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Note 7 - Investments | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Investment [Text Block] | NOTE 7 INVESTMENTS The amortized cost, gross unrealized gains and losses included in accumulated other comprehensive (loss) income, and estimated fair value of the Company's available-for-sale investments at December 31, 2023 and December 31, 2022 are summarized in the tables shown below:
(in thousands) |  | December 31, 2023 |
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated Fair |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government, government agencies and authorities |  | $ | 13,384 |  |  | $ | 8 |  |  | $ | 395 |  |  | $ | 12,997 |
States, municipalities and political subdivisions |  |  | 2,885 |  |  |  | 3 |  |  |  | 105 |  |  |  | 2,783 |
Mortgage-backed |  |  | 9,724 |  |  |  | 23 |  |  |  | 494 |  |  |  | 9,253 |
Asset-backed |  |  | 1,254 |  |  |  | 1 |  |  |  | 45 |  |  |  | 1,210 |
Corporate |  |  | 10,860 |  |  |  | 18 |  |  |  | 648 |  |  |  | 10,230 |
Total fixed maturities |  | $ | 38,107 |  |  | $ | 53 |  |  | $ | 1,687 |  |  | $ | 36,473 |
(in thousands) |  | December 31, 2022 |
|  |  |  |  |  | Gross |  |  | Gross |  |  |  |  |
|  | Amortized |  |  | Unrealized |  |  | Unrealized |  |  | Estimated Fair |
|  | Cost |  |  | Gains |  |  | Losses |  |  | Value |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government, government agencies and authorities |  | $ | 15,797 |  |  | $ | — |  |  | $ | 717 |  |  | $ | 15,080 |
States, municipalities and political subdivisions |  |  | 2,390 |  |  |  | — |  |  |  | 158 |  |  |  | 2,232 |
Mortgage-backed |  |  | 9,058 |  |  |  | 1 |  |  |  | 647 |  |  |  | 8,412 |
Asset-backed |  |  | 1,682 |  |  |  | — |  |  |  | 72 |  |  |  | 1,610 |
Corporate |  |  | 11,200 |  |  |  | 1 |  |  |  | 944 |  |  |  | 10,257 |
Total fixed maturities |  | $ | 40,127 |  |  | $ | 2 |  |  | $ | 2,538 |  |  | $ | 37,591 |
The table below summarizes the Company's fixed maturities at December 31, 2023 by contractual maturity periods. Actual results may differ as issuers may have the right to call or prepay obligations, with or without penalties, prior to the contractual maturity of these obligations.
(in thousands) |  | December 31, 2023 |
|  |  |  |  |  | Estimated Fair |
|  | Amortized Cost |  |  | Value |
Due in one year or less |  | $ | 6,021 |  |  | $ | 5,922 |
Due after one year through five years |  |  | 26,223 |  |  |  | 25,155 |
Due after five years through ten years |  |  | 1,144 |  |  |  | 1,067 |
Due after ten years |  |  | 4,719 |  |  |  | 4,329 |
Total |  | $ | 38,107 |  |  | $ | 36,473 |
The following tables highlight the aggregate unrealized loss position, by security type, of available-for-sale investments in unrealized loss positions where no credit loss allowance had been established as of December 31, 2023 and December 31, 2022. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions.
