Investments

12 Months Ended

Dec. 31, 2019

Investments, Debt and Equity Securities [Abstract]

4 - Investments

The amortized cost and estimated fair values of our fixed maturities at December 31, 2019 and 2018 are as follows:


	2019
Held to Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	82,916,052	$	1,803,230	$	68,560	$	84,650,722
Obligations of states and political subdivisions		204,634,486		14,236,736		288,174		218,583,048
Corporate securities		156,398,001		8,274,912		333,166		164,339,747
Mortgage-backed securities		32,145,243		611,641		16,057		32,740,827

Totals	$	476,093,782	$	24,926,519	$	705,957	$	500,314,344


	2019
Available for Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	19,302,056	$	81,773	$	19,370	$	19,364,459
Obligations of states and political subdivisions		55,162,046		1,641,171		6,929		56,796,288
Corporate securities		154,946,586		4,477,035		180,312		159,243,309
Mortgage-backed securities		327,428,590		2,856,820		737,663		329,547,747

Totals	$	556,839,278	$	9,056,799	$	944,274	$	564,951,803


	2018
Held to Maturity	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	76,222,306	$	174,904	$	1,086,613	$	75,310,597
Obligations of states and political subdivisions		159,292,158		8,236,804		704,104		166,824,858
Corporate securities		127,010,071		396,197		4,391,451		123,014,817
Mortgage-backed securities		40,273,983		64,318		450,277		39,888,024

Totals	$	402,798,518	$	8,872,223	$	6,632,445	$	405,038,296


	2018
Available for Sale	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	45,188,053	$	25,241	$	1,003,365	$	44,209,929
Obligations of states and political subdivisions		73,760,836		1,762,127		306,994		75,215,969
Corporate securities		140,688,937		203,393		3,059,185		137,833,145
Mortgage-backed securities		275,474,625		148,967		6,324,331		269,299,261

Totals	$	535,112,451	$	2,139,728	$	10,693,875	$	526,558,304

At December 31, 2019, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $182.0 million and an amortized cost of $172.3 million. Our holdings also included special revenue bonds with an aggregate fair value of $93.4 million and an amortized cost of $87.5 million. With respect to both categories of bonds, we held no securities of any issuer that comprised more than 10% of that category at December 31, 201

. Education bonds and water and sewer utility bonds represented 44% and 35%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 201

. Many of the issuers of the special revenue bonds we held at December 31, 2019 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held are similar to general obligation bonds.

At December 31, 2018, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $157.7 million and an amortized cost of $152.2 million. Our holdings also included special revenue bonds with an aggregate fair value of $84.3 million and an amortized cost of $80.9 million. With respect to both categories of bonds, we held no securities of any issuer that comprised more than 10% of that category at December 31, 2018. Education bonds and water and sewer utility bonds represented 49% and 29%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 2018. Many of the issuers of the special revenue bonds we held at December 31, 2018 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held are similar to general obligation bonds.

We have segregated within accumulated other comprehensive

income

the net unrealized losses of $15.1 million arising prior to the November 30, 2013 reclassification date for fixed maturities reclassified from available for sale to held to maturity. We will amortize this balance over the remaining life of the related securities as an adjustment of yield in a manner consistent with the accretion of discount on the same fixed maturities. During 2019, we recorded amortization of $1.2 million in other comprehensive

income

. At December 31, 2019 and 2018, net unrealized losses of $7.5 million and $8.6 million, respectively, remained within accumulated other comprehensive loss.

We set forth below the amortized cost and estimated fair value of fixed maturities at December 31, 2019 by contractual maturity. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.


	Amortized Cost		Estimated Fair Value
Held to maturity
Due in one year or less	$	16,132,891	$	16,205,362
Due after one year through five years		73,727,277		76,542,800
Due after five years through ten years		182,428,771		191,642,042
Due after ten years		171,659,600		183,183,313
Mortgage-backed securities		32,145,243		32,740,827

Total held to maturity	$	476,093,782	$	500,314,344

Available for sale
Due in one year or less	$	12,943,726	$	13,075,792
Due after one year through five years		89,684,400		91,992,458
Due after five years through ten years		112,308,452		115,407,525
Due after ten years		14,474,110		14,928,281
Mortgage-backed securities		327,428,590		329,547,747

Total available for sale	$	556,839,278	$	564,951,803

The cost and estimated fair values of our equity securities at December 31, 2019 were as follows:


	Cost		Gross Gains		Gross Losses		Estimated Fair Value
Equity securities	$	43,419,136	$	12,179,912	$	121,492	$	55,477,556

The cost and estimated fair values of our equity securities at December 31, 2018 were as follows:


	Cost		Gross Gains		Gross Losses		Estimated Fair Value
Equity securities	$	40,942,716	$	4,817,917	$	2,093,624	$	43,667,009

The amortized cost of fixed maturities on deposit with various regulatory authorities at December 31, 2019 and 2018 amounted to $8,330,651 and $8,795,334, respectively.

