Investments | Note 5 — Investments a) Available-for-Sale The Company holds investments in fixed-maturity securities that are classified as available-for-sale. available-for-sale Cost or Gross Gross Estimated Value As of December 31 , 2018 U.S. Treasury and U.S. government agencies $ 61,979 $ 24 $ (206 ) $ 61,797 Corporate bonds 103,580 134 (1,809 ) 101,905 State, municipalities, and political subdivisions 10,567 98 (3 ) 10,662 Exchange-traded debt 8,426 82 (261 ) 8,247 Redeemable preferred stock 118 — (6 ) 112 Total $ 184,670 $ 338 $ (2,285 ) $ 182,723 As of December 31 , 2017 U.S. Treasury and U.S. government agencies $ 42,313 $ 1 $ (287 ) $ 42,027 Corporate bonds 106,897 1,110 (904 ) 107,103 State, municipalities, and political subdivisions 78,954 1,816 (75 ) 80,695 Exchange-traded debt 7,469 197 (7 ) 7,659 Total $ 235,633 $ 3,124 $ (1,273 ) $ 237,484 Expected maturities will differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without penalties. The scheduled contractual maturities of fixed-maturity securities at December 31, 2018 and 2017 are as follows: December 31, 2018 2017 Cost or Amortized Cost Estimated Fair Value Cost or Amortized Cost Estimated Fair Value Available-for-sale Due in one year or less $ 50,659 $ 50,574 $ 35,386 $ 35,364 Due after one year through five years 117,826 116,498 116,378 115,766 Due after five years through ten years 11,602 11,253 57,415 58,984 Due after ten years 4,583 4,398 26,454 27,370 $ 184,670 $ 182,723 $ 235,633 $ 237,484 Sales of Available-for-Sale Fixed-Maturity Securities Proceeds received, and the gross realized gains and losses from sales of available-for-sale fixed-maturity securities, for the years ended December 31, 2018, 2017 and 2016 were as follows: Proceeds Gross Realized Gains Gross Realized Losses Year ended December 31, 2018 $ 81,809 $ 1,293 $ (570 ) Year ended December 31, 2017 $ 31,759 $ 2,176 $ (181 ) Year ended December 31, 2016 $ 40,454 $ 604 $ (79 ) Other-than-temporary Impairment The Company regularly reviews its individual investment securities for other-than-temporary impairment. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including- • the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings; • the length of time and the extent to which the market value of the security has been below its cost or amortized cost; • general market conditions and industry or sector specific factors and other qualitative factors; • nonpayment by the issuer of its contractually obligated interest and principal payments; and • the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs. For the year ended December 31, 2018, the Company recognized $80 of impairment loss on one fixed-maturity security in the consolidated statement of income. For the year ended December 31, 2017, the Company recognized impairment losses of $428 related to the sale of four intent-to-sell fixed-maturity securities. For the year ended December 31, 2016, the Company recognized $1,565 of impairment losses on four fixed-maturity securities, representing $1,335 of additional losses recorded during the period and $230 of the net change recorded in other comprehensive income. The following table presents a rollforward of the cumulative credit losses in other-than-temporary impairments recognized in income for available-for-sale fixed-maturity securities: 2017 2016 Balance at January 1 $ 475 $ 111 Credit impairments on impaired securities — 475 Additional credit impairments on previously impaired securities — 293 Credit impaired security fully disposed of for which there was no prior intent or requirement to sell (475 ) (385 ) Reduction due to increase in expected cash flows recognized over the remaining life of the previously impaired security — (19 ) Balance at December 31 $ — $ 475 There was no activity related to cumulative credit losses during 2018. During 2017, the Company sold two Securities with gross unrealized loss positions at December 31, 2018 and 2017, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows: Less Than Twelve Months Twelve Months or Longer Total As of December 31, 2018 Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value U.S. Treasury and U.S. government agencies $ (59 ) $ 21,031 $ (147 ) $ 35,393 $ (206 ) $ 56,424 Corporate bonds (542 ) 19,932 (1,267 ) 36,682 (1,809 ) 56,614 State, municipalities, and political subdivisions (3 ) 715 — — (3 ) 715 Exchange-traded debt (261 ) 5,275 — — (261 ) 5,275 Redeemable preferred stock (6 ) 112 — — (6 ) 112 Total available-for-sale securities $ (871 ) $ 47,065 $ (1,414 ) $ 72,075 $ (2,285 ) $ 119,140 At December 31, 2018, there were 82 securities in an unrealized loss position. Of these securities, 35 securities had been in an unrealized loss position for 12 months or longer. Less Than Twelve Months Twelve Months or Longer Total As of December 31, 2017 Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value Gross Unrealized Loss Estimated Fair Value U.S. Treasury and U.S. government agencies $ (246 ) $ 40,587 $ (41 ) $ 1,938 $ (287 ) $ 42,525 Corporate bonds (174 ) 40,627 (730 ) 30,563 (904 ) 71,190 State, municipalities, and political subdivisions (30 ) 9,775 (45 ) 2,297 (75 ) 12,072 Exchange-traded debt (6 ) 2,481 (1 ) 36 (7 ) 2,517 Total available-for-sale securities $ (456 ) $ 93,470 $ (817 ) $ 34,834 $ (1,273 ) $ 128,304 At December 31, 2017, there were 77 securities in an unrealized loss position. Of these securities, 15 securities had been in an unrealized loss position for 12 months or longer. b) Equity Securities The Company holds investments in equity securities measured at fair values which are readily determinable. At December 31, 2018 and 2017, the cost, gross unrealized gains and losses, and estimated fair value of the Company’s equity securities were as follows: Cost Gross Unrealized Gain Gross Unrealized Loss Estimated Fair Value December 31, 2018 $ 45,671 $ 1,059 $ (5,587 ) $ 41,143 December 31, 2017 $ 54,282 $ 6,383 $ (709 ) $ 59,956 The table below presents the portion of unrealized gains and losses in the Company’s consolidated statement of income for the periods related to equity securities still held. Year Ended December 31, 2018 Net losses recognized $ (4,811 ) Less: Net realized gains recognized for securities sold 5,391 Net unrealized losses recognized* $ (10,202 ) * Unrealized holding gains and losses for the comparative years in 2017 and 2016 were reported in accumulated other comprehensive income. See Adoption of New Accounting Standards in Note 2 — “Summary of Significant Accounting Policies” for additional information. Sales of Equity Securities Proceeds received, and the gross realized gains and losses from sales of equity securities, for the years ended December 31, 2018 and 2017 were as follows: Proceeds Gross Realized Gains Gross Realized Losses Year ended December 31, 2018 $ 66,439 $ 7,324 $ (1,933 ) Year ended December 31, 2017 $ 45,282 $ 3,993 $ (1,642 ) Year ended December 31, 2016 $ 23,127 $ 2,656 $ (580 ) Other-than-temporary Impairment before 2018 Prior to the adoption of ASU 2016-01 available-for-sale available-for-sale c) Limited Partnership Investments The Company has interests in limited partnerships that are not registered or readily tradeable on a securities exchange. These partnerships are private equity funds managed by general partners who make decisions with regard to financial policies and operations. As such, the Company is not the primary beneficiary and does not consolidate these partnerships. In February 2018, the Company entered into a subscription agreement to invest $5,000 with a limited partnership specializing in real estate private equity funds and portfolios. Subsequently, in September 2018, the Company increased its aggregate investment commitment with this limited partnership to $10,000. The following table provides information related to the Company’s investments in limited partnerships: December 31, 2018 December 31, 2017 Investment Strategy Carrying Value Unfunded Balance (%) (a) Carrying Value Unfunded Balance (%) (a) Primarily in senior secured loans and, to a limited extent, in other debt and equity securities of private U.S. lower-middle-market companies. (b)(c)(e) $ 10,169 $ 2,577 15.37 $ 7,276 $ 5,505 15.37 Value creation through active distressed debt investing primarily in bank loans, public and private corporate bonds, asset-backed securities, and equity securities received in connection with debt restructuring. (b)(d)(e) 9,219 — 1.76 7,951 1,745 1.76 High returns and long-term capital appreciation through investments in the power, utility and energy industries, and in the infrastructure sector. (b)(f)(g) 9,023 2,329 0.18 7,509 2,512 0.18 Value-oriented investments in less liquid and mispriced senior and junior debts of private