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Investments | 12 Months Ended
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Dec. 31, 2021
Investments, Debt and Equity Securities [Abstract] |
Investments | INVESTMENTS The following table provides the amortized cost and fair value of available-for-sale debt securities as of the dates presented (in thousands):
|  | December 31, 2021
|  | Amortized Cost |  | Allowance for Expected Credit Losses |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Debt Securities: |  |  |  |  |  |  |  |  |  |
U.S. government obligations and agencies |  | $ | 27,076 |  |  | $ | — |  |  | $ | 64 |  |  | $ | (334) |  |  | $ | 26,806 |
Corporate bonds |  | 687,058 |  |  | (371) |  |  | 843 |  |  | (13,725) |  |  | 673,805 |
Mortgage-backed and asset-backed securities |  | 322,844 |  |  | — |  |  | 194 |  |  | (6,920) |  |  | 316,118 |
Municipal bonds |  | 14,925 |  |  | (1) |  |  | — |  |  | (350) |  |  | 14,574 |
Redeemable preferred stock |  | 9,289 |  |  | (117) |  |  | 28 |  |  | (48) |  |  | 9,152 |
Total |  | $ | 1,061,192 |  |  | $ | (489) |  |  | $ | 1,129 |  |  | $ | (21,377) |  |  | $ | 1,040,455 |
|  | December 31, 2020
|  | Amortized Cost |  | Allowance for Expected Credit Losses |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Fair Value
Debt Securities: |  |  |  |  |  |  |  |  |  |
U.S. government obligations and agencies |  | $ | 59,529 |  |  | $ | — |  |  | $ | 157 |  |  | $ | (55) |  |  | $ | 59,631 |
Corporate bonds |  | 416,758 |  |  | (148) |  |  | 3,571 |  |  | (337) |  |  | 419,844 |
Mortgage-backed and asset-backed securities |  | 319,377 |  |  | — |  |  | 1,175 |  |  | (615) |  |  | 319,937 |
Municipal bonds |  | 11,990 |  |  | — |  |  | 138 |  |  | — |  |  | 12,128 |
Redeemable preferred stock |  | 7,993 |  |  | (38) |  |  | 424 |  |  | (58) |  |  | 8,321 |
Total |  | $ | 815,647 |  |  | $ | (186) |  |  | $ | 5,465 |  |  | $ | (1,065) |  |  | $ | 819,861 |
The following table provides the credit quality of available-for-sale debt securities with contractual maturities as of the dates presented (dollars in thousands):
|  | December 31, 2021 |  | December 31, 2020
|  |  |  | % of Total |  |  |  | % of Total
Average Credit Ratings |  | Fair Value |  | Fair Value |  | Fair Value |  | Fair Value
AAA |  | $ | 321,975 |  |  | 31.0 | % |  | $ | 337,462 |  |  | 41.2 | %
AA |  | 139,186 |  |  | 13.4 | % |  | 89,681 |  |  | 10.9 | %
A |  | 339,500 |  |  | 32.6 | % |  | 230,290 |  |  | 28.1 | %
BBB |  | 234,358 |  |  | 22.5 | % |  | 160,662 |  |  | 19.6 | %
BB and Below |  | — |  |  | — | % |  | 233 |  |  | — | %
No Rating Available |  | 5,436 |  |  | 0.5 | % |  | 1,533 |  |  | 0.2 | %
Total |  | $ | 1,040,455 |  |  | 100.0 | % |  | $ | 819,861 |  |  | 100.0 | %
The table above includes credit quality ratings by Standard and Poor’s Rating Services, Inc. (“S&P”), Moody’s Investors Service, Inc. and Fitch Ratings, Inc. The Company has presented the highest rating of the three rating agencies for each investment position. The following table summarizes the amortized cost and fair value of mortgage-backed and asset-backed securities as of the dates presented (in thousands):
|  | December 31, 2021 |  | December 31, 2020
|  | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Mortgage-backed securities: |  |  |  |  |  |  |  |
Agency |  | $ | 147,992 |  |  | $ | 143,819 |  |  | $ | 153,937 |  |  | $ | 153,758 |
Non-agency |  | 59,906 |  |  | 58,263 |  |  | 54,231 |  |  | 54,666 |
Asset-backed securities: |  |  |  |  |  |  |  |
Auto loan receivables |  | 67,352 |  |  | 66,877 |  |  | 68,188 |  |  | 68,440 |
Credit card receivables |  | 4,741 |  |  | 4,719 |  |  | 7,878 |  |  | 7,891 |
Other receivables |  | 42,853 |  |  | 42,440 |  |  | 35,143 |  |  | 35,182 |
Total |  | $ | 322,844 |  |  | $ | 316,118 |  |  | $ | 319,377 |  |  | $ | 319,937 |
The following tables summarize available-for-sale debt securities, aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position, for which no allowance for expected credit losses has been recorded as of the dates presented (in thousands):
|  | December 31, 2021
|  | Less Than 12 Months |  | 12 Months or Longer
|  | Number of Issues |  | Fair Value |  | Unrealized Losses |  | Number of Issues |  | Fair Value |  | Unrealized Losses
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations and agencies |  | 4 |  |  | $ | 18,913 |  |  | $ | (111) |  |  | 4 |  |  | $ | 5,016 |  |  | $ | (223) |
Corporate bonds |  | 249 |  |  | 378,595 |  |  | (7,468) |  |  | 18 |  |  | 17,356 |  |  | (679) |
Mortgage-backed and asset-backed securities |  | 145 |  |  | 274,883 |  |  | (5,969) |  |  | 11 |  |  | 23,273 |  |  | (951) |
Municipal bonds |  | 5 |  |  | 9,811 |  |  | (269) |  |  | — |  |  | — |  |  | — |
