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Note 6 - Investments

3 Months Ended

Mar. 31, 2024

NOTE 6 INVESTMENTS

The amortized cost, gross unrealized gains and losses included in accumulated other comprehensive loss,and estimated fair value of the Company's available-for-sale investments at March 31, 2024 and December 31, 2023 are summarized in the tables shown below:

(in thousands)	March 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Fixed maturities:
U.S. government, government agencies and authorities	$	13,747	$	—	$	408	$	13,339
States, municipalities and political subdivisions		2,887		—		109		2,778
Mortgage-backed		9,579		8		511		9,076
Asset-backed		1,485		—		41		1,444
Corporate		10,597		7		656		9,948
Total fixed maturities	$	38,295	$	15	$	1,725	$	36,585

(in thousands)	December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair 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

The table below summarizes the Company's fixed maturities at March 31, 2024 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)	March 31, 2024
	Amortized Cost		Estimated Fair Value
Due in one year or less	$	8,250	$	8,102
Due after one year through five years		24,004		22,906
Due after five years through ten years		1,353		1,274
Due after ten years		4,688		4,303
Total	$	38,295	$	36,585

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 March 31, 2024 and December 31, 2023. The tables segregate the holdings based on the period of time the investments have been continuously held in unrealized loss positions.

(in thousands)	March 31, 2024
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss
Fixed maturities:
U.S. government, government agencies and authorities	$	4,960	$	70	$	8,378	$	338	$	13,338	$	408
States, municipalities and political subdivisions		434		2		2,344		107		2,778		109
Mortgage-backed		1,895		23		6,655		488		8,550		511
Asset-backed		365		1		981		40		1,346		41
Corporate		1,031		12		7,790		644		8,821		656
Total fixed maturities	$	8,685	$	108	$	26,148	$	1,617	$	34,833	$	1,725

(in thousands)	December 31, 2023
	Less than 12 Months				Greater than 12 Months				Total
	Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized Loss		Estimated Fair Value		Unrealized 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

At March 31, 2024 and December 31, 2023, there are approximately 201 and 181 individual available-for-sale investments that were in unrealized loss positions, for which an allowance for credit losses has 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 March 31, 2024 and 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 March 31, 2024 and December 31, 2023. .

The Company did not record any write-downs for impairment related to investments for the three months ended March 31, 2024 and March 31, 2023.

The Company does not have any exposure to subprime mortgage-backed investments.

Limited liability investments include investments in limited liability companies and limited partnerships. The Company's interests in these investments are not deemed minor and, therefore, are accounted for under the equity method of accounting. The most recently available financial statements are used in applying the equity method. The difference between the end of the reporting period of the limited liability entities and that of the Company is no more than three months. As of March 31, 2024 and December 31, 2023, the carrying value of limited liability investments totaled $0.8 million. The Company recorded no impairments related to limited liability investments during the three months ended March 31, 2024 and March 31, 2023. Income or loss from limited liability investments is recognized based on the Company's share of the earnings of the limited liability entities and is included in net investment income in the consolidated statements of operations. At March 31, 2024, the Company had no unfunded commitments related to limited liability investments.

Limited liability investment, at fair value represents the underlying investments of the Company’s consolidated entity Argo Holdings Fund I, LLC ("Argo Holdings"). As of March 31, 2024 and December 31, 2023, the carrying value of the Company's limited liability investment, at fair value was $3.5 million. At March 31, 2024, the Company had no unfunded commitments to fund limited liability investments, at fair value.

Investments in private companies consist of convertible preferred stocks and notes in privately owned companies and investments in limited liability companies in which the Company’s interests are deemed minor. The Company's investments in private companies do not have readily determinable fair values. The Company has elected to record investments in private companies at cost, adjusted for observable price changes and impairments. As of March 31, 2024 and December 31, 2023, the carrying value of the Company's investments in private companies totaled $0.9 million. For the three months ended March 31, 2024 and March 31, 2023, the Company did not record any adjustments to the fair value of its investments in private companies for observable price changes.

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 three months ended March 31, 2024 and March 31, 2023.

Net investment income for the three months ended March 31, 2024 and March 31, 2023 is comprised as follows:

(in thousands)	Three months ended March 31,
	2024			2023
Investment income:
Interest from fixed maturities	$	312		$	229
Dividends		12			60
Loss from limited liability investments		(60	)		(34	)
Other		93			520
Gross investment income		357			775
Investment expenses		(31	)		(37	)
Net investment income	$	326		$	738

Net realized gains on investments for the three months ended March 31, 2024 and March 31, 2023 are comprised as follows:

(in thousands)	Three months ended March 31,
	2024		2023
Available-for-sale fixed maturities:
Gross realized gains	$	—	$	2
Gross realized losses		—		—
Net realized gains on available-for-sale fixed maturities		—		2
Limited liability investments		—		98
Limited liability investments, at fair value		115		110
Investments in private companies		9		—
Net realized gains	$	124	$	210

Net (loss) gain on equity investments for the three months ended March 31, 2024 and March 31, 2023 is comprised as follows:

(in thousands)	Three months ended March 31,
	2024			2023
Net losses recognized on equity investments sold during the period	$	(3	)	$	—
Change in net unrealized gains recognized on equity investments held at end of the period		—			1,075
Net (loss) gain on equity investments	$	(3	)	$	1,075

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 third quarter of 2023, the Company sold its investment in Limbach.