equity-backed companies. (b)(h)(i) 1,156 3,706 0.47 448 4,566 0.47 Value-oriented investments in mature real estate private equity funds and portfolios globally. (b)(j) 2,726 7,692 3.28 — — — Total $ 32,293 $ 16,304 $ 23,184 $ 14,328 (a) Represents the Company’s percentage investment in the fund at each balance sheet date. (b) Except under certain circumstances, withdrawals from the funds or any assignments are not permitted. Distributions, except income from late admission of a new limited partner, will be received when underlying investments of the funds are liquidated. (c) Expected to have a ten-year term and the capital commitment is expected to expire on September 3, 2019. (d) Expected to have a three-year term from June 30, 2018. Although the capital commitment period already ended, the general partner could still request an additional funding of approximately $843 under certain circumstances. (e) At the fund manager’s discretion, the term of the fund may be extended for up to two additional one-year periods. (f) Expected to have a ten-year term and the capital commitment is expected to expire on June 30, 2020. (g) With the consent of a supermajority of partners, the term of the fund may be extended for up to three additional one-year periods. (h) Expected to have a six-year term from the commencement date, which can be extended for up to two additional one-year periods with the consent of either the advisory committee or a majority of limited partners. (i) Unless extended or terminated for reasons specified in the agreement, the capital commitment is expected to expire on December 1, 2019. (j) Expected to have an eight-year term after the final fund closing date, which has yet to be determined. The following is the aggregated summarized unaudited financial information of limited partnerships included in the investment strategy table above, which in certain cases is presented on a three-month lag due to the unavailability of information at the Company’s respective balance sheet dates. In applying the equity method of accounting, the Company uses the most recently available financial information provided by the general partner of each of these partnerships. The financial statements of these limited partnerships are audited annually. Years Ended December 31, 2018 2017 2016 Operating results: Total income $ 1,821,935 $ 409,169 $ 310,998 Total expenses 146,079 105,281 185,126 Net income (loss) $ 1,675,856 $ 303,888 $ 125,872 December 31, 2018 2017 Balance Sheet: Total assets $ 6,689,792 $ 4,381,321 Total liabilities $ 394,029 $ 382,310 For the years ended December 31, 2018, 2017 and 2016, the Company recognized net investment income of $4,430, $2,334 and $1,207, respectively, for these investments. At December 31, 2018 and 2017, the Company’s cumulative contributed capital to the partnerships existing at each respective balance sheet date totaled $28,354 and $21,172, respectively, and the Company’s maximum exposure to loss aggregated $32,293 and $23,184, respectively. During the year ended December 31, 2018, the Company received in cash a return on investment of $2,345 and a return of capital of $158. During the year ended December 31, 2017, the Company received total cash distributions of $12,639, representing $11,758 of returned capital and $881 of return on investment. Included in the return of capital was $11,626 from one limited partnership the Company withdrew from in February 2017. During the year ended December 31, 2016, the Company received in cash $544 of return on investment. For the years ended December 31, 2018, 2017 and 2016, the Company recognized its share of earnings or losses based on the respective partnership’s statement of income. The carrying value of these investments approximates the amount the Company expected to recover at December 31, 2018 and 2017. d) Investment in Unconsolidated Joint Venture Melbourne FMA, LLC, a wholly owned subsidiary, currently has a 90% equity interest in FMKT Mel JV, LLC (“FMJV”), a Florida limited liability company treated as a joint venture under U.S. GAAP. FMJV is deemed a variable interest entity due to its lack of sufficient equity to finance its operations without direct or indirect additional financial support from parties to the joint venture. Although Melbourne FMA holds a majority interest in FMJV, certain major economic decisions specified