INVESTMENTS

The amortized cost and aggregate fair values of investments in securities are as follows (dollars in thousands):



December 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities:
Corporate debt securities	$	19,907	$	1,340	$	267	$	20,980
Trust preferred securities	537		—		58		479
Mortgage backed securities	7,587		307		23		7,871
Private label mortgage backed securities	9,716		199		62		9,853
Obligations of states and political subdivisions	18,355		1,142		15		19,482
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	13,878		534		3		14,409
Total fixed maturities	69,980		3,522		428		73,074
Equity securities	4,931		4,206		590		8,547
Total	$	74,911	$	7,728	$	1,018	$	81,621
Held-to-maturity securities:
Mortgage backed securities	$	2,026	$	125	$	—	$	2,151
Private label mortgage backed securities	55		1		—		56
Obligations of states and political subdivisions	996		50		—		1,046
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	226		18		—		244
Total	$	3,303	$	194	$	—	$	3,497



December 31, 2010	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Available-for-sale securities:
Corporate debt securities	$	21,869	$	1,663	$	119	$	23,413
Trust preferred securities	536		3		—		539
Mortgage backed securities	7,053		326		104		7,275
Private label mortgage backed securities	13,313		200		407		13,106
Obligations of states and political subdivisions	18,902		252		739		18,415
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	15,446		446		172		15,720
Total fixed maturities	77,119		2,890		1,541		78,468
Equity securities	5,478		4,014		445		9,047
Total	$	82,597	$	6,904	$	1,986	$	87,515
Held-to-maturity securities:
Mortgage backed securities	$	2,669	$	126	$	1	$	2,794
Private label mortgage backed securities	118		4		—		122
Obligations of states and political subdivisions	1,837		48		12		1,873
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	335		20		—		355
Total	$	4,959	$	198	$	13	$	5,144

The amortized cost and aggregate fair value of debt securities at December 31, 2011, by contractual maturity, are as follows (dollars in thousands):



	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	599	$	614
Due after one year through five years	10,637		11,413
Due after five years through ten years	20,767		22,098
Due after ten years	37,977		38,949
Total	$	69,980	$	73,074
Held-to-maturity securities:
Due in one year or less	$	300	$	303
Due after one year through five years	516		549
Due after five years through ten years	634		675
Due after ten years	1,853		1,970
Total	$	3,303	$	3,497

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.

A summary of securities available-for-sale with unrealized losses as of December 31, 2011 and 2010 along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows (dollars in thousands):



	Less than 12 months				12 months or longer				Total
December 31, 2011	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
Fixed maturities
Corporate debt securities	$	4,703	$	166	$	899	$	101	$	5,602	$	267	15
Trust preferred securities	479		58		—		—		479		58		1
Mortgage backed securities	883		21		198		2		1,081		23		3
Private label mortgage backed securities	1,860		15		1,094		47		2,954		62		9
Obligations of state and political subdivisions	—		—		1,803		15		1,803		15		5
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	260		3		—		—		260		3		1
Equity securities	391		49		802		541		1,193		590		6
	$	8,576	$	312	$	4,796	$	706	$	13,372	$	1,018	40



	Less than 12 months				12 months or longer				Total
December 31, 2010	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
Fixed maturities:
Corporate debt securities	$	4,504	$	112	$	250	$	7	$	4,754	$	119	11
Mortgage backed securities	1,909		104		—		—		1,909		104		8
Private label mortgage backed securities	2,463		46		3,591		361		6,054		407		12
Obligations of state and political subdivisions	8,216		612		1,304		127		9,520		739		34
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	4,020		172		—		—		4,020		172		9
Equity securities	264		10		903		435		1,167		445		3
	$	21,376	$	1,056	$	6,048	$	930	$	27,424	$	1,986	77