Redeemable preferred stock |  | 1 |  |  | 200 |  |  | (1) |  |  | — |  |  | — |  |  | — |
Total |  | 404 |  |  | $ | 682,402 |  |  | $ | (13,818) |  |  | 33 |  |  | $ | 45,645 |  |  | $ | (1,853) |
|  | December 31, 2020
|  | Less Than 12 Months |  | 12 Months or Longer
|  | Number of Issues |  | Fair Value |  | Unrealized Losses |  | Number of Issues |  | Fair Value |  | Unrealized Losses
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |
U.S. government obligations and agencies |  | 8 |  |  | $ | 31,729 |  |  | $ | (55) |  |  | — |  |  | $ | — |  |  | $ | — |
Corporate bonds |  | 27 |  |  | 28,791 |  |  | (162) |  |  | — |  |  | — |  |  | — |
Mortgage-backed and asset-backed securities |  | 42 |  |  | 112,462 |  |  | (615) |  |  | — |  |  | — |  |  | — |
Municipal bonds |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Redeemable preferred stock |  | 2 |  |  | 688 |  |  | (12) |  |  | — |  |  | — |  |  | — |
Total |  | 79 |  |  | $ | 173,670 |  |  | $ | (844) |  |  | — |  |  | $ | — |  |  | $ | — |
Unrealized losses on available-for-sale debt securities in the above table as of December 31, 2021 and 2020 have not been recognized into income as credit losses because the issuers are of high credit quality (investment grade securities), management does not intend to sell and it is likely management will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. There were no material factors impacting any one category or specific security requiring an accrual for credit loss. The issuers continue to make principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity. The following table presents a reconciliation of the beginning and ending balances for expected credit losses on available-for-sale debt securities (in thousands):
|  | Corporate Bonds |  | Municipal Bonds |  | Redeemable Preferred Stock |  | Total |
Balance, December 31, 2019 |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |
Cumulative effect adjustment as of January 1, 2020 |  | 665 |  |  | — |  |  | 126 |  |  | 791 |  |
Provision for (or reversal of) credit loss expense |  | (517) |  |  | — |  |  | (88) |  |  | (605) |  |
Balance, December 31, 2020 |  | 148 |  |  | — |  |  | 38 |  |  | 186 |  |
Provision for (or reversal of) credit loss expense |  | 223 |  |  | 1 |  |  | 79 |  |  | 303 |  |
Balance, December 31, 2021 |  | $ | 371 |  |  | $ | 1 |  |  | $ | 117 |  |  | $ | 489 |  |
See “—Note 2 (Summary of Significant Accounting Policies — Allowance for Credit Losses-Available-For-Sale Securities.)” for more information about the methodology and significant inputs used to measure the amount related to expected credit losses on available-for-sale debt securities. The following table presents the amortized cost and fair value of investments with maturities as of the date presented (in thousands):
|  | December 31, 2021
|  | Amortized Cost |  | Fair Value
Due in one year or less |  | $ | 30,183 |  |  | $ | 30,163 |
Due after one year through five years |  | 530,894 |  |  | 522,941 |
Due after five years through ten years |  | 469,554 |  |  | 457,010 |
Due after ten years |  | 29,863 |  |  | 29,647 |
Perpetual maturity securities |  | 698 |  |  | 694 |
Total |  | $ | 1,061,192 |  |  | $ | 1,040,455 |
All securities, except those with perpetual maturities, were categorized in the table above utilizing years to effective maturity. Effective maturity takes into consideration all forms of potential prepayment, such as call features or prepayment schedules, that shorten the lifespan of contractual maturity dates. The following table provides certain information related to available-for-sale debt securities, equity securities and investment real estate during the periods presented (in thousands):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Proceeds from sales and maturities (fair value): |  |  |  |  |  |
Available-for-sale debt securities (1) |  | $ | 186,507 |  |  | $ | 1,148,418 |  |  | $ | 223,266 |
Equity securities |  | $ | 85,103 |  |  | $ | 81,559 |  |  | $ | 29,680 |
Gross realized gains on sale of securities: |  |  |  |  |  |
Available-for-sale debt securities (1) |  | $ | 2,649 |  |  | $ | 57,378 |  |  | $ | 790 |
Equity securities |  | $ | 3,005 |  |  | $ | 6,438 |  |  | $ | 367 |
Gross realized losses on sale of securities: |  |  |  |  |  |
Available-for-sale debt securities |  | $ | (2,434) |  |  | $ | (464) |  |  | $ | (298) |
Equity securities |  | $ | (208) |  |  | $ | — |  |  | $ | (14,787) |
Realized gains on sales of investment real estate (2) |  | $ | 401 |  |  | $ | — |  |  | $ | 1,213 |
(1) |  |  | In the third and fourth quarters of 2020, the Company took advantage of the market recovery and recognized $56.4 million of net realized gains on the sale of our available-for-sale debt securities that were in an unrealized gain position.
