Note 3 — Investments

Available-for-Sale Securities

The Company holds investments in fixed-maturity securities and equity securities that are classified as available-for-sale. At June 30, 2015 and December 31, 2014, the cost or amortized cost, gross unrealized gains and losses, and estimated fair value of the Company’s available-for-sale securities by security type were as follows:


	Cost or Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss			Estimated Fair Value
*As of June 30, 2015*
Fixed-maturity securities
U.S. Treasury and U.S. government agencies	$	10,918	$	18	$	(9	)	$	10,927
Corporate bonds		43,118		94		(807	)		42,405
Asset-backed securities		4,162		4		(3	)		4,163
Mortgage-backed securities		14,528		5		(95	)		14,438
State, municipalities, and political subdivisions		82,489		705		(657	)		82,537
Redeemable preferred stock		10,283		221		(37	)		10,467
Other		497		1		—			498

Total		165,995		1,048		(1,608	)		165,435
Equity securities		59,557		2,327		(1,553	)		60,331

Total available-for-sale securities	$	225,552	$	3,375	$	(3,161	)	$	225,766

*As of December 31, 2014*
Fixed-maturity securities
U.S. Treasury and U.S. government agencies	$	2,881	$	5	$	(8	)	$	2,878
Corporate bonds		23,645		57		(430	)		23,272
Asset-backed securities		697		—		—			697
Mortgage-backed securities		3,004		8		(3	)		3,009
State, municipalities, and political subdivisions		56,336		1,205		(38	)		57,503
Redeemable preferred stock		9,433		178		(54	)		9,557
Other		167		1		—			168

Total		96,163		1,454		(533	)		97,084
Equity securities		45,387		1,694		(1,531	)		45,550

Total available-for-sale securities	$	141,550	$	3,148	$	(2,064	)	$	142,634

As of June 30, 2015 and December 31, 2014, $112 and $113, respectively, of U.S. Treasury securities relate to a statutory deposit held in trust for the Treasurer of Alabama.

Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities as of June 30, 2015 and December 31, 2014 are as follows:


	Amortized Cost		Estimated Fair Value
*As of June 30, 2015*
Available-for-sale
Due in one year or less	$	687	$	690
Due after one year through five years		49,439		49,605
Due after five years through ten years		80,498		79,836
Due after ten years		20,843		20,866
Mortgage-backed securities		14,528		14,438

	$	165,995	$	165,435


	Amortized Cost		Estimated Fair Value
*As of December 31, 2014*
Available-for-sale
Due in one year or less	$	715	$	721
Due after one year through five years		25,973		26,093
Due after five years through ten years		56,448		56,847
Due after ten years		10,023		10,414
Mortgage-backed securities		3,004		3,009

	$	96,163	$	97,084

Sales of Available-for-Sale Securities

Proceeds received, and the gross realized gains and losses from sales of available-for-sale securities, for the three and six months ended June 30, 2015 and 2014 were as follows:


	Proceeds		Gross Realized Gains		Gross Realized Losses
Three months ended June 30, 2015
Fixed-maturity securities	$	1,051	$	1	$	(24	)

Equity securities	$	3,239	$	121	$	(172	)

Three months ended June 30, 2014
Fixed-maturity securities	$	18,271	$	799	$	—

Equity securities	$	3,166	$	433	$	(65	)

Six months ended June 30, 2015
Fixed-maturity securities	$	3,285	$	59	$	(30	)

Equity securities	$	7,994	$	329	$	(625	)

Six months ended June 30, 2014
Fixed-maturity securities	$	19,962	$	864	$	(9	)

Equity securities	$	5,930	$	508	$	(192	)

Other-than-temporary Impairment

The Company regularly reviews individual impaired investment securities for other-than-temporary impairment. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including:

•

the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

•

the length of time and the extent to which the market value of the security has been below its cost or amortized cost;

•

general market conditions and industry or sector specific factors;

•

nonpayment by the issuer of its contractually obligated interest and principal payments; and

•

the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities with gross unrealized loss positions at June 30, 2015 and December 31, 2014, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:


	Less Than Twelve Months					Twelve Months or Greater					Total
	Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value
As of June 30, 2015
Fixed-maturity securities
U.S. Treasury and U.S. government agencies	$	(9	)	$	3,224	$	—		$	—	$	(9	)	$	3,224
Corporate bonds		(789	)		33,325		(18	)		982		(807	)		34,307
Asset-backed securities		(3	)		1,234		—			—		(3	)		1,234
Mortgage-backed securities		(95	)		10,365		—			—		(95	)		10,365
State, municipalities, and political subdivisions		(609	)		40,529		(48	)		594		(657	)		41,123
Redeemable preferred stock		(37	)		2,981		—			—		(37	)		2,981

Total fixed-maturity securities		(1,542	)		91,658		(66	)		1,576		(1,608	)		93,234
Equity securities		(1,527	)		24,714		(26	)		834		(1,553	)		25,548

Total available-for-sale securities	$	(3,069	)	$	116,372	$	(92	)	$	2,410	$	(3,161	)	$	118,782

At June 30, 2015, there were 222 securities in an unrealized loss position. Of these securities, seven securities had been in an unrealized loss position for 12 months or greater.


