INVESTMENTS

Our investment in available-for-sale securities, which are reported at fair value, includes fixed maturity securities and equity securities. Net unrealized gains or losses on equity securities prior to January 1, 2018, and on fixed maturities are reported after-tax as a component of other comprehensive income. As of January 1, 2018, changes in fair value of equity securities are reported in investment gains/losses as a component of net income.

The amortized cost and aggregate fair values of investments in available-for-sale securities as of September 30, 2019 are as follows (dollars in thousands):



Available-for-sale securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government corporations and agencies	$	4,134	$	183	$	—	$	4,317
Agency mortgage backed securities	30,665		1,182		127		31,720
Asset backed securities	10,002		66		101		9,967
Private label mortgage backed securities	7,019		587		—		7,606
Corporate bonds	38,261		1,715		119		39,857
States, municipalities and political subdivisions	7,546		144		—		7,690
Foreign governments	818		61		—		879
Total fixed maturities	98,445		3,938		347		102,036
Equity securities	1,849		2,536		—		4,385
Total	$	100,294	$	6,474	$	347	$	106,421

The amortized cost and aggregate fair values of investments in held-to-maturity securities as of September 30, 2019 are as follows (dollars in thousands):



Held-to-maturity securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Agency mortgage backed securities	$	1,349	$	81	$	—	$	1,430
Total	$	1,349	$	81	$	—	$	1,430

The amortized cost and aggregate fair values of investments in available-for-sale securities as of December 31, 2018 are as follows (dollars in thousands):



Available-for-sale securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
U.S. Government corporations and agencies	$	4,820	$	31	$	107	$	4,744
Agency mortgage backed securities	27,492		159		545		27,106
Asset backed securities	10,901		7		248		10,660
Private label mortgage backed securities	5,869		105		27		5,947
Corporate bonds	36,935		407		1,551		35,791
States, municipalities and political subdivisions	10,059		105		91		10,073
Foreign governments	801		3		—		804
Total fixed maturities	96,877		817		2,569		95,125
Equity securities	1,842		2,464		—		4,306
Total	$	98,719	$	3,281	$	2,569	$	99,431

The amortized cost and aggregate fair values of investments in held-to-maturity securities as of December 31, 2018 are as follows (dollars in thousands):



Held-to-maturity securities:	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Agency mortgage backed securities	$	1,449	$	16	$	22	$	1,443
Total	$	1,449	$	16	$	22	$	1,443

The amortized cost and aggregate fair value of debt securities at September 30, 2019, by contractual maturity, are presented in the following table (dollars in thousands). Expected maturities will differ from contractual maturities because issuers 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	$	2,424	$	2,423
Due after one year through five years	17,437		17,930
Due after five years through ten years	26,308		27,071
Due after ten years	52,276		54,612
Total	$	98,445	$	102,036

Held-to-maturity securities:
Due after one year through five years	$	32	$	34
Due after five years through ten years	4		5
Due after ten years	1,313		1,391
Total	$	1,349	$	1,430

A summary of securities available-for-sale with unrealized losses as of September 30, 2019, 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
September 30, 2019	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
Agency mortgage backed securities	$	3,534	$	71	$	1,921	$	56	$	5,455	$	127	16
Asset backed securities	5,243		89		1,809		12		7,052		101		10
Corporate bonds	6,467		67		2,447		52		8,914		119		16
	$	15,244	$	227	$	6,177	$	120	$	21,421	$	347	42

There were no securities held-to-maturity with unrealized losses as of September 30, 2019.

A summary of securities available-for-sale with unrealized losses as of December 31, 2018, 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, 2018	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
U.S. Government corporations and agencies	$	—	$	—	$	3,209	$	107	$	3,209	$	107	6
Agency mortgage backed securities	5,504		45		10,969		500		16,473		545		38
Asset backed securities	5,824		146		2,741		102		8,565		248		12
Private label mortgage backed securities	1,348		27		—		—		1,348		27		2
Corporate bonds	16,583		709		9,823		842		26,406		1,551		51
States, municipalities and political subdivisions	1,242		10		4,420		81		5,662		91		11
	$	30,501	$	937	$	31,162	$	1,632	$	61,663	$	2,569	120

A summary of securities held-to-maturity with unrealized losses as of December 31, 2018 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, 2018	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Total Securities in a Loss Position
Agency mortgage backed securities	$	1,026	$	22	$	—	$	—	$	1,026	$	22	2
	$	1,026	$	22	$	—	$	—	$	1,026	$	22	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 in the fixed maturity investment portfolio. The Company has no material exposure to sub-prime mortgage loans and approximately 5% of the fixed income investment portfolio is rated below investment grade. 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, other than the impairment described below, the securities in an accumulated loss position in the portfolio were temporary impairments.

For the nine months ended September 30, 2019, the Company realized no other-than-temporary impairments. For the year ended December 31, 2018, the Company realized $16,000 other-than-temporary impairments. At September 30, 2019, the three largest losses not realized as an impairment in the fixed maturity portfolio totaled $40,000, $27,000 and $25,000. Each of these losses were driven by changes in market interest rates. At December 31, 2018, the three largest losses not realized as an impairment was in the fixed maturity portfolio totaled $145,000, $99,000 and $94,000.

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



	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Fixed maturities	$	960	$	989	$	2,831	$	2,843
Equity securities	19		21		66		61
Mortgage loans on real estate	2		2		6		6
Investment real estate	—		1		3		2
Policy loans	37		35		106		105
Other	6		6		13		21
	1,024		1,054		3,025		3,038
Less: Investment expenses	35		37		117		106
Net investment income	$	989	$	1,017	$	2,908	$	2,932

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



	Three months ended September 30,					Nine months ended September 30,
	2019			2018		2019			2018
Realized gains (losses) on fixed maturities	$	(24	)	$	27	$	(9	)	$	156
Gains on trading securities	1			—		9			—
Change in fair value of equity securities	(80		)	426		72			57
Change in surrender value of company owned life insurance	(14		)	3		256			(133		)
Realized gain on company owned life insurance	—			—		1,792			—
Other, principally real estate	—			—		—			(88		)
Net investment gains (losses)	$	(117	)	$	456	$	2,120		$	(8	)

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



	September 30, 2019			December 31, 2018
Fixed maturities	$	5,343		$	(3,042	)
Deferred income tax	(1,122		)	638
Change in net unrealized gains (losses) on available-for-sale securities	$	4,221		$	(2,404	)