(2) Investments:

The following is a summary of available-for-sale securities at September 30, 2014 and December 31, 2013:

										Net
			Cost or		Gross		Gross			Unrealized
	Fair		Amortized		Unrealized		Unrealized			Gains
	Value		Cost		Gains		Losses			(Losses)
Septmeber 30, 2014
Fixed maturities
U.S. government obligations	$	123,933	$	123,859	$	125	$	(51	)	$	74
Residential mortgage-backed securities		7,349		7,084		322		(57	)		265
Commercial mortgage-backed securities		35,694		35,132		737		(175	)		562
States and municipal obligations		105,382		104,534		882		(34	)		848
Corporate securities		129,497		130,186		2,185		(2,874	)		(689	)
Foreign government obligations		29,946		30,372		185		(611	)		(426	)
Total fixed maturities		431,801		431,167		4,436		(3,802	)		634
Equity securities:
Financial institutions		20,594		9,520		11,096		(22	)		11,074
Industrial & miscellaneous		139,676		67,077		73,467		(868	)		72,599
Total equity securities		160,270		76,597		84,563		(890	)		83,673
Total	$	592,071	$	507,764	$	88,999	$	(4,692	)		84,307

							Applicable federal income taxes				(29,508	)

							Net unrealized gains - net of tax			$	54,799

December 31, 2013
Fixed maturities
U.S. government obligations	$	113,389	$	113,348	$	81	$	(40	)	$	41
Residential mortgage-backed securities		13,252		12,058		1,334		(140	)		1,194
Commercial mortgage-backed securities		28,565		28,406		308		(149	)		159
State and municipal obligations		115,250		115,278		407		(435	)		(28	)
Corporate securities		137,215		136,991		3,207		(2,983	)		224
Foreign government obligations		23,879		23,689		588		(398	)		190
Total fixed maturities		431,550		429,770		5,925		(4,145	)		1,780
Equity securities:
Financial institutions		18,850		7,780		11,171		(101	)		11,070
Industrial & miscellaneous		126,978		64,307		63,009		(338	)		62,671
Total equity securities		145,828		72,087		74,180		(439	)		73,741
Total	$	577,378	$	501,857	$	80,105	$	(4,584	)		75,521

							Applicable federal income taxes				(26,432	)

							Net unrealized gains - net of tax			$	49,089

The following table summarizes, for fixed maturity and equity security investments in an unrealized loss position at September 30, 2014 and December 31, 2013, respectively, the aggregate fair value and gross unrealized loss categorized by the duration those securities have been continuously in an unrealized loss position.

	September 30, 2014							December 31, 2013
	Number of Securities		Fair Value		Gross Unrealized Loss			Number of Securities		Fair Value		Gross Unrealized Loss
Fixed maturity securities:
12 months or less		353	$	90,946	$	(2,127	)		451	$	123,145	$	(3,105	)
Greater than 12 months		131		44,616		(1,675	)		53		18,249		(1,040	)
Total fixed maturities		484		135,562		(3,802	)		504		141,394		(4,145	)

Equity securities:
12 months or less		30		9,248		(806	)		10		1,682		(204	)
Greater than 12 months		5		1,516		(84	)		2		1,980		(235	)
Total equity securities		35		10,764		(890	)		12		3,662		(439	)
Total fixed maturity and equity securities		519	$	146,326	$	(4,692	)		516	$	145,056	$	(4,584	)

The fair value and the cost or amortized costs of fixed maturity investments at September 30, 2014, by contractual maturity, are shown below. Actual maturities may ultimately differ from contractual maturities because borrowers have, in some cases, the right to call or prepay obligations with or without call or prepayment penalties. Pre-refunded municipal bonds are classified based on their pre-refunded call dates.

	Fair Value		Cost or Amortized Cost

One year or less	$	145,547	$	145,511
Excess of one year to five years		154,266		155,127
Excess of five years to ten years		46,520		46,078
Excess of ten years		8,987		8,340
Contractual maturities		355,320		355,056
Asset-backed securities		76,481		76,111
Total	$	431,801	$	431,167

Following is a summary of the components of net realized gains on investments for the periods presented in the accompanying consolidated statements of operations.

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2014			2013			2014			2013
Fixed maturities:
Gross gains	$	798		$	2,043		$	5,399		$	5,695
Gross losses		(1,259	)		(1,277	)		(3,411	)		(3,497	)
Net realized gains (losses)		(461	)		766			1,988			2,198

Equity securities:
Gross gains		2,529			1,233			4,682			13,838
Gross losses		(346	)		(358	)		(1,057	)		(1,767	)
Net realized gains		2,183			875			3,625			12,071

Limited partnerships - net gain (loss)		(1,064	)		(211	)		7,204			2,227


Totals	$	658		$	1,430		$	12,817		$	16,496

Net realized gains activity for investments, as shown in the previous table, are further detailed as follows:

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2014			2013			2014			2013

Realized net gains on the disposal of securities	$	2,223		$	1,090		$	5,837		$	11,888
Mark-to-market adjustment		(118	)		342			151			747
Equity in gains (losses) of limited partnership
investments - realized and unrealized		(1,064	)		(211	)		7,204			2,227
Impairment:
Write-downs based upon objective criteria		(441	)		(4	)		(546	)		(78	)
Recovery of prior write-downs
upon sale or disposal		58			213			171			1,712

Totals	$	658		$	1,430		$	12,817		$	16,496

The mark-to-market adjustments in the table above represent the changes in fair value of (1) options embedded in convertible debt securities and (2) insurance-linked securities held by the Company.

The income from limited partnerships for the quarter and year-to-date periods ending September 30, 2014 includes an estimated $334 and $5,841 of net unrealized gains respectively, reported to the Company as part of the underlying assets of the various limited partnerships. The value of limited partnerships at September 30, 2014 includes approximately $13,305 of accumulated net unrealized gains reported to the Company as part of the underlying assets of the various limited partnerships. Shareholders’ equity at September 30, 2014 includes approximately $28,923, net of federal income taxes, of reported earnings which remain undistributed by limited partnerships.

As of September 30, 2014, the Company had committed funds totaling $18,750 to two separate borrowers related to three bridge loan agreements. The Company retains possession of these funds which will only be loaned in the unlikely event that long-term financing is unavailable to the counter party in the market.