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, 2023 |
|  | Less than 12 Months |  |  | Greater than 12 Months |  |  | Total |
|  | Estimated |  |  | Unrealized |  |  | Estimated |  |  | Unrealized |  |  | Estimated |  |  | Unrealized |
|  | Fair Value |  |  | Loss |  |  | Fair Value |  |  | Loss |  |  | Fair Value |  |  | Loss |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government, government agencies and authorities |  | $ | 3,237 |  |  | $ | 46 |  |  | $ | 7,940 |  |  | $ | 349 |  |  | $ | 11,177 |  |  | $ | 395 |
States, municipalities and political subdivisions |  |  | — |  |  |  | — |  |  |  | 1,705 |  |  |  | 105 |  |  |  | 1,705 |  |  |  | 105 |
Mortgage-backed |  |  | 737 |  |  |  | 11 |  |  |  | 6,067 |  |  |  | 483 |  |  |  | 6,804 |  |  |  | 494 |
Asset-backed |  |  | — |  |  |  | — |  |  |  | 1,050 |  |  |  | 45 |  |  |  | 1,050 |  |  |  | 45 |
Corporate |  |  | 937 |  |  |  | 11 |  |  |  | 8,013 |  |  |  | 637 |  |  |  | 8,950 |  |  |  | 648 |
Total fixed maturities |  | $ | 4,911 |  |  | $ | 68 |  |  | $ | 24,775 |  |  | $ | 1,619 |  |  | $ | 29,686 |  |  | $ | 1,687 |
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, 2022 |
|  | Less than 12 Months |  |  | Greater than 12 Months |  |  | Total |
|  | Estimated |  |  | Unrealized |  |  | Estimated |  |  | Unrealized |  |  | Estimated |  |  | Unrealized |
|  | Fair Value |  |  | Loss |  |  | Fair Value |  |  | Loss |  |  | Fair Value |  |  | Loss |
Fixed maturities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government, government agencies and authorities |  | $ | 4,543 |  |  | $ | 126 |  |  | $ | 10,537 |  |  | $ | 591 |  |  | $ | 15,080 |  |  | $ | 717 |
States, municipalities and political subdivisions |  |  | 1,040 |  |  |  | 73 |  |  |  | 937 |  |  |  | 85 |  |  |  | 1,977 |  |  |  | 158 |
Mortgage-backed |  |  | 2,248 |  |  |  | 93 |  |  |  | 5,756 |  |  |  | 554 |  |  |  | 8,004 |  |  |  | 647 |
Asset-backed |  |  | 1,251 |  |  |  | 39 |  |  |  | 299 |  |  |  | 33 |  |  |  | 1,550 |  |  |  | 72 |
Corporate |  |  | 3,244 |  |  |  | 155 |  |  |  | 6,760 |  |  |  | 789 |  |  |  | 10,004 |  |  |  | 944 |
Total fixed maturities |  | $ | 12,326 |  |  | $ | 486 |  |  | $ | 24,289 |  |  | $ | 2,052 |  |  | $ | 36,615 |  |  | $ | 2,538 |
At December 31, 2023, there are approximately 181 individual available-for-sale investments that were in unrealized loss positions, for which an allowance for credit losses had not been recorded. The Company did not have the intent to sell these investments, and it was not more likely than not that the Company would be required to sell these investments before recovery of its amortized cost. The Company evaluated these investments for credit losses at December 31, 2023. The Company considers many factors in evaluating whether the unrealized losses were credit-related, including, but not limited to, the extent to which the fair value has been less than amortized cost, conditions related to the security, industry, or geographic area, payment structure of the investment and the likelihood of the issuer’s ability to make contractual cashflows, defaults or other collectability concerns related to the issuer, changes in the ratings assigned by a rating agency, and other credit enhancements that affect the investment’s expected performance. The Company determined that the unrealized losses on the fixed maturity investments were due to non-credit related factors at December 31, 2023. At December 31, 2022, there are approximately 208 individual available-for-sale investments that were in unrealized loss positions. Prior to the adoption of ASU 2016-13, the Company performed an analysis of the individual investments to determine if declines in market value were other-than-temporary. The Company reviewed currently available information, including, but not limited to, the credit ratings of the issuers of the investments in the fixed maturities with estimated fair values less than their carrying amounts and believes these unrealized losses are not other-than-temporary and are primarily due to temporary market and sector-related factors rather than to issuer-specific factors. The Company did not have the intent to sell these investments, and it was not more likely than not that the Company would be required to sell those investments before recovery of its amortized cost. The establishment of an impairment loss on an investment requires a number of judgments and estimates. The Company performs a quarterly analysis of the individual investments for factors that may indicate a decline in fair value below its cost, amortized cost or modified cost. Refer to the "Significant Accounting Policies and Critical Estimates" section of Management's Discussion & Analysis for further information regarding the Company's detailed analysis and factors considered in recording an impairment loss on an investment. The Company did not record any write-downs for impairment related to available-for-sale fixed maturity investments for the years ended December 31, 2023 and December 31, 2022. The Company does not have any exposure to subprime mortgage-backed investments. As of December 31, 2023 and December 31, 2022, the carrying value of limited liability investments totaled $0.8 million and $1.0 million, respectively. The Company recorded impairments related to limited liability investments of $0.1 million and zero for the years ended December 31, 2023 and December 31, 2022, respectively, which are included in impairment losses in the consolidated statements of operations. At December 31, 2023, the Company has no unfunded commitments related to limited liability investments. Limited liability investments, at fair value represents the underlying investments of the Company’s consolidated entities Argo Holdings and Net Lease (at December 31, 2022 only). As of December 31, 2023 and December 31, 2022, the carrying value of the Company's limited liability investments, at fair value was $3.5 million and $17.1 million, respectively. The Company recorded impairments related to limited liability investments, at fair value of $0.1 million and less than $0.1 million for the years ended December 31, 2023 and December 31, 2022, respectively, which are included in gain (loss) on change in fair value of limited liability investments, at fair value in the consolidated statements of operations. At December 31, 2023, the Company has no unfunded commitments related to limited liability investments, at fair value. The Company consolidated the financial statements of Net Lease on a three-month lag. Net Lease owned investments in limited liability companies that held investment properties.
