3. Investments

Securities Available for Sale

The following table provides the cost or amortized cost and fair value of securities available for sale as of the dates presented (in thousands):

	March 31, 2015
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Fixed Maturities:
U.S. government obligations and agencies	$	105,290	$	77	$	(175	)	$	105,192
Corporate bonds		123,944		744		(114	)		124,574
Mortgage-backed and asset-backed securities		109,529		521		(279	)		109,771
Redeemable preferred stock		8,056		320		(1	)		8,375
Equity Securities:
Common stock		2,215		—		(226	)		1,989
Mutual funds		21,318		31		(1,942	)		19,407
Short-term investments		37,500		6		—			37,506
Total	$	407,852	$	1,699	$	(2,737	)	$	406,814

	December 31, 2014
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Fixed Maturities:
U.S. government obligations and agencies	$	120,627	$	38	$	(627	)	$	120,038
Corporate bonds		120,025		171		(364	)		119,832
Mortgage-backed and asset-backed securities		107,589		136		(502	)		107,223
Redeemable preferred stock		6,700		165		(9	)		6,856
Equity Securities:
Common stock		331		4		(65	)		270
Mutual funds		21,296		—		(1,924	)		19,372
Short-term investments		50,000		—		(10	)		49,990
Total	$	426,568	$	514	$	(3,501	)	$	423,581

The following table provides the credit quality of investments with contractual maturities as of the dates presented (in thousands):

March 31, 2015
Standard and Poor's			% of Total
Rating Services	Fair Value		Fair Value
AAA	$	31,671		8.2	%
AA		186,057		48.4	%
A		82,613		21.4	%
BBB		45,137		11.7	%
BB+ and Below (1)		3,210		0.8	%
No Rating Available (2)		36,730		9.5	%
Total	$	385,418		100.0	%

(1)	As of March 31, 2015, $675 thousand of these investments were rated either “Baa3” or “Baa2” by Moody’s Investors Service, Inc.

(2)	As of March 31, 2015, $18.9 million of these investments were rated either “Aaa” or “Aa3” by Moody’s Investors Service, Inc.

December 31, 2014
Standard and Poor's			% of Total
Rating Services	Fair Value		Fair Value
AAA	$	31,783		7.9	%
AA		207,953		51.5	%
A		79,675		19.7	%
BBB		45,781		11.3	%
BB+ and Below		2,677		0.7	%
No Rating Available		36,070		8.9	%
Total	$	403,939		100.0	%

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

	March 31, 2015				December 31, 2014
	Cost or				Cost or
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
Mortgage-backed securities:
Agency	$	66,366	$	66,526	$	64,905	$	64,619
Non-agency		9,833		9,849		8,053		7,987
Asset-backed securities:
Auto loan receivables		15,247		15,307		16,551		16,556
Credit card receivables		13,483		13,472		13,481		13,457
Other receivables		4,600		4,617		4,599		4,604
Total	$	109,529	$	109,771	$	107,589	$	107,223

The following table summarizes the fair value and gross unrealized losses on securities available for sale, 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 (in thousands):

	March 31, 2015
	Less Than 12 Months							12 Months or Longer
	Number of				Unrealized			Number of				Unrealized
	Issues		Fair Value		Losses			Issues		Fair Value		Losses
Fixed maturities:
U.S. government obligations and agencies		3	$	24,001	$	(33	)		2	$	3,507	$	(143	)
Corporate bonds		13		14,351		(97	)		3		3,397		(17	)
Mortgage-backed and asset-backed securities		10		23,408		(63	)		5		15,395		(216	)
Redeemable preferred stock		5		569		(1	)		—		—		—
Equity securities:
Common stock		3		1,911		(166	)		2		78		(60	)
Mutual funds		1		525		(56	)		1		8,801		(1,885	)
Total		35	$	64,765	$	(416	)		13	$	31,178	$	(2,321	)

	December 31, 2014
	Less Than 12 Months							12 Months or Longer
	Number of				Unrealized			Number of				Unrealized
	Issues		Fair Value		Losses			Issues		Fair Value		Losses
Fixed maturities:
U.S. government obligations and agencies		3	$	27,341	$	(55	)		4	$	34,050	$	(572	)
Corporate bonds		67		58,271		(238	)		12		15,105		(126	)
Mortgage-backed and asset-backed securities		20		48,335		(273	)		5		16,842		(229	)
Redeemable preferred stock		12		1,153		(9	)		—		—		—
Equity securities:
Common stock		2		87		(20	)		2		117		(45	)
Mutual funds		2		10,514		(97	)		1		8,859		(1,827	)
Short-term investments		2		37,490		(10	)		—		—		—
Total		108	$	183,191	$	(702	)		24	$	74,973	$	(2,799	)

At March 31, 2015, we held fixed maturity and equity securities that were in an unrealized loss position as presented in the table above. For fixed maturity securities with significant declines in value, we perform quarterly fundamental credit analysis on a security-by-security basis, which includes consideration of credit quality and credit ratings, review of relevant industry analyst reports and other available market data. For fixed maturity and equity securities, the Company considers whether it has the intent and ability to hold the securities for a period of time sufficient to recover its cost basis. Where the Company lacks the intent and ability to hold to recovery, or believes the recovery period is extended, the security’s decline in fair value is considered other than temporary and is recorded in earnings. Based upon management’s intent and ability to hold the securities until recovery and its credit analysis of the individual issuers of the securities, management has no reason to believe the unrealized losses for securities available for sale at March 31, 2015 are other than temporary.

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

	March 31, 2015
	Cost or
	Amortized Cost		Fair Value
Due in one year or less	$	80,687	$	80,697
Due after one year through five years		183,707		184,223
Due after five years through ten years		1,347		1,368
Due after ten years		3,732		3,889
Mortgage-backed and asset-backed securities		109,528		109,771
Perpetual maturity securities		5,318		5,470
Total	$	384,319	$	385,418

Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay with or without penalty.

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

	Three Months Ended
	March 31,
	2015			2014
Sales proceeds (fair value)	$	40,595		$	14,441
Gross realized gains	$	186		$	999
Gross realized losses	$	(15	)	$	(97	)
Other than temporary losses	$	—		$	—

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
	March 31,
	2015			2014
Fixed maturities		1,184			728
Equity securities		57			302
Short-term investments		38			—
Other (1)		66			12
Total investment income		1,345			1,042
Less: Investment expenses (2)		(483	)		(524	)
Net investment (expense) income	$	862		$	518

(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 investment expenses related to cash and cash equivalents, restricted cash and cash equivalents and real estate investments.