	Less Than Twelve Months					Twelve Months or Greater					Total
	Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value		Gross Unrealized Loss			Estimated Fair Value
As of December 31, 2014
Fixed-maturity securities
U.S. Treasury and U.S. government agencies	$	(8	)	$	2,485	$	—		$	—	$	(8	)	$	2,485
Corporate bonds		(428	)		12,720		(2	)		998		(430	)		13,718
Asset-backed securities		—			209		—			—		—			209
Mortgage-backed securities		(3	)		1,018		—			—		(3	)		1,018
State, municipalities, and political subdivisions		(19	)		3,144		(19	)		202		(38	)		3,346
Redeemable preferred stock		(54	)		2,586		—			—		(54	)		2,586

Total fixed-maturity securities		(512	)		22,162		(21	)		1,200		(533	)		23,362
Equity securities		(1,449	)		18,848		(82	)		4,619		(1,531	)		23,467

Total available-for-sale securities	$	(1,961	)	$	41,010	$	(103	)	$	5,819	$	(2,064	)	$	46,829

At December 31, 2014, there were 94 securities in an unrealized loss position. Of these securities, nine securities had been in an unrealized loss position for 12 months or greater.

Based on the Company’s recent review, the unrealized losses on investments in fixed-maturity securities were caused primarily by expectation of interest rate changes. Because the decline in fair value is attributable to changes in interest rates or market conditions and not a decline in credit quality, and because the Company has the ability and intent to hold these securities and it is probable that the Company will not be required to sell these securities until a market price recovery or maturity, the Company does not consider any of its fixed-maturity securities to be other-than-temporarily impaired at June 30, 2015 and December 31, 2014.

In determining whether equity securities are other than temporarily impaired, the Company considers its intent and ability to hold a security for a period of time sufficient to allow for the recovery of cost. In the three and six months ended June 30, 2015, the Company determined that four and six equity securities, respectively, were other-than-temporarily impaired after considering the length of time each security had been in an unrealized loss position, the extent of the decline and the near term prospect for recovery. As a result, the Company recognized impairment losses of $293 and $1,983, respectively, for the three and six months ended June 30, 2015. There were no impairment losses recorded in the three and six months ended June 30, 2014.

Limited Partnership Investments

The Company has interests in limited partnerships that are not registered under the United States Securities Act of 1933, as amended, the securities laws of any state or the securities laws of any other jurisdictions. These partnerships are private equity funds managed by general partners who make decisions with regard to financial policies and operations. As such, the Company is not the primary beneficiary and does not consolidate these partnerships. The following table provides information related to the Company’s investments in limited partnerships.


	June 30, 2015						December 31, 2014
	Carrying Value		Unfunded Balance		(%)(a)		Carrying Value		Unfunded Balance		(%)(a)
Investment Strategy
Primarily in senior secured loans and, to a limited extent, in other debt and equity securities of private U.S. lower-middle-market companies. (b)(c)(e)	$	4,895	$	7,549		16.50	$	2,550	$	9,860		16.50
Value creation through active distressed debt investing primarily in bank loans, public and private corporate bonds, asset-backed securities, and equity securities received in connection with debt restructuring. (b)(d)(e)		3,194		4,682		0.65		—		—		—
Maximum long-term capital appreciation through long and short positions in equity and/or debt securities of publicly traded U.S. and non-U.S. issuers, derivative instruments and certain other financial instruments. (f)		14,627		—		66.78		—		—		—
High returns and long-term capital appreciation through investments in the power, utility and energy industries, and in the infrastructure sector. (b)(g)(h)		—		10,000		—		—		—		—

Total	$	22,716	$	22,231			$	2,550	$	9,860

(a)	Represents the Company’s percentage investment in the fund at the balance sheet date.

(b)	Except under certain circumstances, withdrawals from the funds or any assignments are not permitted. Distributions will be received when underlying investments of the funds are liquidated.

(c)	Expected to have a 10-year term and the capital commitment is expected to expire on September 3, 2019.

(d)	Expected to have a three-year term from the end of the capital commitment period, which is March 31, 2018.

(e)	At the fund manager’s discretion, the term of the fund may be extended for up to two additional one-year periods.

(f)	Withdrawal is permitted upon at least 45 days’ written notice to the general partner, provided that the Company has been a limited partner for at least 12 months.

(g)	Expected to have a 10-year term and the capital commitment is expected to expire on June 30, 2020.

(h)	With the consent of a super majority, the term of the fund may be extended for up to three additional one-year periods.

