INVESTMENTS

The amortized cost and aggregate fair values of investments in available-for-sale securities as of March 31, 2014 are as follows (dollars in thousands):



Available-for-sale securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate debt securities	$	35,794	$	1,980	$	289	$	37,485
Trust preferred securities	538		48		—		586
Mortgage backed securities	8,546		90		388		8,248
Private label mortgage backed securities	1,921		43		7		1,957
Obligations of states and political subdivisions	15,209		664		95		15,778
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	17,444		284		460		17,268
Total fixed maturities	79,452		3,109		1,239		81,322
Equity securities	2,420		2,452		382		4,490
Total	$	81,872	$	5,561	$	1,621	$	85,812

The amortized cost and aggregate fair values of investments in held-to-maturity securities as of March 31, 2014 are as follows (dollars in thousands):



Held-to-maturity securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Mortgage backed securities	$	676	$	43	$	—	$	719
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	96		6		—		102
Total	$	772	$	49	$	—	$	821

The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2013 are as follows (dollars in thousands):



Available-for-sale securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Corporate debt securities	$	35,831	$	1,698	$	713	$	36,816
Trust preferred securities	538		33		—		571
Mortgage backed securities	7,622		75		557		7,140
Private label mortgage backed securities	2,152		38		4		2,186
Obligations of states and political subdivisions	16,412		524		195		16,741
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	16,519		169		708		15,980
Total fixed maturities	79,074		2,537		2,177		79,434
Equity securities	2,420		2,365		411		4,374
Total	$	81,494	$	4,902	$	2,588	$	83,808

The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2013 are as follows (dollars in thousands):



Held-to-maturity securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Mortgage backed securities	$	706	$	34	$	—	$	740
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	106		7		—		113
Total	$	812	$	41	$	—	$	853

The amortized cost and aggregate fair value of debt securities at March 31, 2014, by contractual maturity, are presented in the following table (dollars in thousands). 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.



	(Dollars in Thousands)
	Amortized Cost		Fair Value
Available-for-sale securities:
Due in one year or less	$	1,782	$	1,821
Due after one year through five years	15,258		16,462
Due after five years through ten years	27,505		28,023
Due after ten years	34,907		35,016
Total	$	79,452	$	81,322

Held-to-maturity securities:
Due in one year or less	$	—	$	—
Due after one year through five years	225		237
Due after five years through ten years	165		177
Due after ten years	382		407
Total	$	772	$	821

A summary of securities available-for-sale with unrealized losses as of March 31, 2014, 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
March 31, 2014	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	$	5,215	$	181	$	2,881	$	108	$	8,096	$	289	17
Mortgage backed securities	2,785		211		2,471		177		5,256		388		18
Private label mortgage backed securities	462		7		—		—		462		7		3
Obligations of state and political subdivisions	1,113		40		887		55		2,000		95		5
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	9,027		317		1,060		143		10,087		460		18
Equity securities	—		—		904		382		904		382		1
	$	18,602	$	756	$	8,203	$	865	$	26,805	$	1,621	62

A summary of securities available-for-sale with unrealized losses as of December 31, 2013, 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, 2013	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	$	10,589	$	600	$	1,548	$	113	$	12,137	$	713	26
Mortgage backed securities	3,215		427		1,796		130		5,011		557		18
Private label mortgage backed securities	472		4		—		—		472		4		3
Obligations of state and political subdivisions	3,545		165		325		30		3,870		195		11
U.S. Treasury securities and obligations of U.S. Government corporations and agencies	11,534		600		390		108		11,924		708		21
Equity securities	—		—		875		411		875		411		1
	$	29,355	$	1,796	$	4,934	$	792	$	34,289	$	2,588	80

There were no securities held-to-maturity with unrealized losses as of March 31, 2014 and December 31, 2013.

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. The Company has no material exposure to sub-prime mortgage loans and less than 2.9% 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 securities in an accumulated loss position in the portfolio were temporary impairments.

For the three months ended March 31, 2014 and 2013, the Company realized no additional other-than-temporary impairments.

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



	Three months ended March 31,
	2014		2013
Fixed maturities	$	859	$	825
Equity securities	29		28
Mortgage loans on real estate	4		7
Investment real estate	2		40
Policy loans	27		24
Company owned life insurance change in surrender value	30		50
Other, principally short-term investments	54		119
	1,005		1,093
Less: Investment expenses	57		48
Net investment income	$	948	$	1,045

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



	Three months ended March 31,
	2014			2013
Fixed maturities	$	90		$	23
Equity securities	—			—
Trading securities	—			—
Other, principally real estate	(2		)	4
Other-than-temporary impairments	—			—
Net realized investment gains	$	88		$	27

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



	March 31, 2014			December 31, 2013
Net change in unrealized appreciation on available-for-sale securities before deferred tax	$	1,626		$	(4,243	)
Deferred income tax	(553		)	1,442
Net change in unrealized appreciation on available-for-sale securities	$	1,073		$	(2,801	)