NOTE 3. INVESTMENTS

The following table details the difference between cost or adjusted/amortized cost and estimated fair value, by major investment category, at September 30, 2017 and December 31, 2016:

	Cost or Adjusted / Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
September 30, 2017
U.S. government and agency securities	$	30,369	$	15	$	381	$	30,003
States, municipalities and political subdivisions		274,468		2,276		1,077		275,667
Special revenue		55,103		53		416		54,740
Industrial and miscellaneous		128,182		1,451		227		129,406
Redeemable preferred stocks		4,672		21		25		4,668
Total fixed maturities		492,794		3,816		2,126		494,484
Nonredeemable preferred stocks		14,305		60		85		14,280
Equity securities		13,423		442		2,749		11,116
Total equity securities		27,728		502		2,834		25,396
Total Investments	$	520,522	$	4,318	$	4,960	$	519,880

	Cost or Adjusted / Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(In thousands)
December 31, 2016
U.S. government and agency securities	$	107,968	$	29	$	449	$	107,548
States, municipalities and political subdivisions		281,935		298		4,872		277,361
Special revenue		53,726		29		759		52,996
Industrial and miscellaneous		129,687		535		577		129,645
Redeemable preferred stocks		3,595		15		149		3,461
Total fixed maturities		576,911		906		6,806		571,011
Nonredeemable preferred stocks		14,935		40		460		14,515
Equity securities		19,255		1,197		2,996		17,456
Total equity securities		34,190		1,237		3,456		31,971
Total Investments	$	611,101	$	2,143	$	10,262	$	602,982

The Company calculates the gain or loss realized on the sale of investments by comparing the sales price (fair value) to the cost or adjusted/amortized cost of the security sold. The Company determines the cost or adjusted/amortized cost of the security sold using the specific-identification method. The following tables detail the Company’s net realized gains (losses) by major investment category for the three and nine months ended September 30, 2017 and 2016.

	2017					2016
	Gains (Losses)			Fair Value at Sale		Gains (Losses)			Fair Value at Sale
	(In thousands)
Three Months Ended September 30,
Fixed maturities	$	413		$	253,673	$	1,091		$	17,301
Equity securities		1,260			16,454		289			1,739
Total realized gains		1,673			270,127		1,380			19,040
Fixed maturities		(23	)		26,602		(232	)		575
Equity securities		(1,285	)		6,781		(29	)		445
Total realized losses		(1,308	)		33,383		(261	)		1,020
Net realized gain	$	365		$	303,510	$	1,119		$	20,060

	2017					2016
	Gains (Losses)			Fair Value at Sale		Gains (Losses)			Fair Value at Sale
	(In thousands)
Nine Months Ended September 30,
Fixed maturities	$	448		$	463,538	$	2,668		$	166,350
Equity securities		2,231			22,848		46			7,855
Total realized gains		2,679			486,386		2,714			174,205
Fixed maturities		(197	)		40,192		(66	)		12,973
Equity securities		(1,471	)		10,610		(886	)		2,948
Total realized losses		(1,668	)		50,802		(952	)		15,921
Net realized gain	$	1,011		$	537,188	$	1,762		$	190,126

The table below summarizes the Company’s fixed maturities at September 30, 2017 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of those obligations.

	September 30, 2017
	Cost or Amortized Cost		Percent of Total			Fair Value		Percent of Total
	(In thousands)					(In thousands)
Due one year or less	$	65,863		13	%	$	65,879		13	%
Due after one year through five years		142,019		29	%		142,550		29	%
Due after five years through ten years		160,873		33	%		161,468		33	%
Due after ten years		124,039		25	%		124,587		25	%
Total	$	492,794		100	%	$	494,484		100	%

The following table summarizes the Company’s net investment income by major investment category for the three and nine months ended September 30, 2017 and 2016, respectively:

	Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016		2017			2016
	(In thousands)					(In thousands)
Fixed maturities	$	2,479		$	2,338	$	7,640		$	6,368
Equity securities		479			495		1,458			1,465
Cash, cash equivalents and short-term Investments		441			79		544			215
Other investments		(24	)		14		(24	)		(96	)
Net investment income		3,375			2,926		9,618			7,952
Investment expenses		640			600		1,408			1,366
Net investment income, less investment expenses	$	2,735		$	2,326	$	8,210		$	6,586

The following tables present an aging of our unrealized investment losses by investment class as of September 30, 2017 and December 31, 2016:

	Less Than Twelve Months						Twelve Months or More
	Number of Securities		Gross Unrealized Losses		Fair Value		Number of Securities		Gross Unrealized Losses		Fair Value
	(In thousands)
September 30, 2017
U.S. government and agency securities		68	$	353	$	27,694		6	$	28	$	874
States, municipalities and political subdivisions		104		902		98,619		18		174		16,142
Special revenue		155		162		38,331		14		65		2,244
Industrial and miscellaneous		200		339		40,090		51		78		4,841
Redeemable preferred stocks		20		21		2,416		5		4		61
Total fixed maturities		547		1,777		207,150		94		349		24,162
Nonredeemable preferred stocks		123		78		7,847		17		8		208
Equity securities		32		296		1,913		74		2,452		5,564
Total equity securities		155		374		9,760		91		2,460		5,772
Total Investments		702	$	2,151	$	216,910		185	$	2,809	$	29,934

	Less Than Twelve Months						Twelve Months or More
	Number of Securities		Gross Unrealized Losses		Fair Value		Number of Securities		Gross Unrealized Losses		Fair Value
	(In thousands)
December 31, 2016
U.S. government and agency securities		35	$	448	$	24,649		2	$	1	$	200
States, municipalities and political subdivisions		265		4,869		220,034		2		3		1,497
Special revenue		161		571		56,996		2		6		974
Industrial and miscellaneous		189		631		44,712		11		129		1,828
Redeemable preferred stocks		19		143		2,425		1		6		212
Total fixed maturities		669		6,662		348,816		18		145		4,711
Nonredeemable preferred stocks		77		439		11,298		5		20		234
Equity securities		26		191		2,542		29		2,805		7,317
Total equity securities		103		630		13,840		34		2,825		7,551
Total Investments		772	$	7,292	$	362,656		52	$	2,970	$	12,262