We derive

net investment income, consisting primarily of interest and dividends, from the following sources:


	2019			2018			2017
Fixed maturities	$	29,969,774		$	27,733,555		$	26,143,924
Equity securities		1,268,056			1,264,120			999,335
Short-term investments		1,243,104			795,522			407,580
Other		29,251			29,450			33,316

Investment income		32,510,185			29,822,647			27,584,155
Investment expenses		(2,995,230	)		(2,914,991	)		(4,056,851	)

Net investment income	$	29,514,955		$	26,907,656		$	23,527,304

We present below gross gains and losses from investments, including those we classified as held to maturity, and the change in the difference between fair value and cost of investments:


	2019		2018			2017
Gross gains:
Fixed maturities	$	470,983	$	131,660		$	168,855
Equity securities		10,471,285		1,890,762			6,197,253
Investment in affiliate		12,662,147
		23,604,415		2,022,422			6,366,108
Gross losses:
Fixed maturities		323,746		630,904			98,723
Equity securities		1,296,052		6,193,027			562,130
		1,619,798		6,823,931			660,853
Net investment gains (losses)	$	21,984,617	$	(4,801,509	)	$	5,705,255
Change in difference between fair value and cost of investments:
Fixed maturities	$	38,647,456	$	(20,641,433	)	$	2,335,578
Equity securities		9,334,127		(3,501,853	)		1,569,999
Totals	$	47,981,583	$	(24,143,286	)	$	3,905,577

We recognized $8.9 million of

unrealized

gains and $25,751 of

unrealized

losses on equity securities held at December 31, 2019 in net investment gains for 2019. We

recognized $1.2 million of

unrealized

gains and $4.4 million of

unrealized

losses on equity securities held at December 31, 201

in net investment losses for 201

We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2019 as follows:


	Less than 12 months				12 months or longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	7,461,245	$	45,688	$	5,394,735	$	42,242
Obligations of states and political subdivisions		23,339,340		293,516		2,326,813		1,587
Corporate securities		19,362,346		263,280		18,803,546		250,198
Mortgage-backed securities		28,507,123		55,729		74,088,769		697,991

Totals	$	78,670,054	$	658,213	$	100,613,863	$	992,018

We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2018 as follows:


	Less than 12 months				12 months or longer
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies	$	26,342,398	$	165,774	$	54,900,027	$	1,924,204
Obligations of states and political subdivisions		28,321,962		477,357		21,559,520		533,741
Corporate securities		149,269,854		4,482,870		59,396,885		2,967,766
Mortgage-backed securities		82,593,454		912,616		181,379,875		5,861,992

Totals	$	286,527,668	$	6,038,617	$	317,236,307	$	11,287,703

We make estimates concerning the valuation of our investments and the recognition of other-than-temporary declines in the value of our investments. For equity securities, we measure investments at fair value and, beginning January 1, 2018, we recognize changes in fair value in our results of operations. With respect to a debt security that is in an unrealized loss position, we first assess if we intend to sell the debt security. If we determine we intend to sell the debt security, we recognize the impairment loss in our results of operations. If we do not intend to sell the debt security, we determine whether it is more likely than not that we will be required to sell the debt security prior to recovery. If we determine it is more likely than not that we will be required to sell the debt security prior to recovery, we recognize an impairment loss in our results of operations. If we determine it is more likely than not that we will not be required to sell the debt security prior to recovery, we then evaluate whether a credit loss has occurred. We determine whether a credit loss has occurred by comparing the amortized cost of the debt security to the present value of the cash flows we expect to collect. If we expect a cash flow shortfall, we consider that a credit loss has occurred. If we determine that a credit loss has occurred, we consider the impairment to be other than temporary. We then recognize the amount of the impairment loss related to the credit loss in our results of operations, and we recognize the remaining portion of the impairment loss in our other comprehensive income, net of applicable taxes. In addition, we may write down securities in an unrealized loss position based on a number of other factors, including when the fair value of an investment is significantly below its cost, when the financial condition of the issuer of a security has deteriorated, the occurrence of industry, company or geographic events that have negatively impacted the value of a security and rating agency downgrades. We held 136 debt securities that were in an unrealized loss position at December 31, 2019. Based upon our analysis of general market conditions and underlying factors impacting these debt securities, we considered these declines in value to be temporary.

We did not recognize any impairment losses in 2019, 2018 or 2017. We had

sales or transfers from our held to maturity portfolio in 2019, 2018 or 2017. We had

derivative instruments or hedging activities during 2019, 2018 or 2017.