| • | During the fourth quarter of 2022, one of Net Lease's limited liability companies refinanced their existing debt. Debt proceeds of $5.2 million were distributed to Net Lease, which decreased Net Lease's investment in the limited liability company, which the Company recorded during the first quarter of 2023.
| • | During the first quarter of 2023, Net Lease sold its final investment property for $15.8 million. Net Lease received net proceeds of $8.1 million after the repayment of debt at the limited liability company and transaction expenses.
| • | As a result of the sale and subsequent distribution of the net proceeds, the carrying value of Net Lease's investments in limited liability companies is zero at December 31, 2023.
As of December 31, 2023 and December 31, 2022, the carrying value of the Company’s investments in private companies total ed $0.9 million and $0.8 million. For the years ended December 31, 2023 and December 31, 2022, the Company recorded adjustments of $0.1 million and zero, respectively, to increase the fair value of certain investments in private companies for observable price changes, which are included in unrealized gain on private company investments in the consolidated statements of operations. The Company performs a quarterly impairment analysis of its investments in private companies. As a result of the analysis performed, the Company did not record any impairments related to investments in private companies for the years ended December 31, 2023 and December 31, 2022. Real estate investments represented investment real estate properties held by the Company’s consolidated subsidiary, Flower. On September 29, 2022, Flower sold their investment real estate properties for $12.2 million. A portion of the proceeds from the sale were used to repay the Flower note payable with an unpaid principal balance of $5.9 million at the transaction date. Flower recorded a gain of $1.5 million related to the sale, which is included in gain on change in fair value of real estate investments in the consolidated statement of operations for the year ended December 31, 2022. Net investment income for the years ended December 31, 2023 and December 31, 2022, respectively, is comprised as follows:
(in thousands) |  | Years ended December 31, |
|  | 2023 |  |  | 2022 |
Investment income |  |  |  |  |  |  |  |
Interest from fixed maturities |  | $ | 1,018 |  |  | $ | 556 |
Dividends |  |  | 97 |  |  |  | 159 |
(Loss) income from limited liability investments |  |  | (44 | ) |  |  | 293 |
Income from limited liability investments, at fair value |  |  | — |  |  |  | 4 |
Income from real estate investments |  |  | — |  |  |  | 795 |
Other |  |  | 839 |  |  |  | 612 |
Gross investment income |  |  | 1,910 |  |  |  | 2,419 |
Investment expenses |  |  | (106 | ) |  |  | (114 | )
Net investment income |  | $ | 1,804 |  |  | $ | 2,305 |
Net realized gains on investments for the years ended December 31, 2023 and December 31, 2022 are comprised as follows:
(in thousands) |  | Years ended December 31, |
|  | 2023 |  |  | 2022 |
Available-for-sale fixed maturities: |  |  |  |  |  |  |  |
Gross realized gains |  | $ | 9 |  |  | $ | 2 |
Gross realized losses |  |  | (6 | ) |  |  | (25 | )
Net realized gains (losses) on available-for-sale fixed maturities |  |  | 3 |  |  |  | (23 | )
Limited liability investments |  |  | 238 |  |  |  | 366 |
Limited liability investments, at fair value |  |  | 481 |  |  |  | 608 |
Investments in private companies |  |  | 39 |  |  |  | 258 |
Net realized gains |  | $ | 761 |  |  | $ | 1,209 |
Net gain (loss) on equity investments for the years ended December 31, 2023 and December 31, 2022 is comprised as follows:
(in thousands) |  | Years ended December 31, |
|  | 2023 |  |  | 2022 |
Net gains recognized on equity investments sold during the period |  | $ | 3,383 |  |  | $ | — |
Change in unrealized gains (losses) on equity investments held at end of the period |  |  | 14 |  |  |  | (26 | )
Net gain (loss) on equity investments |  | $ | 3,397 |  |  | $ | (26 | )
Prior to the second quarter of 2023, the Company held 400,000 warrants in Limbach Holdings, Inc. ("Limbach"). During the first quarter of 2023, the underlying common stock price of Limbach increased, resulting in an increase in the fair value of the warrants held at March 31, 2023. During the second quarter of 2023, the Company completed a cashless exercise of its Limbach warrants and received 110,036 shares of Limbach common stock. During the third quarter of 2023, the Company sold all of its Limbach common shares. The Company recorded total gains related to Limbach of $3.3 million during the year ended December 31, 2023.

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