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Investments (Tables)
9 Months Ended
Sep. 30, 2018
Investments Available For Sale Debt Securities [Abstract]  
Cost or Amortized Cost and Fair Value of Debt and Short-term Investment Securities Available for Sale

The following table provides the amortized cost and fair value of debt and short-term investment securities available for sale as of the dates presented (in thousands):

 

 

September 30, 2018

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government obligations and agencies

$

67,442

 

 

$

15

 

 

$

(1,459

)

 

$

65,998

 

Corporate bonds

 

415,600

 

 

 

532

 

 

 

(6,165

)

 

 

409,967

 

Mortgage-backed and asset-backed securities

 

275,128

 

 

 

23

 

 

 

(5,923

)

 

 

269,228

 

Municipal bonds

 

3,401

 

 

 

 

 

 

(123

)

 

 

3,278

 

Redeemable preferred stock

 

11,922

 

 

 

206

 

 

 

(191

)

 

 

11,937

 

Total

$

773,493

 

 

$

776

 

 

$

(13,861

)

 

$

760,408

 

 

 

 

December 31, 2017

 

 

 

 

 

 

Gross

 

 

Gross

 

 

 

 

 

 

Amortized

 

 

Unrealized

 

 

Unrealized

 

 

 

 

 

 

Cost

 

 

Gains

 

 

Losses

 

 

Fair Value

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government obligations and agencies

$

60,481

 

 

$

 

 

$

(877

)

 

$

59,604

 

Corporate bonds

 

228,336

 

 

 

476

 

 

 

(1,308

)

 

 

227,504

 

Mortgage-backed and asset-backed securities

 

221,956

 

 

 

19

 

 

 

(2,523

)

 

 

219,452

 

Municipal bonds

 

120,883

 

 

 

599

 

 

 

(1,187

)

 

 

120,295

 

Redeemable preferred stock

 

12,059

 

 

 

485

 

 

 

(65

)

 

 

12,479

 

Short-term investments

 

10,000

 

 

 

 

 

 

 

 

 

10,000

 

Total

$

653,715

 

 

$

1,579

 

 

$

(5,960

)

 

$

649,334

 

 

Schedule of Credit Quality of Available-for-sale Debt Securities With Contractual Maturities

The following table provides the credit quality of available-for-sale debt securities with contractual maturities as of the dates presented (dollars in thousands):

 

 

 

September 30, 2018

 

 

December 31, 2017 (1)

 

 

 

 

 

 

 

% of Total

 

 

 

 

 

 

% of Total

 

Average Credit Ratings

 

Fair Value

 

 

Fair Value

 

 

Fair Value

 

 

Fair Value

 

AAA

 

$

344,801

 

 

 

45.3

%

 

$

317,313

 

 

 

48.9

%

AA

 

 

92,411

 

 

 

12.2

%

 

 

129,573

 

 

 

20.0

%

A

 

 

216,074

 

 

 

28.4

%

 

 

146,749

 

 

 

22.6

%

BBB

 

 

103,427

 

 

 

13.6

%

 

 

51,020

 

 

 

7.8

%

BB+ and Below

 

 

117

 

 

 

0.0

%

 

 

1,569

 

 

 

0.2

%

No Rating Available

 

 

3,578

 

 

 

0.5

%

 

 

3,110

 

 

 

0.5

%

Total

 

$

760,408

 

 

 

100.0

%

 

$

649,334

 

 

 

100.0

%

 

 

(1)

The credit ratings in the table above have been reclassified from the prior periods’ consolidated financial statements to conform to the current periods’ presentation.