in the agreement are not under Melbourne FMA’s control. As a result, Melbourne FMA is not the primary beneficiary and is not required to consolidate FMJV. In January 2016, FMJV sold a portion of its outparcel land for gross proceeds of $829, of which $515 was used to repay a portion of the construction loan obtained for its real estate development project. FMJV recognized a $404 gain on the outparcel sale of which $383 was allocated to the Company in accordance with the profit allocation specified in the operating agreement. On December 15, 2016, FMJV distributed its entire equity interest in FMKT Mel Manager, LLC (“FMKT MGA”), its wholly owned subsidiary, to Melbourne FMA and the other member, each of which received 90% and 10%, respectively. In addition to operating a retail shopping center business, FMKT MGA owned land which included two outparcels. Melbourne FMA accounted for this transaction as a business step acquisition using the fair value method and, as a result, recognized a $4,005 gain on remeasurement of previously held interest. The gain represented the difference between the fair value of the 90% equity interest and its carrying value under the equity method. The fair value of the equity interest was comprised of the fair value of FMKT MGA’s underlying assets primarily determined by an independent appraiser offset by the fair value of liabilities assumed on the date of distribution. Inputs used by the appraiser included, but were not limited to, information about market and surrounding environments, demographics, and the sale or rent of similar types of property within the vicinity. Due to their short-term nature, the carrying value of current assets and assumed liabilities, including a variable interest rate revolving credit line, approximated fair value. See Pineda Landings - Melbourne, Florida In March 2017, FMJV sold a portion of its outparcel land for gross proceeds of $825 and recognized a $331 gain on sale of which $199 was allocated to the Company in accordance with the profit allocation specified in the operating agreement. During 2017, FMKT MGA was merged with Melbourne FMA, LLC. In June 2018, FMJV sold one of its outparcels for $849 and recognized a gain of $438. At December 31, 2018 and 2017, the Company’s maximum exposure to loss relating to the variable interest entity was $845 and $1,304, respectively, representing the carrying value of the investment. At December 31, 2018 and 2017, there was no undistributed income from this equity method investment. There was an undistributed loss, after an equity distribution, of $25 at December 31, 2016, the amounts of which were included in the Company’s consolidated retained income. For the year ended December 31, 2018, the Company received a cash distribution of $763, representing a combined distribution of $68 in earnings and $695 in capital. For the year ended December 31, 2017, the Company received a cash distribution of $564, representing a combined distribution of $147 in earnings and $417 in capital. The limited liability company members received no cash distributions during 2016. The following tables provide FMJV’s summarized unaudited financial results and the unaudited financial positions: Years Ended December 31, 2018 2017 2016 Operating results: Total revenues $ 438 $ 331 $ — Total expenses 100 483 — Net income (loss) $ 338 $ (152 ) $ — The Company’s share of net income (loss) (a) $ 304 $ (234 ) $ — (a) Included in net investment income in the Company’s consolidated statements of income. Gain from the sale of the outparcel during 2017 was allocated in accordance with the method specified in the operating agreement. December 31, 2018 2017 Balance Sheet: Construction in progress—real estate $ — $ 27 Property and equipment, net 787 1,199 Cash 149 236 Other 5 5 Total assets $ 941 $ 1,467 Other liabilities $ 3 $ 18 Members’ capital 938 1,449 Total liabilities and members’ capital $ 941 $ 1,467 Investment in unconsolidated joint venture, at equity* $ 845 $ 1,304 * Included the 90% share of FMKT Mel JV’s operating results. In 2017, FMJV decided to terminate its development plan for nearby land, thereby expensing $382 of deferred costs associated with the land feasibility study. FMJV’s assets at December 31, 2018 and 2017 included primarily outparcels for sale or lease which have increased in value since the adjacent retail shopping