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, 2016
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Fixed Maturities:
U.S. government obligations and agencies	$	131,110	$	904	$	(91	)	$	131,923
Corporate bonds		157,358		1,410		(445	)		158,323
Mortgage-backed and asset-backed securities		183,108		794		(380	)		183,522
Redeemable preferred stock		9,518		444		(11	)		9,951
Other		5,000		6		—			5,006
Equity Securities:
Common stock		215		—		(96	)		119
Mutual funds		35,340		11		(3,716	)		31,635
Short-term investments		12,504		1		—			12,505
Total	$	534,153	$	3,570	$	(4,739	)	$	532,984

	December 31, 2015
	Cost or		Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
Fixed Maturities:
U.S. government obligations and agencies	$	126,209	$	—	$	(867	)	$	125,342
Corporate bonds		126,421		137		(1,041	)		125,517
Mortgage-backed and asset-backed securities		151,328		97		(1,265	)		150,160
Redeemable preferred stock		9,665		429		(29	)		10,065
Other		5,000		—		(1	)		4,999
Equity Securities:
Common stock		10,991		15		(244	)		10,762
Mutual funds		35,221		5		(3,774	)		31,452
Short-term investments		25,011		10		—			25,021
Total	$	489,846	$	693	$	(7,221	)	$	483,318

The following table provides the credit quality of investment securities with contractual maturities or the issuer of such securities as of the dates presented (in thousands):

	March 31, 2016					December 31, 2015
			% of Total					% of Total
Comparable Ratings	Fair Value		Fair Value			Fair Value		Fair Value
AAA	$	105,619		21.1	%	$	103,097		23.4	%
AA		250,589		50.0	%		189,600		43.0	%
A		67,894		13.5	%		83,850		19.0	%
BBB		72,580		14.5	%		41,408		9.4	%
BB+ and Below		1,537		0.3	%		4,261		1.0	%
No Rating Available		3,011		0.6	%		18,888		4.2	%
Total	$	501,230		100.0	%	$	441,104		100.0	%

The tables above include comparable credit quality ratings by Standard and Poor’s Rating Services, Inc., Moody’s Investors Service, Inc. and Fitch Ratings, Inc.

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, 2016				December 31, 2015
	Cost or				Cost or
	Amortized				Amortized
	Cost		Fair Value		Cost		Fair Value
Mortgage-backed securities:
Agency	$	83,623	$	83,897	$	74,353	$	73,854
Non-agency		17,411		17,383		10,430		10,183
Asset-backed securities:
Auto loan receivables		39,247		39,360		29,883		29,712
Credit card receivables		34,706		34,763		32,225		31,985
Other receivables		8,121		8,119		4,437		4,426
Total	$	183,108	$	183,522	$	151,328	$	150,160

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, 2016
	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		2	$	28,934	$	(26	)		2	$	3,506	$	(64	)
Corporate bonds		28		24,139		(304	)		7		7,826		(145	)
Mortgage-backed and asset-backed securities		17		32,977		(198	)		5		12,486		(118	)
Redeemable preferred stock		5		2,149		(9	)		2		257		(5	)
Other
Equity securities:
Common stock		1		67		(13	)		2		119		(96	)
Mutual funds		5		34,819		(751	)		1		8,436		(3,010	)
Short-term investments		—		—		—			—		—		—
Total		58	$	123,085	$	(1,301	)		19	$	32,630	$	(3,438	)

	December 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		10	$	121,912	$	(690	)		2	$	3,429	$	(177	)
Corporate bonds		101		90,717		(927	)		6		4,789		(114	)
Mortgage-backed and asset-backed securities		51		118,743		(974	)		6		13,902		(291	)
Redeemable preferred stock		5		764		(29	)		—		—		—
Other		1		4,999		(1	)		—		—
Equity securities:
Common stock		3		8,690		(148	)		2		93		(96	)
Mutual funds		3		13,192		(374	)		1		7,867		(3,400	)
Total		174	$	359,017	$	(3,143	)		17	$	30,080	$	(4,078	)

At March 31, 2016, the Company held fixed maturity, equity securities and short-term investments that were in an unrealized loss position as presented in the table above. For fixed maturity securities with significant declines in value, the Company performs 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, equity securities and short-term investments, 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, 2016 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, 2016
	Cost or
	Amortized Cost		Fair Value
Due in one year or less	$	34,979	$	34,960
Due after one year through five years		266,958		268,810
Due after five years through ten years		3,006		3,055
Due after ten years		3,990		4,084
Mortgage-backed and asset-backed securities		183,108		183,522
Perpetual maturity securities		6,557		6,799
Total	$	498,598	$	501,230

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,
	2016			2015
Sales proceeds (fair value)	$	60,167		$	40,595
Gross realized gains	$	685		$	186
Gross realized losses	$	(18	)	$	(15	)

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,
	2016			2015
Fixed maturities	$	1,831		$	1,184
Equity securities		203			57
Short-term investments		115			38
Other (1)		73			66
Total investment income		2,222			1,345
Less: Investment expenses (2)		(617	)		(483	)
Net investment (expense) income	$	1,605		$	862

(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 bank fees, investment accounting and advisory fees, and expenses associated with real estate investments.

Investment Real Estate

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

	March 31, 2016			December 31, 2015
Investment real estate	$	8,242		$	6,220
Less: Accumulated depreciation		(132	)		(103	)
Investment real estate, net	$	8,110		$	6,117