Schedule of Amortized Cost and Fair Value on Mortgage-Backed and Asset-Backed Securities

The following table summarizes the amortized cost and fair value of mortgage-backed and asset-backed securities as of the dates presented (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2018

 

 

December 31, 2017

 

 

 

Amortized

 

 

 

 

 

 

Amortized

 

 

 

 

 

 

 

Cost

 

 

Fair Value

 

 

Cost

 

 

Fair Value

 

Mortgage-backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Agency

 

$

152,068

 

 

$

148,472

 

 

$

118,014

 

 

$

116,014

 

Non-agency

 

 

44,509

 

 

 

44,005

 

 

 

17,676

 

 

 

17,488

 

Asset-backed Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto loan receivables

 

 

28,983

 

 

 

28,649

 

 

 

35,105

 

 

 

34,962

 

Credit card receivables

 

 

23,836

 

 

 

23,665

 

 

 

38,844

 

 

 

38,719

 

Other receivables

 

 

25,732

 

 

 

24,437

 

 

 

12,317

 

 

 

12,269

 

Total

 

$

275,128

 

 

$

269,228

 

 

$

221,956

 

 

$

219,452

 

 

Summarized Fair Value and Gross Unrealized Losses on Available-for-sale Debt Securities

The following table summarizes the fair value and gross unrealized losses on available-for-sale debt securities, aggregated by major investment category and length of time that individual securities have been in a continuous unrealized loss position as of the dates presented (dollars in thousands):

 

 

September 30, 2018

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Number of

 

 

 

 

 

 

Unrealized

 

 

Number of

 

 

 

 

 

 

Unrealized

 

 

Issues

 

 

Fair Value

 

 

Losses

 

 

Issues

 

 

Fair Value

 

 

Losses

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government obligations and agencies

 

5

 

 

$

15,734

 

 

$

(313

)

 

 

11

 

 

$

40,389

 

 

$

(1,146

)

Corporate bonds

 

413

 

 

 

316,750

 

 

 

(4,599

)

 

 

66

 

 

 

51,245

 

 

 

(1,566

)

Mortgage-backed and asset-backed securities

 

86

 

 

 

135,530

 

 

 

(1,643

)

 

 

98

 

 

 

109,884

 

 

 

(4,280

)

Municipal bonds

 

6

 

 

 

3,278

 

 

 

(123

)

 

 

 

 

 

 

 

 

 

Redeemable preferred stock

 

98

 

 

 

4,739

 

 

 

(154

)

 

 

1

 

 

 

408

 

 

 

(37

)

Total

 

608

 

 

$

476,031

 

 

$

(6,832

)

 

 

176

 

 

$

201,926

 

 

$

(7,029

)

 

 

 

December 31, 2017

 

 

Less Than 12 Months

 

 

12 Months or Longer

 

 

Number of

 

 

 

 

 

 

Unrealized

 

 

Number of

 

 

 

 

 

 

Unrealized

 

 

Issues

 

 

Fair Value

 

 

Losses

 

 

Issues

 

 

Fair Value

 

 

Losses

 

Debt Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government obligations and agencies

 

7

 

 

$

35,464

 

 

$

(301

)

 

 

9

 

 

$

24,140

 

 

$

(576

)

Corporate bonds

 

159

 

 

 

142,208

 

 

 

(792

)

 

 

39

 

 

 

29,796

 

 

 

(516

)

Mortgage-backed and asset-backed securities

 

83

 

 

 

137,481

 

 

 

(955

)

 

 

37

 

 

 

70,218

 

 

 

(1,568

)

Municipal bonds

 

36

 

 

 

28,265

 

 

 

(246

)

 

 

30

 

 

 

48,370

 

 

 

(941

)

Redeemable preferred stock

 

21

 

 

 

2,464

 

 

 

(65

)

 

 

 

 

 

 

 

 

 

Total

 

306

 

 

$

345,882

 

 

$

(2,359

)

 

 

115

 

 

$

172,524

 

 

$

(3,601

)

 

Amortized Cost and Fair Value of Investments With Contractual Maturities

 The following table presents the amortized cost and fair value of investments with contractual maturities as of the date presented (in thousands):

 

 

September 30, 2018

 

 

Amortized Cost

 

 

Fair Value

 

Due in one year or less

$

65,340

 

 

$

65,054

 

Due after one year through five years

 

246,639

 

 

 

242,313

 

Due after five years through ten years

 

158,771

 

 

 