center was completed. The Company determined that there was no impairment loss associated with these assets for the years ended December 31, 2018 and 2017. e) Assets Held for Sale On November 5, 2018, Greenleaf Capital, LLC, the Company’s wholly-owned subsidiary, listed its 10-acre waterfront property in Treasure Island, Florida for sale. The property primarily consists of land, commercial and marina buildings. This property, which is owned by the real estate division, was reclassified from real estate investments to assets held for sale in the Company’s consolidated balance sheet. The recording of depreciation on the buildings ceased November 5, 2018 resulting in a $34 decrease in depreciation expense in 2018 compared with 2017. f) Real Estate Investments Real estate investments include buildings with office and retail space for lease, outparcels, and one marina. Real estate investments consist of the following as of December 31, 2018 and 2017: December 31, 2018 2017 Land $ 23,884 $ 26,315 Land improvements 8,717 9,904 Building 19,201 21,284 Tenant and leasehold improvements 1,261 1,204 Other 5,266 3,050 Total, at cost 58,329 61,757 Less: accumulated depreciation and amortization (3,839 ) (3,399 ) Real estate investments $ 54,490 $ 58,358 In November 2018, the Company reclassified a net carrying value of $9,810 from real estate investments to assets held for sale. On June 13, 2018, the Company, through a wholly owned subsidiary, acquired commercial real estate in Clearwater, Florida, including assumed liabilities of $35, for a purchase price of $6,766. The real estate consisted of land, one in-place On October 17, 2017, the Company, through a wholly owned subsidiary, acquired commercial real estate in Tampa, Florida for a purchase price of $9,100. The acquired assets primarily consisted of land, building and in-place 2017-01 Depreciation and amortization expense related to real estate investments was $1,536, $1,447 and $531, respectively, for the years ended December 31, 2018, 2017 and 2016. g) Consolidated Variable Interest Entity The Company has a commercial property in Riverview, Florida which was developed by a limited liability company treated under U.S. GAAP as a joint venture. On January 26, 2018, the Company gained full ownership of this limited liability company by acquiring the noncontrolling interest for $539 which was reported in the Company’s consolidated statement of stockholders’ equity. Prior to the acquisition date, the Company already consolidated this limited liability company as its primary beneficiary. As a result, the acquisition was accounted for as an equity transaction. No gain or loss was recognized as there was no change in control. Real estate investments owned by this limited liability company primarily include a retail strip center with 8,400 square feet of net rentable space and an adjacent parcel of land which is currently leased in its entirety to a large gas station and convenience store chain. The following table summarizes the assets and liabilities related to this variable interest entity which are included in the accompanying consolidated balance sheets as of December 31, 2017. Real estate investments $ 4,680 Other assets $ 152 Accrued expenses $ 21 Other liabilities $ 160 h) Net Investment Income Net investment income (loss), by source, is summarized as follows: Years Ended December 31, 2018 2017 2016 Available-for-sale securities: Fixed-maturity securities $ 5,104 $ 5,689 $ 4,589 Equity securities 2,124 3,318 3,452 Investment expense (581 ) (726 ) (651 ) Limited partnership investments 4,430 2,334 1,207 Real estate investments 340 (1,018 ) (592 ) Income (loss) from unconsolidated joint venture 304 (234 ) — Cash and cash equivalents 3,485 2,069 1,036 Short-term investments 1,375 — — Other — 7 46 Net investment income $ 16,581 $ 11,439 $ 9,087 At December 31, 2018, $180,508 or 75.4% of the Company’s cash and cash equivalents were deposited at three national banks and included $73,511 in two custodial accounts. At December 31, 2017, $87,092 or 34.1% of the Company’s cash and cash equivalents were deposited at three national banks and included $38,543 in three custodial accounts. At December 31, 2018 and 2017, the Company’s cash deposits at any one bank generally exceed the Federal Deposit Insurance Corporation’s $250 coverage limit for insured deposit accounts. |