3. Investments

Investments, Available-for-Sale

The following tables summarize the Company’s investment securities (in thousands).

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
September 30, 2016	Cost	Gains	Losses	Value
U.S. government and agencies	$ 19,141	$ 246	$ (7)	$ 19,380
Political subdivisions	4,264	55	—	4,319
Revenue and assessment	5,639	308	—	5,947
Corporate bonds	48,419	391	(106)	48,704
Collateralized mortgage obligations:
Agency backed	23,553	86	(15)	23,624
Non-agency backed – residential	2,493	569	(7)	3,055
Non-agency backed – commercial	1,433	489	—	1,922
Total fixed maturities, available-for-sale	104,942	2,144	(135)	106,951
Preferred stock, available-for-sale	3,025	307	(19)	3,313
Mutual funds, available-for-sale	11,813	569	—	12,382
	$ 119,780	$ 3,020	$ (154)	$ 122,646

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2015	Cost		Gains		Losses			Value
U.S. government and agencies	$	13,036	$	162	$	(85	)	$	13,113
State		698		4		—			702
Political subdivisions		4,354		9		—			4,363
Revenue and assessment		11,770		895		(21	)		12,644
Corporate bonds		79,426		2,022		(663	)		80,785
Collateralized mortgage obligations:
Agency backed		793		80		—			873
Non-agency backed – residential		2,877		579		(1	)		3,455
Non-agency backed – commercial		1,891		616		—			2,507
Total fixed maturities, available-for-sale		114,845		4,367		(770	)		118,442
Preferred stock, available-for-sale		1,500		223		—			1,723
Mutual funds, available-for-sale		11,959		120		(662	)		11,417
	$	128,304	$	4,710	$	(1,432	)	$	131,582

The following table sets forth the scheduled maturities of the Company’s fixed maturity securities based on their fair values (in thousands). Actual maturities may differ from contractual maturities because certain securities may be called or prepaid by the issuers.

					Securities
	Securities		Securities		with No		All
	with		with		Unrealized		Fixed
	Unrealized		Unrealized		Gains or		Maturity
September 30, 2016	Gains		Losses		Losses		Securities
One year or less	$	4,821	$	3,572	$	—	$	8,393
After one through five years		24,019		2,112		2,000		28,131
After five through ten years		16,149		12,957		—		29,106
After ten years		7,762		4,958		—		12,720
No single maturity date		5,709		22,892		—		28,601
	$	58,460	$	46,491	$	2,000	$	106,951

The following table reflects the number of fixed maturity securities with gross unrealized gains and losses. Gross unrealized losses are further segregated by the length of time that individual securities have been in a continuous unrealized loss position.

Gross Unrealized Losses

Less than

Greater

Gross

or equal to

than 12

Unrealized

At:

12 months

months

Gains

September 30, 2016

—

December 31, 2015

The following table reflects the fair value and gross unrealized losses of those fixed maturity securities in a continuous unrealized loss position for greater than 12 months at December 31, 2015. There were no securities meeting these criteria at September 30, 2016. Gross unrealized losses are further segregated by the percentage of amortized cost (in thousands, except number of securities).

	Number				Gross
Gross Unrealized Losses	of		Fair		Unrealized
at December 31, 2015:	Securities		Value		Losses
Less than or equal to 10%		4	$	7,689	$	(241	)
Greater than 10%		—		—		—
		4	$	7,689	$	(241	)

The following tables set forth the amount of gross unrealized losses by current severity (as compared to amortized cost) and length of time that individual securities have been in a continuous unrealized loss position (in thousands).

	Fair Value of
	Securities with
Length of	Gross		Gross			Severity of Gross Unrealized Losses
Gross Unrealized Losses	Unrealized		Unrealized			Less			5% to			Greater
at September 30, 2016:	Losses		Losses			than 5%				10%		than 10%
Less than or equal to:
Three months	$	47,891	$	(147	)	$	(147	)	$	—		$	—
Six months		—		—			—			—			—
Nine months		105		(7	)		—			(7	)		—
Twelve months		—		—			—			—			—
Greater than twelve months		—		—			—			—			—
Total	$	47,996	$	(154	)	$	(147	)	$	(7	)	$	—

	Fair Value of
	Securities with
Length of	Gross		Gross			Severity of Gross Unrealized Losses
Gross Unrealized Losses	Unrealized		Unrealized			Less			5% to			Greater
at December 31, 2015:	Losses		Losses			than 5%				10%		than 10%
Less than or equal to:
Three months	$	20,899	$	(130	)	$	(130	)	$	—		$	—
Six months		7,036		(465	)		—			(465	)		—
Nine months		14,057		(395	)		(197	)		(197	)		(1	)
Twelve months		7,892		(201	)		(201	)		—			—
Greater than twelve months		7,689		(241	)		(241	)		—			—
Total	$	57,573	$	(1,432	)	$	(769	)	$	(662	)	$	(1	)

Other-Than-Temporary Impairment

For the nine months ended September 30, 2016, the Company recognized OTTI charges in net income of $147 thousand related to one mutual fund.

The Company believes that the remaining securities having unrealized losses at September 30, 2016 were not other-than-temporarily impaired. The Company also does not intend to sell any of these securities and it is more likely than not that the Company will not be required to sell any of these securities before the recovery of their amortized cost basis.

Other Investments

Other investments consist of the common stock of a real estate investment trust and limited partnership interests in two funds that invest in (i) commercial real estate and secured commercial real estate loans acquired from financial intuitions, (ii) small balance distressed secured loans and debt securities and (iii) undervalued international publicly-traded equities. These investments have redemption and transfer restrictions. The Company recently withdrew from one limited partnership investment and received the final withdrawal installment in July 2016. The Company does not intend to sell the remaining investments, and it is more likely than not that the Company will not be required to sell them before the expiration of such restrictions. At September 30, 2016, the Company had unfunded commitments of $0.2 million with two of these investments.

Restrictions

At September 30, 2016, fixed maturities and cash equivalents with a fair value and amortized cost of $6.6 million were on deposit with various insurance departments as a requirement of doing business in those states. Cash equivalents with a fair value and amortized cost of $15.6 million were on deposit with another insurance company as collateral for an assumed reinsurance contract.

Investment Income and Net Realized Gains and Losses

The major categories of investment income follow (in thousands).

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Fixed maturities, available-for-sale	$	971		$	1,077		$	2,922		$	3,131
Mutual funds, available-for-sale		153			164			519			457
Other investments		53			(27	)		408			301
Other		130			56			313			174
Investment expenses		(120	)		(126	)		(367	)		(368	)
	$	1,187		$	1,144		$	3,795		$	3,695

The components of net realized gains (losses) on investments, available-for-sale at fair value follow (in thousands).

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Gains	$	4,900		$	—		$	4,900		$	3
Losses		(3	)		(6	)		(20	)		(16	)
Other-than-temporary impairment		—			—			(147	)		—
	$	4,897		$	(6	)	$	4,733		$	(13	)

Realized gains and losses on sales and redemptions are computed based on specific identification. The non-credit related portion of other-than-temporary impairment (“OTTI”) is included in other comprehensive loss. The amounts of non-credit OTTI for securities still owned was $0.9 million for non-agency backed residential collateralized mortgage obligations (“CMOs”) and $0.2 million related to non-agency backed commercial CMOs at both September 30, 2016 and December 31, 2015.