INVESTMENTS

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

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)
September 30, 2019
Debt securities - available-for-sale:
United States government obligations and authorities	$	170,400	$	3,986	$	146	$	174,240
Obligations of states and political subdivisions	13,002		326		—		13,328
Corporate	244,735		10,765		101		255,399
International	24,561		623		21		25,163
	452,698		15,700		268		468,130

Debt securities - held-to-maturity:
United States government obligations and authorities	3,589		18		62		3,545
Corporate	725		23		—		748
International	55		1		—		56
	4,369		42		62		4,349
Total investments, excluding equity securities	$	457,067	$	15,742	$	330	$	472,479

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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						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
	(In thousands)
Gross realized and unrealized gains:
Debt securities	$	897	$	91	$	2,048	$	355
Equity securities	326		1,922		4,633		4,163
Total gross realized and unrealized gains	1,223		2,013		6,681		4,518

Gross realized and unrealized losses:
Debt securities	(4)		(253)		(524)		(2,571)
Equity securities	(425)		—		(1,107)		(1,031)
Total gross realized and unrealized losses	(429)		(253)		(1,631)		(3,602)
Net realized and unrealized gains (losses) on investments	$	794	$	1,760	$	5,050	$	916

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						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
	(In thousands)
Net realized and unrealized gains (losses)	$	(99)	$	1,922	$	3,526	$	3,132
Less:
Net realized and unrealized gains (losses) on securities sold	1,012		409		394		674
Net unrealized gains (losses) still held as of the end-of-period	$	(1,111)	$	1,513	$	3,132	$	2,458

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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	September 30, 2019
	Amortized
	Cost		Fair Value
Securities with Maturity Dates	(In thousands)
Debt securities, available-for-sale:
One year or less	$	24,715	$	24,761
Over one through five years	152,917		157,160
Over five through ten years	139,570		146,237
Over ten years	135,496		139,972
	452,698		468,130
Debt securities, held-to-maturity:
One year or less	206		207
Over one through five years	3,983		3,960
Over five through ten years	69		71
Over ten years	111		111
	4,369		4,349
Total	$	457,067	$	472,479

Net Investment Income

Net investment income consisted of the following:

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	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019		2018		2019		2018
	(In thousands)
Interest income	$	4,005	$	3,089	$	11,831	$	8,904
Dividends income	63		48		206		154
Net investment income	$	4,068	$	3,137	$	12,037	$	9,058

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)
September 30, 2019
Debt securities - available-for-sale:
United States government obligations and authorities	$	20,948	$	115	$	6,238	$	31	$	27,186	$	146
Obligations of states and political subdivisions	—		—		—		—		—		—
Corporate	10,502		36		5,277		65		15,779		101
International	2,202		18		1,023		3		3,225		21
	33,652		169		12,538		99		46,190		268

Debt securities, held-to-maturity:
United States government obligations and authorities	100		—		2,306		62		2,406		62
Corporate	20		—		—		—		20		—
International	—		—		—		—		—		—
	120		—		2,306		62		2,426		62
Total investments, excluding equity securities	$	33,772	$	169	$	14,844	$	161	$	48,616	$	330


	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 September 30, 2019, the Company held a total of 106 debt securities that were in an unrealized loss position, of which 42 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 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 nine 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 $10.8 million and $10.3 million, were deposited with governmental authorities and into custodial bank accounts as required by law or contractual obligations as of September 30, 2019 and December 31, 2018, respectively.