(4)	INVESTMENTS

Unrealized Gains and Losses

The amortized cost and the fair value of debt and equity securities as of March 31, 2016 and December 31, 2015 are summarized as follows:

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
March 31, 2016
Debt Securities - available-for-sale:
United States government obligations and authorities	$	52,406	$	1,075	$	8	$	53,473
Obligations of states and political subdivisions		122,143		2,206		39		124,310
Corporate		146,571		2,854		499		148,926
International		12,448		176		88		12,536
		333,568		6,311		634		339,245

Debt Securities - held-to-maturity:
United States government obligations and authorities		4,238		65		82		4,221
Corporate		1,849		33		6		1,876
International		131		4		-		135
		6,218		102		88		6,232

Equity securities		36,312		6,297		1,779		40,830

Total investments	$	376,098	$	12,710	$	2,501	$	386,307

	Amortized Cost or Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
December 31, 2015
Debt Securities - available-for-sale:
United States government obligations and authorities	$	61,384	$	489	$	320	$	61,553
Obligations of states and political subdivisions		109,152		1,590		40		110,702
Corporate		154,957		1,153		1,490		154,620
International		12,528		18		243		12,303
		338,021		3,250		2,093		339,178

Debt Securities - held-to-maturity:
United States government obligations and authorities		4,275		30		204		4,101
Corporate		2,253		14		20		2,247
International		91		-		-		91
		6,619		44		224		6,439

Equity securities		33,581		6,809		1,856		38,534

Total investments	$	378,221	$	10,103	$	4,173	$	384,151

Contractual Maturity

The amortized cost and estimated fair value of debt securities as of March 31, 2016 and December 31, 2015 by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	March 31, 2016				December 31, 2015
Securities with maturity dates:	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in thousands)
Debt securities, available-for-sale:
One year or less	$	30,152	$	30,177	$	24,470	$	24,488
Over one through five years		173,698		175,777		170,797		171,113
Over five through ten years		129,692		133,258		142,728		143,545
Over ten years		26		33		26		32
		333,568		339,245		338,021		339,178
Debt securities, held-to-maturity:
One year or less		478		480		486		487
Over one through five years		1,927		1,976		1,899		1,915
Over five through ten years		3,813		3,776		4,234		4,037
		6,218		6,232		6,619		6,439

Total	$	339,786	$	345,477	$	344,640	$	345,617

Net Investment Income

Net investment income was as follows:

	Three Months Ended March 31,
	2016		2015
	(in thousands)
Interest income	$	1,853	$	1,440
Dividends income		187		106
Net investment income	$	2,040	$	1,546

Net Realized Gains and Losses

The amount of gross realized gains and losses were as follows:

	Three Months Ended March 31,
	2016			2015
	(in thousands)
Gross realized gains:
Debt securities	$	1,304		$	515
Equity securities		738			1,395
Total gross realized gains		2,042			1,910

Gross realized losses:
Debt securities		(540	)		(103	)
Equity securities		(575	)		(103	)
Total gross realized losses		(1,115	)		(206	)

Net realized gains on investments	$	927		$	1,704

During the three months ended March 31, 2016 and 2015, the proceeds from sales of available-for-sale investment securities were $66.7 million and $53.5 million, respectively.

Aging of Gross Unrealized Losses

As of March 31, 2016 and December 31, 2015, gross unrealized losses and related fair values for debt and equity securities, grouped by duration of time in a continuous unrealized loss position, were as follows:

	Less than 12 months				12 months or longer				Total
March 31, 2016	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
					(in thousands)
Debt securities:
United States government obligations and authorities	$	1,058	$	2	$	660	$	6	$	1,718	$	8
Obligations of states and political subdivisions		15,750		38		1,032		1		16,782		39
Corporate		31,204		466		2,935		33		34,139		499
International		2,092		60		603		28		2,695		88
		50,104		566		5,230		68		55,334		634

Equity securities		10,905		1,777		25		2		10,930		1,779

Total investments	$	61,009	$	2,343	$	5,255	$	70	$	66,264	$	2,413

	Less than 12 months				12 months or longer				Total
December 31, 2015	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
					(in thousands)
Debt securities:
United States government obligations and authorities	$	30,464	$	303	$	659	$	17	$	31,123	$	320
Obligations of states and political subdivisions		16,652		40		-		-		16,652		40
Corporate		87,176		1,420		3,590		70		90,766		1,490
International		8,660		191		281		52		8,941		243
		142,952		1,954		4,530		139		147,482		2,093

Equity securities		11,790		1,850		84		6		11,874		1,856

Total investments	$	154,742	$	3,804	$	4,614	$	145	$	159,356	$	3,949

The Company holds its equity and 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 writes its cost-basis or amortized cost-basis down to the fair value of the investment and records an other than temporarily impaired ("OTTI") loss on its statement of operations. In addition, any portion of such decline related to debt securities that is believed to arise from factors other than credit is recorded as a component of other comprehensive income rather than charged against income.

The Company’s assessment of equity securities initially involves an evaluation of all securities that are in an unrealized loss position, regardless of the duration or severity of the loss, as of the applicable balance sheet date. Such initial review consists primarily of assessing whether: (i) there has been a negative credit or news event with respect to the issuer that could indicate the existence of an OTTI; and (ii) the Company has the ability and intent to hold an equity security for a period of time sufficient to allow for an anticipated recovery (generally considered to be one year from the balance sheet date).

To the extent that an equity security in an unrealized loss position is not impaired based on the initial review described above, the Company then further evaluates such equity security by considering qualitative and quantitative factors, including facts and circumstances specific to individual securities, asset classes, the financial condition of the issuer, changes in dividend payment, the length of time fair value had been less than cost, the severity of the decline in fair value below cost, industry outlook and our ability and intent to hold each position until its forecasted recovery.

If the Company intends to sell, or it is more likely than not that, the Company will sell, a debt security before recovery of its amortized cost basis, the total amount of the unrealized loss position is recognized as an OTTI loss in income. To the extent that a debt security that is in an unrealized loss position is not impaired based on the preceding, the Company will consider a debt security to be impaired when it believes it to be probable that the Company will not be able to collect the entire amortized cost basis.

During the three months ended March 31, 2016 and 2015, we did not have any material OTTI losses.

Collateral Deposits

As of March 31, 2016, investments with fair values of approximately $12.0 million, the majority of which were debt securities, were deposited with governmental authorities and into custodial bank accounts as required by law or contractually obligated.