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Investments (Tables)

12 Months Ended

Dec. 31, 2019

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 as of:



	December 31, 2019
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Corporate debt securities ⁽¹⁾	$	450,295	$	6,289	$	1,704	$	454,880
Residential mortgage-backed securities ⁽¹⁾	124,337		1,056		50		125,343
Commercial mortgage-backed securities ⁽¹⁾	67,210		479		148		67,541
Collateralized debt obligations ⁽¹⁾	78,059		44		247		77,856
Other debt securities	5,049		71		39		5,081
Total available-for-sale securities	$	724,950	$	7,939	$	2,188	$	730,701



	December 31, 2018
(in thousands)	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
U.S. Treasury ⁽¹⁾	$	208,610	$	18	$	216	$	208,412
States & political subdivisions ⁽¹⁾	157,003		2,020		0		159,023
Corporate debt securities	259,362		139		9,554		249,947
Residential mortgage-backed securities	4,603		38		32		4,609
Commercial mortgage-backed securities	47,022		80		587		46,515
Collateralized debt obligations	65,039		30		830		64,239
Other debt securities	15,756		33		11		15,778
Total available-for-sale securities	$	757,395	$	2,358	$	11,230	$	748,523


(1)	In 2018, we began selling off our municipal bonds as part of a portfolio rebalancing and invested proceeds in short-term U.S. Treasuries. In 2019, proceeds from sales and maturities of the remaining municipal bond portfolio and short-term U.S. Treasuries were reinvested in corporate debt, structured securities and preferred stock.

Schedule of Amortized Cost and Estimated Fair Value of Available-For-Sale Securities by Remaining Contractual Term to Maturity

The amortized cost and estimated fair value of available-for-sale securities at December 31, 2019, are shown below by remaining contractual term to maturity. 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.



	December 31, 2019
	Amortized		Estimated
(in thousands)	cost		fair value
Due in one year or less	$	32,613	$	32,655
Due after one year through five years	336,377		339,033
Due after five years through ten years	120,716		122,068
Due after ten years	235,244		236,945
Total available-for-sale securities	$	724,950	$	730,701

Schedule of Available-For-Sale Securities in a Gross Unrealized Loss Position by Length of Time

The below securities have been evaluated and determined to be temporary impairments for which we expect to recover our entire principal plus interest. The following tables present available-for-sale securities based on length of time in a gross unrealized loss position as of:



	December 31, 2019
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		No. of
(dollars in thousands)	value		losses		value		losses		value		losses		holdings
Corporate debt securities	$	25,804	$	342	$	15,699	$	1,362	$	41,503	$	1,704	158
Residential mortgage-backed securities	16,712		50		0		0		16,712		50		7
Commercial mortgage-backed securities	21,981		147		372		1		22,353		148		30
Collateralized debt obligations	20,889		33		41,010		214		61,899		247		49
Other debt securities	2,350		39		0		0		2,350		39		2
Total available-for-sale securities	$	87,736	$	611	$	57,081	$	1,577	$	144,817	$	2,188	246
Quality breakdown of available-for-sale securities:
Investment grade	$	76,315	$	287	$	46,390	$	218	$	122,705	$	505	100
Non-investment grade	11,421		324		10,691		1,359		22,112		1,683		146
Total available-for-sale securities	$	87,736	$	611	$	57,081	$	1,577	$	144,817	$	2,188	246



	December 31, 2018
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized		No. of
(dollars in thousands)	value		losses		value		losses		value		losses		holdings
U.S. Treasury	$	129,474	$	19	$	11,656	$	197	$	141,130	$	216	7
Corporate debt securities	157,300		6,866		86,586		2,688		243,886		9,554		635
Residential mortgage-backed securities	777		6		1,618		26		2,395		32		3
Commercial mortgage-backed securities	17,624		175		16,997		412		34,621		587		30
Collateralized debt obligations	55,246		826		1,248		4		56,494		830		39
Other debt securities	8,213		11		0		0		8,213		11		7
Total available-for-sale securities	$	368,634	$	7,903	$	118,105	$	3,327	$	486,739	$	11,230	721
Quality breakdown of available-for-sale securities:
Investment grade	$	242,821	$	1,295	$	98,118	$	1,641	$	340,939	$	2,936	147
Non-investment grade	125,813		6,608		19,987		1,686		145,800		8,294		574
Total available-for-sale securities	$	368,634	$	7,903	$	118,105	$	3,327	$	486,739	$	11,230	721

Schedule of Investment Income, Net of Expenses, from Portfolios

Investment income, net of expenses, was generated from the following portfolios for the years ended December 31:



(in thousands)	2019		2018		2017
Available-for-sale securities ⁽¹⁾	$	22,496	$	24,978	$	23,669
Equity securities	1,418		628		—
Cash equivalents and other	10,546		5,628		2,486
Total investment income	34,460		31,234		26,155
Less: investment expenses	1,061		1,025		1,516
Investment income, net of expenses	$	33,399	$	30,209	$	24,639

(1)

Includes interest earned on note receivable from EFL of $1.6 million in 2018 and $1.7 million in 2017. The note was repaid in full in 2018.

Schedule of Realized Gains and Losses on Investments and Net Unrealized Gains and Losses Recognized during the Reporting Period Related to Equity Securities Held at the Reporting Date

Realized gains (losses) on investments were as follows for the years ended December 31:



(in thousands)	2019			2018			2017
Available-for-sale securities:
Gross realized gains	$	6,258		$	1,892		$	2,996
Gross realized losses	(1,639		)	(3,189		)	(1,756		)
Net realized gains (losses) on available-for-sale securities	4,619			(1,297		)	1,240
Equity securities	1,484			(819		)	—
Miscellaneous	0			106			94
Net realized investment gains (losses)	$	6,103		$	(2,010	)	$	1,334

The portion of net unrealized gains and losses recognized during the reporting period related to equity securities held at the reporting date is calculated as follows for the years ended December 31:



(in thousands)	2019		2018			2017
Equity securities: ⁽¹⁾
Net gains (losses) recognized during the period	$	1,484	$	(819	)	$	—
Less: net gains (losses) recognized on securities sold	360		(86		)	—
Net unrealized gains (losses) recognized on securities held at reporting date	$	1,124	$	(733	)	$	—

(1)

Effective January 1, 2018, changes in unrealized gains and losses on equity securities are included in net realized investment gains (losses).