718	$	4,961	252

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 June 30,				Six months ended June 30,
	2017		2016		2017		2016
Fixed maturities	$	6,220	$	4,858	$	12,124	$	9,384
Equity securities	17		47		49		82
Cash equivalents and other	395		321		916		645
Total investment income	6,632		5,226		13,089		10,111
Less: investment expenses	396		335		875		558
Net investment income	$	6,236	$	4,891	$	12,214	$	9,553

Schedule of realized gains and losses on sales of securities recognized in income based upon the specific identification method

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 June 30,						Six months ended June 30,
	2017			2016			2017			2016
Available-for-sale securities:
Fixed maturities:
Gross realized gains	$	507		$	438		$	1,087		$	572
Gross realized losses	(236		)	(209		)	(394		)	(1,792		)
Net realized gains (losses)	271			229			693			(1,220		)
Equity securities:
Gross realized losses	(145		)	0			(145		)	(34		)
Net realized losses	(145		)	0			(145		)	(34		)
Trading securities:
Common stock:
Gross realized gains	0			586			0			586
Decreases in fair value⁽¹⁾	0			(416		)	0			(21		)
Net realized gains	0			170			0			565
Miscellaneous:
Gross realized gains	0			0			94			0
Gross realized losses	(2		)	0			(2		)	0
Net realized (losses) gains	(2		)	0			92			0
Net realized investment gains (losses)	$	124		$	399		$	640		$	(689	)


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

Schedule of components of other-than-temporary impairments on investments

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



(in thousands)	Three months ended June 30,					Six months ended June 30,
	2017			2016		2017			2016
Fixed maturities	$	(61	)	$	0	$	(182	)	$	(345	)
Total other-than-temporary impairments	(61		)	0		(182		)	(345		)
Portion recognized in other comprehensive income	0			0		0			0
Net impairment losses recognized in earnings	$	(61	)	$	0	$	(182	)	$	(345	)

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

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



(in thousands)	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017			2016

Equity in earnings of limited partnerships accounted for under the equity method	$	149	$	2,058	$	399		$	1,342
Change in fair value of limited partnerships accounted for under the fair value option	0		56		(37		)	102
Equity in earnings of limited partnerships	$	149	$	2,114	$	362		$	1,444

The following table summarizes limited partnership investments by sector:



(in thousands)	At June 30, 2017		At December 31, 2016
Private equity	$	34,790	$	35,228
Mezzanine debt	4,908		6,010
Real estate	9,156		12,509
Real estate - fair value option	4,376		4,412
Total limited partnership investments	$	53,230	$	58,159