3. Investments

Investments, Available-for-Sale

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

		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
June 30, 2017	Cost	Gains	Losses	Value
U.S. government and agencies	$ 19,641	$ 96	$ (238)	$ 19,499
Political subdivisions	4,173	10	—	4,183
Revenue and assessment	5,255	208	—	5,463
Corporate bonds	45,908	67	(1,146)	44,829
Collateralized mortgage obligations:
Agency backed	22,149	68	(607)	21,610
Non-agency backed – residential	2,213	560	(8)	2,765
Non-agency backed – commercial	1,056	654	—	1,710
Total fixed maturities, available-for-sale	100,395	1,663	(1,999)	100,059
Preferred stocks, available-for-sale	3,025	281	(40)	3,266
Mutual funds, available-for-sale	11,813	874		12,687
	$ 115,233	$ 2,818	$ (2,039)	$ 116,012

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
December 31, 2016	Cost		Gains		Losses			Value
U.S. government and agencies	$	19,142	$	112	$	(303	)	$	18,951
Political subdivisions		4,233		—		(68	)		4,165
Revenue and assessment		5,539		185		(41	)		5,683
Corporate bonds		47,238		107		(1,805	)		45,540
Collateralized mortgage obligations:
Agency backed		23,093		73		(744	)		22,422
Non-agency backed – residential		2,411		529		(7	)		2,933
Non-agency backed – commercial		1,408		487		—			1,895
Total fixed maturities, available-for-sale		103,064		1,493		(2,968	)		101,589
Preferred stocks, available-for-sale		3,025		198		(111	)		3,112
Mutual funds, available-for-sale		11,813		698		—			12,511
	$	117,902	$	2,389	$	(3,079	)	$	117,212

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
June 30, 2017	Gains		Losses		Losses		Securities
One year or less	$	1,779	$	3,574	$	—	$	5,353
After one through five years		12,802		17,345		—		30,147
After five through ten years		2,844		30,879		—		33,723
After ten years		4,751		—		—		4,751
No single maturity date		4,818		21,267		—		26,085
	$	26,994	$	73,065	$	—	$	100,059

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

June 30, 2017

December 31, 2016

—

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 June 30, 2017. There were no securities meeting these criteria at December 31, 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 June 30, 2017:	Securities		Value		Losses
Less than or equal to 10%		1	$	108	$	(4	)
Greater than 10%		—		—		—
		1	$	108	$	(4	)

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 June 30, 2017:	Losses		Losses			than 5%				10%		than 10%
Less than or equal to:
Three months	$	12,453	$	(39	)	$	(39	)	$	—		$	—
Six months		299		(3	)		(3	)		—			—
Nine months		34,834		(983	)		(983	)		—			—
Twelve months		27,008		(1,010	)		(839	)		(171	)		—
Greater than twelve months		108		(4	)		(4	)		—			—
Total	$	74,702	$	(2,039	)	$	(1,868	)	$	(171	)	$	—

	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, 2016:	Losses		Losses			than 5%				10%		than 10%
Less than or equal to:
Three months	$	58,550	$	(1,886	)	$	(1,461	)	$	(425	)	$	—
Six months		27,193		(1,186	)		(232	)		(954	)		—
Nine months		152		—			—			—
Twelve months		105		(7	)		—			(7	)		—
Greater than twelve months		—		—			—			—			—
Total	$	86,000	$	(3,079	)	$	(1,693	)	$	(1,386	)	$	-

Other-Than-Temporary Impairment

For the six months ended June 30, 2017, the Company did not recognize any OTTI charges in net income (loss).

The Company believes that the securities having unrealized losses at June 30, 2017 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.

For the six months ended June 30, 2016, the Company recognized OTTI charges in net income (loss) of $147 thousand related to one mutual fund.

Other Investments

Other investments consist of the common stock of a real estate investment trust and limited partnership interests in three funds that invest in (i) commercial real estate and secured commercial real estate loans acquired from financial intuitions, (ii) undervalued international publicly-traded equities and (iii)a pre-identified pool of select buyout private equity funds. These investments have redemption and transfer restrictions. The Company does not intend to sell these 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 June 30, 2017, the Company had unfunded commitments to invest $2.5 million into two of these investments.

Restrictions

At June 30, 2017, fixed maturities and cash equivalents with a fair value and amortized cost of $6.4 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 $17.2 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						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Fixed maturities, available-for-sale	$	616		$	981		$	1,239		$	1,951
Mutual funds, available-for-sale		158			160			320			366
Preferred stocks		44			25			89			49
Other investments		194			525			343			355
Cash and cash equivalents		217			66			376			107
Other		17			14			31			27
Investment expenses		(123	)		(125	)		(242	)		(247	)
	$	1,123		$	1,646		$	2,156		$	2,608

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

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2017			2016			2017			2016
Gains	$	8		$	—		$	8		$	—
Losses		(3	)		(15	)		(8	)		(17	)
Other-than-temporary impairment		—			(147	)		—			(147	)
	$	5		$	(162	)	$	-		$	(164	)

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 $1.1 million at both June 30, 2017 and December 31, 2016.