Investments

At March 31, 2017, investments and restricted investments classified as available-for-sale securities were as follows:



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Investments:
Corporate debt securities	$	128,200	$	6,005	$	1,420	$	132,785
Preferred stock	40,525		876		335		41,066
Common stock	1,662		110		—		1,772
	170,387		6,991		1,755		175,623
Restricted investments:
Short-term bond	4,235		4		—		4,239
Money market fund	209		—		—		209
	4,444		4		—		4,448
	$	174,831	$	6,995	$	1,755	$	180,071

At December 31, 2016, investments and restricted investments classified as available-for-sale securities were as follows:



	Amortized Cost		Gross Unrealized Gain		Gross Unrealized Loss		Fair Value
Investments:
Corporate debt securities	$	135,590	$	5,311	$	1,769	$	139,132
Preferred stock	36,048		656		111		36,593
	171,638		5,967		1,880		175,725
Restricted investments:
Short-term bond	4,232		—		6		4,226
Money market fund	1,410		—		—		1,410
	5,642		—		6		5,636
	$	177,280	$	5,967	$	1,886	$	181,361

Mr. Bruce R. Berkowitz is the Chairman of the Company’s Board of Directors. He is the Manager of, and controls entities that own and control, Fairholme Holdings, LLC, which wholly owns Fairholme Capital Management, L.L.C. (“FCM”, a registered investment advisor registered with the Securities and Exchange Commission) and the Fairholme Trust Company, L.L.C. (“FTC”, a non-depository trust company regulated by the Florida Office of Financial Regulation). Mr. Berkowitz is the Chief Investment Officer of FCM, and the Chief Executive Officer and a director of FTC. Since April 2013, FCM has provided investment advisory services to the Company directly, or more recently, as the sub-advisor to FTC. Neither FCM nor FTC receives any compensation for services as the Company’s investment advisor. As of March 31, 2017, clients of FCM and FTC beneficially owned approximately 33.75% of the Company’s common stock. FCM and its client the Fairholme Fund, a Series of the Fairholme Funds, Inc., are affiliates of the Company.

Both Mr. Cesar Alvarez and Mr. Howard Frank are members of the Company’s Board of Directors and also serve as directors of the Fairholme Funds, Inc. Mr. Alvarez is also a director of FTC.

Pursuant to the terms of the Investment Management Agreement, as amended (the “Agreement”), FTC agreed to supervise and direct the investments of investment accounts established by the Company in accordance with the investment guidelines and restrictions approved by the Investment Committee of the Company’s Board of Directors. The investment guidelines are set forth in the Agreement and require that, as of the date of any investment: (i) no more than 15% of the investment account may be invested in securities of any one issuer (excluding the U.S. Government), (ii) any investment in any one issuer (excluding the U.S. Government) that exceeds 10%, but not 15%, requires the consent of at least two members of the Investment Committee, (iii) 25% of the investment account must be held in cash or cash equivalents, (iv) the investment account is permitted to be invested in common equity securities; however, common stock investments shall be limited to exchange-traded common equities, shall not exceed 5% ownership of a single issuer and, cumulatively, the common stock held in the Company’s investment portfolio shall not exceed $100.0 million market value, and (v) the aggregate market value of investments in common stock, preferred stock or other equity investments cannot exceed 25% of the market value of the Company’s investment portfolio at the time of purchase.

As of March 31, 2017, the investment account included $132.8 million of corporate debt securities, $41.0 million of preferred stock and $1.8 million of common stock investments. Of the $132.8 million corporate debt securities and $41.0 million preferred stock $8.5 million and $0.1 million, respectively, were issued by Sears Holdings Corp or affiliates, of which Messrs. Berkowitz and Alvarez are on the board of directors, and may be deemed an affiliate of FCM, or the Company.

During the three months ended March 31, 2017, realized gain from the sale of available for-sale securities were $3.1 million and proceeds from the sale of available-for-sale securities were $57.1 million.

During the three months ended March 31, 2016, there was no realized gain or loss from the sale or maturity of available for-sale securities and proceeds from the sale of available-for-sale securities were $8.5 million.

The following table provides the debt securities, preferred stock and restricted investments unrealized loss position and related fair values:



	As of March 31, 2017								As of December 31, 2016
	Less Than 12 Months				12 Months or Greater				Less Than 12 Months				12 Months or Greater
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
Investments:
Corporate debt securities	$	45,034	$	480	$	8,462	$	940	$	64,516	$	1,410	$	6,971	$	359
Preferred stock	7,447		272		132		63		—		—		153		111
Restricted investments:
Short-term bond	—		—		—		—		4,226		6		—		—
	$	52,481	$	752	$	8,594	$	1,003	$	68,742	$	1,416	$	7,124	$	470

As of March 31, 2017, the Company had an unrealized loss of $1.8 million related to corporate debt securities and preferred stock. The Company had an unrealized loss of $1.9 million as of December 31, 2016 related to corporate debt securities, preferred stock and restricted investments. As of March 31, 2017 and December 31, 2016, the Company did not intend to sell the investments with a material unrealized loss and it is more likely than not that the Company will not be required to sell any of these securities prior to their anticipated recovery, which could be maturity. As of March 31, 2017, the Company determined that an unrealized loss related to its corporate debt securities and preferred stock was other-than-temporarily impaired and recorded an impairment of $0.4 million for credit-related loss in investment income, net in the Company's condensed consolidated statements of income.

The net carrying value and estimated fair value of investments and restricted investments classified as available-for-sale at March 31, 2017, by contractual maturity are shown in the following table. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations.



	Amortized Cost		Fair Value
Due in one year or less	$	3,932	$	3,470
Due after one year through five years	124,177		129,266
Due after ten years through fifteen years	91		49
	128,200		132,785
Preferred stock	40,525		41,066
Common stock	1,662		1,772
Restricted investments	4,444		4,448
	$	174,831	$	180,071