v3.22.2.2
Investments
 9 Months Ended
Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract]  
Investments Investments
Available-for-Sale Securities
The following table provides the amortized cost and fair value of available-for-sale debt securities as of the dates presented (in thousands):
September 30, 2022
Amortized
Cost		Allowance for Expected Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Debt Securities:
  U.S. government obligations and agencies$12,602 $— $— $(1,004)$11,598 
  Corporate bonds781,131 (589)42 (105,221)675,363 
  Mortgage-backed and asset-backed securities332,444 — 63 (42,774)289,733 
  Municipal bonds14,924 — — (2,486)12,438 
  Redeemable preferred stock9,423 (135)— (1,637)7,651 
Total$1,150,524 $(724)$105 $(153,122)$996,783 

December 31, 2021
Amortized
Cost		Allowance for Expected Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Debt Securities:
  U.S. government obligations and agencies$27,076 $— $64 $(334)$26,806 
  Corporate bonds687,058 (371)843 (13,725)673,805 
  Mortgage-backed and asset-backed securities322,844 — 194 (6,920)316,118 
  Municipal bonds14,925 (1)— (350)14,574 
  Redeemable preferred stock9,289 (117)28 (48)9,152 
Total$1,061,192 $(489)$1,129 $(21,377)$1,040,455 

The following table provides the credit quality of available-for-sale debt securities with contractual maturities as of the dates presented (dollars in thousands):
September 30, 2022December 31, 2021
Average Credit RatingsFair Value% of Total
 Fair Value		Fair Value% of Total
 Fair Value
AAA$297,030 29.8 %$321,975 31.0 %
AA150,936 15.2 %139,186 13.4 %
A320,427 32.1 %339,500 32.6 %
BBB225,154 22.6 %234,358 22.5 %
No Rating Available3,236 0.3 %5,436 0.5 %
   Total$996,783 100.0 %$1,040,455 100.0 %

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):
September 30, 2022December 31, 2021
Amortized
Cost		Fair ValueAmortized
Cost		Fair Value
Mortgage-backed securities:
Agency$159,177 $133,795 $147,992 $143,819 
Non-agency61,880 51,242 59,906 58,263 
Asset-backed securities:
Auto loan receivables66,392 63,258 67,352 66,877 
Credit card receivables657 611 4,741 4,719 
Other receivables44,338 40,827 42,853 42,440 
Total$332,444 $289,733 $322,844 $316,118 
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):
September 30, 2022
Less Than 12 Months12 Months or Longer
Number of
Issues		Fair ValueUnrealized
Losses		Number of
Issues		Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies2 $2,720 $(113)5 $8,878 $(891)
Corporate bonds123 136,528 (17,249)173 202,294 (37,753)
Mortgage-backed and asset-backed securities116 121,753 (10,259)96 157,818 (32,515)
Municipal bonds3 2,299 (390)7 10,139 (2,096)
Redeemable preferred stock7 2,167 (427)— — — 
Total251 $265,467 $(28,438)281 $379,129 $(73,255)

December 31, 2021
Less Than 12 Months12 Months or Longer
Number of
Issues		Fair ValueUnrealized
Losses		Number of
Issues		Fair ValueUnrealized
Losses
Debt Securities:
U.S. government obligations and agencies4 $18,913 $(111)4 $5,016 $(223)
Corporate bonds249 378,595 (7,468)18 17,356 (679)
Mortgage-backed and asset-backed securities145 274,883 (5,969)11 23,273 (951)
Municipal bonds5 9,811 (269)— — — 
Redeemable preferred stock1 200 (1)— — — 
Total404 $682,402 $(13,818)33 $45,645 $(1,853)

Unrealized losses on available-for-sale debt securities in the above table as of September 30, 2022 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 BondsMunicipal BondsRedeemable
 Preferred Stock		Total
Balance, December 31, 2020$148 $— $38 $186 
Provision for (or reversal of) credit loss expense223 1 79 303 
Balance, December 31, 2021371 1 117 489 
Provision for (or reversal of) credit loss expense218 (1)18 235 
Balance, September 30, 2022$589 $— $135 $724 

For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available-for-sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by rating agencies, market sentiment and trends and adverse conditions specifically related to the security, among other quantitative and qualitative factors utilized for establishing an estimate for credit losses. If the assessment indicates that a credit loss exists, the present values of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as a provision for (or reversal of) credit loss expense and are reported in general and administrative expenses in the Condensed Consolidated Statements of Income. Losses are charged against the allowance when management believes an available-for-sale debt security is confirmed as uncollected or when either of the criteria regarding intent or requirement to sell is met.
The following table presents the amortized cost and fair value of investments with maturities as of the date presented (in thousands):
September 30, 2022
Amortized CostFair Value
Due in one year or less$67,525 $65,865 
Due after one year through five years557,115 499,715 
Due after five years through ten years496,292 408,509 
Due after ten years27,048 20,640 
Perpetual maturity securities2,544 2,054 
Total$1,150,524 $996,783 

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 in real estate during the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Proceeds from sales and maturities (fair value):
  Available-for-sale debt securities $30,929 $32,320 $84,146 $146,611 
  Equity securities$8,975 $48,486 $26,667 $53,651 
Gross realized gains on sale of securities:
  Available-for-sale debt securities $— $882 $242 $1,899 
  Equity securities$571 $1,315 $1,119 $2,399 
Gross realized losses on sale of securities:
  Available-for-sale debt securities$(210)$(192)$(1,665)$(1,656)
  Equity securities $(69)$— $(71)$— 
Realized gains on sales of investment real estate (1)$— $— $— $401 
(1)
During the first quarter of 2021, the Company completed the sale of a non-income producing 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 Condensed Consolidated Statements of Income for the nine months ended September 30, 2021.
The following table presents the components of net investment income, comprised primarily of interest and dividends, for the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Available-for-sale debt securities$4,847 $2,799 $13,791 $8,393 
Equity securities740 544 1,965 1,787 
Cash and cash equivalents (1)1,069 2 1,324 28 
Other (2)122 274 371 809 
  Total investment income6,778 3,619 17,451 11,017 
Less: Investment expenses (3)(704)(822)(2,114)(2,376)
  Net investment income$6,074 $2,797 $15,337 $8,641 
(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):
Three Months Ended
September 30,		Nine Months Ended
September 30,
2022202120222021
Unrealized gains (losses) recognized during the reported period on equity securities still held at the end of the reported period$(4,150)$(3,418)$(16,387)$(2,391)
Investment Real Estate
Investment real estate consisted of the following as of the dates presented (in thousands):
September 30,December 31,
20222021
Income Producing:
Investment real estate$7,091 $7,091 
Less: Accumulated depreciation(1,339)(1,200)
Investment real estate, net$5,752 $5,891 
The following table provides the depreciation expense related to investment real estate for the periods presented (in thousands):
Three Months Ended
September 30,		Nine Months Ended
September 30,
 2022202120222021
Depreciation expense on investment real estate$46 $47 $139 $139 

Assets Held for Sale as of September 30, 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. The real estate property is located in Pompano Beach, Florida. Proceeds from the sale was expected to exceed the property’s carrying value of $0.3 million and, accordingly, no impairment loss was recognized on the classification of this real estate property as held for sale.
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 Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021.