156,385

 

Due after ten years

 

15,693

 

 

 

15,491

 

Mortgage-backed and asset-backed securities

 

275,128

 

 

 

269,228

 

Perpetual maturity securities

 

11,922

 

 

 

11,937

 

Total

$

773,493

 

 

$

760,408

 

 

Summary of Available-for-sale Debt Securities and Equity Securities

The following table provides certain information related to available-for-sale debt securities and equity securities during the periods presented (in thousands):

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Proceeds from sales and maturities (fair value):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale debt securities

 

$

32,287

 

 

$

49,762

 

 

$

225,989

 

 

$

100,413

 

Equity securities

 

$

4,158

 

 

$

18,056

 

 

$

8,285

 

 

$

75,027

 

Gross realized gains on sale of securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale debt securities

 

$

1

 

 

$

302

 

 

$

318

 

 

$

330

 

Equity securities

 

$

413

 

 

$

547

 

 

$

714

 

 

$

2,332

 

Gross realized losses on sale of securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale debt securities

 

$

(11

)

 

$

(19

)

 

$

(3,125

)

 

$

(59

)

Equity securities

 

$

 

 

$

(27

)

 

$

 

 

$

(153

)

 

Investment Income (Expense) Comprised Primarily of Interest and Dividends

The following table presents the components of net investment income, comprised primarily of interest and dividends, for the periods presented (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Available-for-sale debt securities

$

4,595

 

 

$

2,977

 

 

$

12,390

 

 

$

8,893

 

Equity securities

 

722

 

 

 

348

 

 

 

2,016

 

 

 

1,068

 

Available-for-sale short-term investments

 

 

 

 

 

 

 

145

 

 

 

22

 

Other (1)

 

2,106

 

 

 

319

 

 

 

4,765

 

 

 

651

 

Total investment income

 

7,423

 

 

 

3,644

 

 

 

19,316

 

 

 

10,634

 

Less: Investment expenses (2)

 

(781

)

 

 

(559

)

 

 

(2,103

)

 

 

(1,622

)

Net investment (expense) income

$

6,642

 

 

$

3,085

 

 

$

17,213

 

 

$

9,012

 

(1)

Includes interest earned on cash and cash equivalents and restricted cash and cash equivalents. Also includes investment income earned on real estate investments.  

(2)

Includes custodial fees, investment accounting, advisory fees and expenses associated with real estate investments.

 

Summary of Details on Realized and Unrealized Gains and Losses Related to Equity Securities

The following table provides details on the realized and unrealized gains and losses related to equity securities for the periods presented (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Net gains and (losses) recognized during the period

     on equity securities

$

(2,060

)

 

$

520

 

 

$

(8,389

)

 

$

2,179

 

Less: Net (gains) and losses recognized during the period on

          equity securities sold during the period

 

(413

)

 

 

(520

)

 

 

(714

)

 

 

(2,179

)

Unrealized gains and (losses) recognized during the reporting

     period on equity securities still held at the reporting period

$

(2,473

)

 

$

 

 

$

(9,103

)

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Schedule of Real Estate Investment

Investment real estate consisted of the following as of the dates presented (in thousands):

 

 

September 30, 2018

 

 

December 31, 2017

 

Income Producing:

 

 

 

 

 

 

 

Investment real estate (1)

$

14,619

 

 

$

6,918

 

Less: Accumulated depreciation

 

(767

)

 

 

(460

)

 

 

13,852

 

 

 

6,458

 

Non-Income Producing:

 

 

 

 

 

 

 

Properties under development (1)

 

9,868

 

 

 

12,016

 

Investment real estate, net

$

23,720

 

 

$

18,474

 

 

(1) During the nine months ended September 30, 2018, the Company transferred $7.4 million from properties under development to investment real estate.

Schedule of Depreciation Expense Related to Investment Real Estate

Depreciation expense related to investment real estate for the periods presented (in thousands):

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Depreciation expense on investment real estate

$

103

 

 

$

45

 

 

$

307

 

 

$

134