(2) Investments:

The following is a summary of available-for-sale securities at June 30, 2017 and December 31, 2016:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
June 30, 2017
Fixed maturities
Agency collateralized mortgage obligations	$	7,927	$	7,196	$	732	$	(1	)	$	731
Agency mortgage-backed securities		15,852		15,834		73		(55	)		18
Asset-backed securities		41,543		40,354		1,263		(74	)		1,189
Bank loans		21,557		21,496		135		(74	)		61
Certificates of deposit		3,127		3,125		2		-			2
Collateralized mortgage obligations		6,590		6,203		426		(39	)		387
Corporate securities		151,672		150,973		1,841		(1,142	)		699
Mortgage-backed securities		23,962		23,305		1,046		(389	)		657
Municipal obligations		112,718		112,280		745		(307	)		438
Non-U.S. government obligations		27,096		27,700		406		(1,010	)		(604	)
U.S. government obligations		56,971		57,247		32		(308	)		(276	)
Total fixed maturities		469,015		465,713		6,701		(3,399	)		3,302
Equity securities:
Consumer		43,293		21,242		22,374		(323	)		22,051
Energy		7,630		5,470		2,356		(196	)		2,160
Financial		39,549		28,156		11,581		(188	)		11,393
Industrial		28,093		9,591		18,593		(91	)		18,502
Technology		9,507		4,117		5,390		-			5,390
Mutual fund		53,088		52,288		1,323		(523	)		800
Other		6,757		4,408		2,526		(177	)		2,349
Total equity securities		187,917		125,272		64,143		(1,498	)		62,645

Total	$	656,932	$	590,985	$	70,844	$	(4,897	)		65,947

							Applicable federal income taxes				(23,081	)

							Net unrealized gains - net of tax			$	42,866

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
December 31, 2016
Fixed maturities
Agency collateralized mortgage obligations	$	6,171	$	6,000	$	171	$	-		$	171
Agency mortgage-backed securities		4,770		4,751		57		(38	)		19
Asset-backed securities		45,183		45,207		458		(482	)		(24	)
Bank loans		10,349		10,222		149		(22	)		127
Certificates of deposit		3,117		3,126		-		(9	)		(9	)
Collateralized mortgage obligations		9,104		9,096		290		(282	)		8
Corporate securities		142,683		143,356		1,643		(2,316	)		(673	)
Mortgage-backed securities		24,571		23,904		1,132		(465	)		667
Municipal obligations		129,335		130,204		391		(1,260	)		(869	)
Non-U.S. government obligations		24,681		26,461		230		(2,010	)		(1,780	)
U.S. government obligations		91,940		92,234		74		(368	)		(294	)
Total fixed maturities		491,904		494,561		4,595		(7,252	)		(2,657	)
Equity securities:
Consumer		32,576		15,231		17,656		(311	)		17,345
Energy		12,842		5,641		7,203		(2	)		7,201
Financial		31,186		22,417		8,998		(229	)		8,769
Industrial		21,145		6,239		15,098		(192	)		14,906
Technology		8,858		4,117		4,769		(28	)		4,741
Mutual fund		6,995		6,930		121		(56	)		65
Other		6,343		4,327		2,181		(165	)		2,016
Total equity securities		119,945		64,902		56,026		(983	)		55,043

Total	$	611,849	$	559,463	$	60,621	$	(8,235	)		52,386

							Applicable federal income taxes				(18,335	)

							Net unrealized gains - net of tax			$	34,051

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at June 30, 2017 and December 31, 2016, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	June 30, 2017							December 31, 2016
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		330	$	260,883	$	(2,007	)		397	$	291,048	$	(4,380	)
Greater than 12 months		31		8,398		(1,392	)		54		32,054		(2,872	)
Total fixed maturities		361		269,281		(3,399	)		451		323,102		(7,252	)

Equity securities:
12 months or less		48		50,707		(1,498	)		35		20,698		(983	)
Greater than 12 months		-		-		-			-		-		-
Total equity securities		48		50,707		(1,498	)		35		20,698		(983	)
Total fixed maturity and equity securities		409	$	319,988	$	(4,897	)		486	$	343,800	$	(8,235	)

The fair value and the cost or amortized costs of fixed maturity investments at June 30, 2017, by contractual maturity, are shown below. Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost

One year or less	$	45,007	$	45,001
Excess of one year to five years		268,334		269,180
Excess of five years to ten years		55,658		54,616
Excess of ten years		4,272		4,154
Contractual maturities		373,271		372,951
Asset-backed securities		95,744		92,762
Total	$	469,015	$	465,713

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying condensed consolidated statements of operations.

	Three Months Ended						Six Months Ended
	June 30						June 30
	2017			2016			2017			2016
Fixed maturities:
Gross gains	$	4,804		$	565		$	5,692		$	1,842
Gross losses		(4,776	)		(1,140	)		(6,149	)		(4,036	)
Net realized gains (losses)		28			(575	)		(457	)		(2,194	)

Equity securities:
Gross gains		2,892			1,126			4,498			16,636
Gross losses		(355	)		(1,248	)		(468	)		(3,948	)
Net realized gains (losses)		2,537			(122	)		4,030			12,688

Limited partnerships - net gain (loss)		731			977			6,017			(1,202	)


Total net gains	$	3,296		$	280		$	9,590		$	9,292

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended						Six Months Ended
	June 30						June 30
	2017			2016			2017			2016

Realized net gains (losses) on the disposal of securities	$	2,243		$	(1,142	)	$	2,642		$	7,167
Mark-to-market adjustment		249			(133	)		(35	)		(434	)
Equity in gains (losses) of limited partnership
investments - realized and unrealized		731			977			6,017			(1,202	)
Impairment:
Write-downs based upon objective criteria		(31	)		(1,095	)		(31	)		(3,155	)
Recovery of prior write-downs
upon sale or disposal		104			1,673			997			6,916

Total net gains	$	3,296		$	280		$	9,590		$	9,292

The mark-to-market adjustments in the table above represent the changes in fair value of options embedded in convertible debt securities held by the Company.

Shareholders' equity at June 30, 2017 included approximately $28,669, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

At June 30, 2017, limited partnership investments included approximately $39,479 invested in two partnerships which are managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners. Each of these investments contains profit sharing agreements, pursuant to which a portion of the gains will be paid to the affiliated organizations.

The Company's limited partnerships include one investment which primarily invests in public and private equity markets in India. The limited partnership investment's value as of June 30, 2017 and 2016 was $26,673 and $28,074, respectively. At June 30, 2017, the Company's estimated ownership interest in this limited partnership investment was approximately 5%. The Company's share of earnings (losses) from this limited partnership investment was $4,520 and ($196) for the six months ended June 30, 2017 and 2016, respectively.

	Six Months Ended
	June 30
	2017		2016
Total assets	$	497,901	$	464,045
Total partners' capital		497,901		458,178
Net increase (decrease) in partners' capital resulting from operations		80,173		(5,764	)

At June 30, 2017, the Company's invested assets, excluding limited partnership investments, included approximately $23,485 in portfolios managed by organizations in which certain of the Company's directors are officers, directors, general partners or owners.