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Investments | 6 Months Ended
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Jun. 30, 2021
Investments, Debt and Equity Securities [Abstract] |
Investments |
5 - | Investments
The amortized cost and estimated fair values of our fixed maturities at June 30, 2021 were as follows:
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
|  | (in thousands)
Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 89,716 |  |  | $ | 2,839 |  |  | $ | 649 |  |  | $ | 91,906 |
Obligations of states and political subdivisions |  |  | 346,517 |  |  |  | 20,073 |  |  |  | 788 |  |  |  | 365,802 |
Corporate securities |  |  | 188,162 |  |  |  | 15,061 |  |  |  | 267 |  |  |  | 202,956 |
Mortgage-backed securities |  |  | 19,453 |  |  |  | 1,005 |  |  |  | — |  |  |  | 20,458 |
Totals |  | $ | 643,848 |  |  | $ | 38,978 |  |  | $ | 1,704 |  |  | $ | 681,122 |
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
|  | (in thousands)
Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 22,508 |  |  | $ | 257 |  |  | $ | 439 |  |  | $ | 22,326 |
Obligations of states and political subdivisions |  |  | 59,378 |  |  |  | 2,366 |  |  |  | 31 |  |  |  | 61,713 |
Corporate securities |  |  | 201,634 |  |  |  | 9,644 |  |  |  | 202 |  |  |  | 211,076 |
Mortgage-backed securities |  |  | 222,814 |  |  |  | 5,068 |  |  |  | 417 |  |  |  | 227,465 |
Totals |  | $ | 506,334 |  |  | $ | 17,335 |  |  | $ | 1,089 |  |  | $ | 522,580 |
At June 30, 2021, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $267.8 million and an amortized cost of $254.2 million. Our holdings at June 30, 2021 also included special revenue bonds with an aggregate fair value of $159.7 million and an amortized cost of $151.7 million. With respect to both categories of those bonds at June 30, 2021, we held no securities of any issuer that comprised more than 10% of our holdings of either bond category. Education bonds and water and sewer utility bonds represented 46% and 35%, respectively, of our total investments in special revenue bonds based on the carrying values of these investments at June 30, 2021. Many of the issuers of the special revenue bonds we held at June 30, 2021 have the authority to impose ad valorem taxes. In that respect, many of the special revenue bonds we held at June 30, 2021 are similar to general obligation bonds. The amortized cost and estimated fair values of our fixed maturities at December 31, 2020 were as follows:
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
|  | (in thousands)
Held to Maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 77,435 |  |  | $ | 3,984 |  |  | $ | 223 |  |  | $ | 81,196 |
Obligations of states and political subdivisions |  |  | 312,319 |  |  |  | 23,212 |  |  |  | 143 |  |  |  | 335,388 |
Corporate securities |  |  | 173,270 |  |  |  | 18,172 |  |  |  | 206 |  |  |  | 191,236 |
Mortgage-backed securities |  |  | 23,585 |  |  |  | 1,236 |  |  |  | — |  |  |  | 24,821 |
Totals |  | $ | 586,609 |  |  | $ | 46,604 |  |  | $ | 572 |  |  | $ | 632,641 |
|  | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
|  | (in thousands)
Available for Sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 47,512 |  |  | $ | 424 |  |  | $ | 121 |  |  | $ | 47,815 |
Obligations of states and political subdivisions |  |  | 66,287 |  |  |  | 2,690 |  |  |  | 12 |  |  |  | 68,965 |
Corporate securities |  |  | 202,396 |  |  |  | 10,496 |  |  |  | 184 |  |  |  | 212,708 |
Mortgage-backed securities |  |  | 218,763 |  |  |  | 6,902 |  |  |  | 17 |  |  |  | 225,648 |
Totals |  | $ | 534,958 |  |  | $ | 20,512 |  |  | $ | 334 |  |  | $ | 555,136 |
​​​​​​​ At December 31, 2020, our holdings of obligations of states and political subdivisions included general obligation bonds with an aggregate fair value of $263.6 million and an amortized cost of $247.5 million. Our holdings also included special revenue bonds with an aggregate fair value of $140.8 million and an amortized cost of $131.1 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, 2020. Education bonds and water and sewer utility bonds represented 44% and 39%, respectively, of our total investments in special revenue bonds based on their carrying values at December 31, 2020. Many of the issuers of the special revenue bonds we held at December 31, 2020 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 made reclassifications from available for sale to held to maturity of certain fixed maturities at fair value on November 30, 2013. We segregated within accumulated other comprehensive income the net unrealized losses of $15.1 million arising prior to the November 30, 2013 reclassifications. We are amortizing this balance over the remaining life of the related securities as an adjustment to yield in a manner consistent with the accretion of discount on the same fixed maturities. We recorded amortization of $556,553 and $833,690 in other comprehensive (loss) income during the six months ended June 30, 2021 and 2020, respectively. At June 30, 2021 and December 31, 2020, net unrealized losses of $5.5 million and $6.1 million, respectively, remained within accumulated other comprehensive income. We show below the amortized cost and estimated fair value of our fixed maturities at June 30, 2021 by contractual maturity. Expected maturities may differ from contractual maturities because issuers of the securities may have the right to call or prepay obligations with or without call or prepayment penalties.
