5. INVESTMENTS

Unrealized Gains and Losses

The difference between amortized cost or cost and estimated fair value and gross unrealized gains and losses, by major investment category, consisted of the following:

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	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized
	or Cost		Gains		Losses		Fair Value
	(In thousands)
June 30, 2019
Debt securities - available-for-sale:
United States government obligations and authorities	$	147,663	$	3,206	$	149	$	150,720
Obligations of states and political subdivisions	11,483		240		6		11,717
Corporate	259,243		8,905		154		267,994
International	20,331		373		11		20,693
	438,720		12,724		320		451,124

Debt securities - held-to-maturity:
United States government obligations and authorities	3,591		11		68		3,534
Corporate	853		20		—		873
International	55		1		—		56
	4,499		32		68		4,463
Total investments, excluding equity securities	$	443,219	$	12,756	$	388	$	455,587

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	Amortized		Gross		Gross
	Cost		Unrealized		Unrealized
	or Cost		Gains		Losses		Fair Value
	(In thousands)
December 31, 2018
Debt securities - available-for-sale:
United States government obligations and authorities	$	127,928	$	1,091	$	1,151	$	127,868
Obligations of states and political subdivisions	9,870		27		130		9,767
Corporate	273,192		510		4,971		268,731
International	22,674		12		411		22,275
	433,664		1,640		6,663		428,641

Debt securities - held-to-maturity:
United States government obligations and authorities	4,085		1		158		3,928
Corporate	986		2		6		982
International	55		—		1		54
	5,126		3		165		4,964
Total investments, excluding equity securities	$	438,790	$	1,643	$	6,828	$	433,605

Net Realized and Unrealized Gains and Losses

The Company calculates the gain or loss realized on the sale of investments by comparing the sales price (fair value) to the cost or amortized cost of the security sold. Net realized gains and losses on investments are determined in accordance with the specific identification method.

Net realized and unrealized gains (losses) recognized in earnings, by major investment category, consisted of the following:

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	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
	(In thousands)
Gross realized and unrealized gains:
Debt securities	$	834		$	41		$	1,151		$	264
Equity securities	1,477			1,088			4,307			2,241
Total gross realized and unrealized gains	2,311			1,129			5,458			2,505

Gross realized and unrealized losses:
Debt securities	(120		)	(877		)	(520		)	(2,318		)
Equity securities	(236		)	(44		)	(682		)	(1,031		)
Total gross realized and unrealized losses	(356		)	(921		)	(1,202		)	(3,349		)
Net realized and unrealized gains (losses) on investments	$	1,955		$	208		$	4,256		$	(844	)

The above line item, net realized and unrealized gains (losses) on investments, includes the following equity securities gains (losses) recognized in earnings:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2019			2018		2019		2018
	(In thousands)
Net realized and unrealized gains (losses)	$	1,241		$	1,044	$	3,625	$	1,210
Less:
Net realized and unrealized gains (losses) on securities sold	(76		)	42		250		324
Net unrealized gains (losses) still held as of the end-of-period	$	1,317		$	1,002	$	3,375	$	886

Contractual Maturity

Actual maturities may differ from contractual maturities because issuers may have the right to call or pre-pay obligations.

Amortized cost and estimated fair value of debt securities, by contractual maturity, consisted of the following:

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	June 30, 2019
	Amortized
	Cost		Fair Value
Securities with Maturity Dates	(In thousands)
Debt securities, available-for-sale:
One year or less	$	16,722	$	16,739
Over one through five years	161,198		164,830
Over five through ten years	127,038		132,236
Over ten years	133,762		137,319
	438,720		451,124
Debt securities, held-to-maturity:
One year or less	80		80
Over one through five years	4,185		4,146
Over five through ten years	234		237
	4,499		4,463
Total	$	443,219	$	455,587

Net Investment Income

Net investment income consisted of the following:

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	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(In thousands)
Interest income	$	4,169	$	2,927	$	7,826	$	5,815
Dividends income	90		51		143		106
Net investment income	$	4,259	$	2,978	$	7,969	$	5,921

Aging of Gross Unrealized Losses

Gross unrealized losses and related fair values for debt securities, grouped by duration of time in a continuous unrealized loss position, consisted of the following:

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	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
					(In thousands)
June 30, 2019
Debt securities - available-for-sale:
United States government obligations and authorities	$	3,088	$	2	$	21,210	$	147	$	24,298	$	149
Obligations of states and political subdivisions	—		—		2,606		6		2,606		6
Corporate	11,678		87		15,689		67		27,367		154
International	3,027		10		679		1		3,706		11
	17,793		99		40,184		221		57,977		320

Debt securities, held-to-maturity:
United States government obligations and authorities	—		—		2,894		68		2,894		68
Corporate	20		—		—		—		20		—
International	—		—		40		—		40		—
	20		—		2,934		68		2,954		68
Total investments, excluding equity securities	$	17,813	$	99	$	43,118	$	289	$	60,931	$	388



	Less than 12 months				12 months or longer				Total
			Gross				Gross				Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
					(In thousands)
December 31, 2018
Debt securities - available-for-sale:
United States government obligations and authorities	$	22,673	$	246	$	29,727	$	905	$	52,400	$	1,151
Obligations of states and political subdivisions	3,254		18		4,786		112		8,040		130
Corporate	160,361		3,058		53,232		1,913		213,593		4,971
International	15,608		217		4,678		194		20,286		411
	201,896		3,539		92,423		3,124		294,319		6,663

Debt securities, held-to-maturity:
United States government obligations and authorities	229		1		3,113		157		3,342		158
Corporate	591		6		90		—		681		6
International	54		1		—		—		54		1
	874		8		3,203		157		4,077		165
Total investments, excluding equity securities	$	202,770	$	3,547	$	95,626	$	3,281	$	298,396	$	6,828

As of June 30, 2019, the Company held a total of 171 debt securities that were in an unrealized loss position, of which 123 securities were in an unrealized loss position continuously for 12 months or more. As of December 31, 2018, the Company held a total of 1,222 debt and equity securities that were in an unrealized loss position, of which 371 securities were in an unrealized loss position continuously for 12 months or more. The unrealized losses associated with these securities consisted primarily of losses related to corporate securities.

The Company holds some of its debt securities as available-for-sale and as such, these securities are recorded at fair value. The Company continually monitors the difference between cost and the estimated fair value of its investments, which involves uncertainty as to whether declines in value are temporary in nature. If the decline of a particular investment is deemed temporary, the Company records the decline as an unrealized loss in shareholders’ equity. If the decline is deemed to be other than temporary, the Company will write the security’s cost-basis or amortized cost-basis down to the fair value of the investment and recognizes an OTTI loss in the Company’s consolidated statement of operations. Additionally, any portion of such decline related to debt securities that is believed to arise from factors other than credit will be recorded as a component of other comprehensive income rather than charged against income. The Company did not have any OTTI losses on its available-for-sale debt securities for the first six months of 2019 and 2018.

The Company's equity investments are measured at fair value through net income (loss).

Collateral Deposits

Cash and cash equivalents and investments, the majority of which were debt securities, with fair values of $10.7 million and $10.3 million, were deposited with governmental authorities and into custodial bank accounts as required by law or contractual obligations as of June 30, 2019 and December 31, 2018, respectively.