(2) |  |  | See the discussion below for “Investment Real Estate” sold.
The following table presents the components of net investment income, comprised primarily of interest and dividends for the periods presented (in thousands):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Available-for-sale debt securities |  | $ | 11,926 |  |  | $ | 19,091 |  |  | $ | 24,989 |
Equity securities |  | 2,651 |  |  | 2,445 |  |  | 2,648 |
Cash and cash equivalents (1) |  | 51 |  |  | 960 |  |  | 5,176 |
Other (2) |  | 928 |  |  | 1,050 |  |  | 1,008 |
Total investment income |  | 15,556 |  |  | 23,546 |  |  | 33,821 |
Less: Investment expenses (3) |  | (3,021) |  |  | (3,153) |  |  | (3,078) |
Net investment income |  | $ | 12,535 |  |  | $ | 20,393 |  |  | $ | 30,743 |
(1) |  | Includes interest earned on restricted cash and cash equivalents.
(2) |  | Includes investment income earned on real estate investments.
(3) |  | Includes custodial fees, investment accounting and advisory fees, and expenses associated with real estate investments.
Equity Securities The following table provides the unrealized gains and losses recognized for the periods presented on equity securities still held at the end of the reported period (in thousands):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Unrealized gains and (losses) recognized during the reported period on equity securities still held at the end of the reporting period |  | $ | (3,459) |  |  | $ | 25 |  |  | $ | 4,163 |
Assets Held for Sale Sold during December 31, 2021 During the first quarter of 2021, the Company committed to a plan to actively market an income-producing investment real estate property and classified the investment property to assets held for sale. On September 30, 2021, the Company completed the sale and received net cash proceeds of approximately $8.9 million and recognized a pre-tax gain of approximately $2.3 million that is included in net realized gains (losses) on investments in the Consolidated Statements of Income for the year ended December 31, 2021. During the second quarter of 2021, the Company committed to a plan to actively market the sale of a real estate property previously included in property and equipment, net and classified the real estate property to assets held for sale. The real estate property is located in Pompano Beach, Florida. On October 8, 2021, the Company completed the sale and received net cash proceeds of approximately $0.4 million and recognized a pre-tax gain of approximately $0.2 million that is included in net realized gains (losses) on investments in the Consolidated Statements of Income for the year ended December 31, 2021. Investment Real Estate Investment real estate consisted of the following as of the dates presented (in thousands):
|  | As of December 31,
|  | 2021 |  | 2020
Income Producing: |  |  |  |
Investment real estate |  | $ | 7,091 |  |  | $ | 14,685 |
Less: Accumulated depreciation |  | (1,200) |  |  | (1,699) |
|  | 5,891 |  |  | 12,986 |
Non-Income Producing: |  |  |  |
Investment real estate |  | — |  |  | 2,190 |
Investment real estate, net |  | $ | 5,891 |  |  | $ | 15,176 |
During the year ended December 31, 2021, the Company completed the sale of an investment real estate property. The Company received net cash proceeds of approximately $2.6 million and recognized a pre-tax gain of approximately $0.4 million that is included in net realized gains (losses) on investments in the Consolidated Statements of Income for the year ended December 31, 2021. This investment real estate property was not previously reported under assets held for sale since it was actively marketed and sold within the first quarter of 2021. Depreciation expense related to investment real estate for the periods presented (in thousands):
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
Depreciation expense on investment real estate |  | $ | 186 |  |  | $ | 415 |  |  | $ | 414 |

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