The following is the aggregated summarized unaudited financial information of limited partnerships, which in certain cases is presented on a three-month lag due to the unavailability of information at the Company’s respective balance sheet dates. In applying the equity method of accounting, the Company uses the most recently available financial information provided by the general partner of each of these partnerships. The financial statements of these limited partnerships are audited annually.


	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Operating results:
Total income (loss)	$	(4,577	)	$	(4,838	)
Total expenses		254			957
Net loss	$	(4,831	)	$	(5,795	)

	June 30, 2015			December 31, 2014
Balance Sheet:
Total assets	$	170,659		$	15,940
Total liabilities	$	951		$	513

For the three and six months ended June 30, 2015, the Company recognized net investment losses of $197 and $462, respectively, for these investments. At June 30, 2015 and December 31, 2014, the Company’s cumulative contributed capital to the partnerships totaled $23,269 and $2,640, respectively, and the Company’s maximum exposure to loss aggregated $22,716 and $2,550, respectively. There were no limited partnership investments in the six months ended June 30, 2014.

Investment in Joint Venture

In March 2015, the Company contributed additional cash of $270 to the joint venture organized in September 2014. The joint venture intends to use the additional funds to acquire additional land for development.

At June 30, 2015 and December 31, 2014, the Company’s maximum exposure to loss relating to the joint venture was $4,746 and $4,477, respectively, representing the carrying value of the investment. At June 30, 2015 and December 31, 2014, undistributed losses of $24 and $23, respectively, from this equity method investment were included in the Company’s consolidated retained income. The joint venture partners received no distributions during 2015. The following tables provide summarized unaudited financial results for the three months and six months ended June 30, 2015 and the unaudited financial positions of the joint venture at June 30, 2015 and December 31, 2014:


	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
Operating results:
Total revenues	$	—		$	—
Total expenses		—			(1	)

Net loss	$	—		$	(1	)

The Company’s share of net loss*	$	(1	)	$	(1	)

*	Included in net investment income in the Company’s consolidated statements of income.


	June 30, 2015		December 31, 2014
Balance Sheet:
Construction in progress – real estate	$	9,616	$	3,612
Cash		407		1,323
Other		55		40

Total assets	$	10,078	$	4,975

Accounts payable	$	982	$	—
Construction loan		3,794		—
Other liabilities		28		—
Members’ capital		5,274		4,975

Total liabilities and members’ capital	$	10,078	$	4,975

Investment in joint venture, at equity	$	4,746	$	4,477

Real Estate Investments

The Company’s real estate investments include one Acquisition, Development and Construction Loan Arrangement (“ADC Arrangement”) and the leasing of office and retail space to tenants, wet and dry boat storage, a restaurant, and fuel services with respect to marina clients and recreational boaters. Real estate investments consist of the following as of June 30, 2015 and December 31, 2014:


	June 30, 2015			December 31, 2014
Land	$	11,476		$	11,476
Land improvements		1,449			1,425
Buildings		3,104			3,097
Other		1,386			1,359

Total, at cost		17,415			17,357
Less: accumulated depreciation and amortization		(1,253	)		(1,107	)

Real estate, net		16,162			16,250
ADC Arrangement classified as real estate investment		6,285			2,888

Real estate investments	$	22,447		$	19,138

Depreciation and amortization expense related to real estate investments was $90 and $100 for the three months ended June 30, 2015 and 2014, respectively, and $193 and $198 for the six months ended June 30, 2015 and 2014, respectively.

ADC Arrangement

During the first quarter of 2015, the Company amended the maximum loan amount under the ADC Arrangement from $9,785 to $10,200. The increased financing is intended for use in acquiring additional land.

At June 30, 2015 and December 31, 2014, the Company’s maximum exposure to loss relating to this variable interest was $6,285, and $2,888, respectively, representing the carrying value of the ADC Arrangement.

Real Estate Development in Progress

During the quarter ended June 30, 2015, the Company deposited a total of $70 to secure the right to purchase land in Riverview, Florida where a retail center will be constructed for lease or for sale. The land acquisition and the development project will be operated and managed through a joint venture in which the Company’s subsidiary, Greenleaf Essence LLC, has a controlling financial interest and of which it is the primary beneficiary. As such, the joint venture is consolidated with the Company’s operations.

Net Investment Income

Net investment income (loss), by source, is summarized as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Available-for-sale securities:
Fixed-maturity securities	$	1,051		$	1,055		$	1,877		$	2,052
Equity securities		869			484			1,796			741
Investment expense		(167	)		(124	)		(312	)		(209	)
Limited partnership investments		(197	)		—			(462	)		—
Real estate investments		62			(119	)		(21	)		(403	)
Cash and cash equivalents		162			185			297			359
Other		15			—			29			—

Net investment income	$	1,795		$	1,481		$	3,204		$	2,540