|  | Amortized Cost |  | Estimated Fair Value
|  | (in thousands)
Held to maturity |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 38,641 |  |  | $ | 39,762 |
Due after one year through five years |  |  | 83,282 |  |  |  | 88,929 |
Due after five years through ten years |  |  | 224,135 |  |  |  | 237,348 |
Due after ten years |  |  | 278,337 |  |  |  | 294,625 |
Mortgage-backed securities |  |  | 19,453 |  |  |  | 20,458 |
Total held to maturity |  | $ | 643,848 |  |  | $ | 681,122 |
Available for sale |  |  |  |  |  |  |  |
Due in one year or less |  | $ | 26,146 |  |  | $ | 26,621 |
Due after one year through five years |  |  | 131,837 |  |  |  | 138,624 |
Due after five years through ten years |  |  | 96,413 |  |  |  | 99,711 |
Due after ten years |  |  | 29,124 |  |  |  | 30,159 |
Mortgage-backed securities |  |  | 222,814 |  |  |  | 227,465 |
Total available for sale |  | $ | 506,334 |  |  | $ | 522,580 |
The cost and estimated fair values of our equity securities at June 30, 2021 were as follows:
|  | Cost |  | Gross Gains |  | Gross Losses |  | Estimated Fair Value
|  | (in thousands)
Equity securities |  | $ | 50,864 |  |  | $ | 22,007 |  |  | $ | 114 |  |  | $ | 72,757 |
The cost and estimated fair values of our equity securities at December 31, 2020 were as follows:
|  | Cost |  | Gross Gains |  | Gross Losses |  | Estimated Fair Value
|  | (in thousands)
Equity securities |  | $ | 42,410 |  |  | $ | 17,103 |  |  | $ | 957 |  |  | $ | 58,556 |
Gross investment gains and losses before applicable income taxes for the three months and six months ended June 30, 2021 and 2020 were as follows:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
|  | (in thousands) |  | (in thousands)
Gross investment gains: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities |  | $ | 479 |  |  | $ | 229 |  |  | $ | 524 |  |  | $ | 652 |
Equity securities |  |  | 3,762 |  |  |  | 6,474 |  |  |  | 6,728 |  |  |  | 3,355 |
|  |  | 4,241 |  |  |  | 6,703 |  |  |  | 7,252 |  |  |  | 4,007 |
Gross investment losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed maturities |  |  | — |  |  |  | 217 |  |  |  | 74 |  |  |  | 218 |
Equity securities |  |  | — |  |  |  | — |  |  |  | 468 |  |  |  | 7,998 |
|  |  | — |  |  |  | 217 |  |  |  | 542 |  |  |  | 8,216 |
Net investment gains (losses) |  | $ | 4,241 |  |  | $ | 6,486 |  |  | $ | 6,710 |  |  | $ | (4,209 | )
We recognized $6.1 million of gains and $114,339 of losses on equity securities we held at June 30, 2021 in net investment gains for the six months ended June 30, 2021. We recognized $3.4 million of gains and $4.9 million of losses on equity securities we held at June 30, 2020 in net investment losses for the six months ended June 30, 2020. We held fixed maturities with unrealized losses representing declines that we considered temporary at June 30, 2021 as follows:
|  | Less Than 12 Months |  | More Than 12 Months
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
|  | (in thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 38,202 |  |  | $ | 1,088 |  |  | $ | — |  |  | $ | — |
Obligations of states and political subdivisions |  |  | 45,446 |  |  |  | 819 |  |  |  | — |  |  |  | — |
Corporate securities |  |  | 38,846 |  |  |  | 344 |  |  |  | 3,375 |  |  |  | 125 |
Mortgage-backed securities |  |  | 55,930 |  |  |  | 415 |  |  |  | 487 |  |  |  | 2 |
Totals |  | $ | 178,424 |  |  | $ | 2,666 |  |  | $ | 3,862 |  |  | $ | 127 |
We held fixed maturities with unrealized losses representing declines that we considered temporary at December 31, 2020 as follows:
|  | Less Than 12 Months |  | More Than 12 Months
|  | Fair Value |  | Unrealized Losses |  | Fair Value |  | Unrealized Losses
|  | (in thousands)
U.S. Treasury securities and obligations of U.S. government corporations and agencies |  | $ | 29,144 |  |  | $ | 345 |  |  | $ | — |  |  | $ | — |
Obligations of states and political subdivisions |  |  | 9,362 |  |  |  | 154 |  |  |  | — |  |  |  | — |
Corporate securities |  |  | 26,143 |  |  |  | 115 |  |  |  | 8,230 |  |  |  | 276 |
Mortgage-backed securities |  |  | 3,091 |  |  |  | 15 |  |  |  | 236 |  |  |  | 1 |
Totals |  | $ | 67,740 |  |  | $ | 629 |  |  | $ | 8,466 |  |  | $ | 277 |
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 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 the 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 with respect to that security. 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, issuer or geographic events that have negatively impacted the value of a security and rating agency downgrades. We held 89 debt securities that were in an unrealized loss position at June 30, 2021. 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 amortize premiums and discounts on debt securities over the life of the security as an adjustment to yield using the effective interest method. We compute realized investment gains and losses using the specific identification method. We amortize premiums and discounts on mortgage-backed debt securities using anticipated prepayments.

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