There were no securities held-to-maturity with unrealized losses as of December 31, 2011. A summary of securities held-to-maturity with unrealized losses as of December 31, 2010 along with the related fair value, aggregated by the length of time that investments have been in a continuous unrealized loss position, is as follows (dollars in thousands):



	Less than 12 months				12 months or longer				Total
December 31, 2010	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
Fixed maturities:
Mortgage backed securities	$	331	$	1	$	—	$	—	$	331	$	1	$	1
Obligations of state and political subdivisions	161		12		—		—		161		12		1
	$	492	$	13	$	—	$	—	$	492	$	13	2

The Company conducts periodic reviews to identify and evaluate securities in an unrealized loss position in order to identify other-than-temporary-impairments. For securities in an unrealized loss position, the Company assesses whether the Company has the intent to sell the security or more likely than not will be required to sell the security before the anticipated recovery. If either of these conditions is met, the Company is required to recognize an other-than-temporary impairment with the entire unrealized loss reported in earnings. For securities in an unrealized loss position that do not meet these conditions, the Company assesses whether the impairment of a security is other-than-temporary. If the impairment is determined to be other-than-temporary, the Company is required to separate the other-than-temporary impairments into two components: the amount representing the credit loss and the amount related to all other factors. The credit loss is the portion of the amortized book value in excess of the net present value of the projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. The credit loss component of other-than-temporary impairments is reported in earnings, whereas the amount relating to factors other than credit losses are recorded in other comprehensive income, net of taxes.

Management has evaluated each security in a significant unrealized loss position. For the year ended December 31, 2011, the Company realized $398,000 in other-than-temporary impairments. No impairments were recognized during 2010. Most of the remaining unrealized losses in the fixed income portfolio, for which no impairment has been realized, are interest rate driven as opposed to credit quality driven and management believes no ultimate loss will be realized. The Company has no material exposure to sub-prime mortgage loans and less than 4% of the fixed income investment portfolio is rated below investment grade. In evaluating whether or not the equity loss positions were other-than-temporary impairments, Management evaluated financial information on each company and where available reviewed analyst reports from at least two independent sources. Based on a review of the available financial information, the prospect for future earnings of each company and consideration of the Company’s intent and ability to hold the securities until market values recovered, it was determined that the remaining securities in an accumulated loss position in the portfolio were temporary impairments.

Of the remaining securities in an unrealized loss position, the single largest accumulated loss was in the equity portfolio and totaled $501,000. The second largest loss position was in the bond portfolio and totaled $70,000. The third largest loss position was in the bond portfolio and totaled $58,000. For the year ended December 31, 2010, the Company realized no other-than-temporary impairments. The single largest accumulated loss was in the equity portfolio and totaled $360,000. The second largest loss position was in the bond portfolio and totaled $185,000. The third largest loss position was in the equity portfolio and totaled $83,000.

Major categories of investment income are summarized as follows (dollars in thousands):



	Year ended December 31,
	2011		2010
Fixed maturities	$	3,656	$	4,242
Equity securities	234		226
Mortgage loans on real estate	13		54
Investment real estate	67		65
Policy loans	89		79
Company owned life insurance	140		323
Other, principally short-term investments	272		288
	4,471		5,277
Less: Investment expenses	210		188
Net investment income	$	4,261	$	5,089

Major categories of investment gains and losses are summarized as follows (dollars in thousands):



	Year ended December 31,
	2011			2010
Fixed maturities	$	896		$	1,059
Equity securities	175			710
Trading securities	(39		)	108
Other, principally real estate	35			2
Other-than-temporary impairments	(398		)	—
	$	669		$	1,879

An analysis of the net change in unrealized appreciation on available-for-sale securities follows (dollars in thousands):



	Year ended December 31,
	2011			2010
Net change in unrealized appreciation on available-for-sale securities before deferred tax	$	1,792		$	1,261
Deferred income tax	(534		)	(414		)
Net change in unrealized appreciation on available-for-sale securities	$	1,258		$	847