N OTES TO C O NSOL IDAT ED FINANC IAL S T ATE ME NTS D E C EM B E R 31, 2 0 1 9 AND 2 0 1 8 (Dollars In Thousands, Unless O therwise Noted)
28
LESS THAN 12 MONTHS FAIR VALUE
December 31, 2018: Fixed income securities: U.S. Treasury securities and obligations of U.S. government corporations and agencies $ 1,337 Obligations of states and political subdivisions 2,012 Corporate securities 9,384 Mortgage-backed and asset-backed securities 23,895 Total fixed income securities $ 36,628
12 MONTHS OR MORE
UNREALIZED LOSSES
$
(8)
FAIR VALUE
$
—
UNREALIZED LOSSES
$ —
TOTAL FAIR VALUE
$ 1,337
UNREALIZED LOSSES
$
(8)
(37) (133)
79 1,010
(4) (19)
2,091 10,394
(41) (152)
(296)
2,466
(55)
26,361
(351)
$ (474)
$ 3,555
$ (78)
$ 40,183
$ (552)
Note 3: Fair Value Measurements The Company measures fair value by categorizing assets and liabilities based upon the level of judgment associated with the inputs to measure their fair value. These levels are: Level 1 - Inputs that are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level 2 - Inputs other than quoted process included in Level 1 that are observable for the asset or liability through corroboration with market data at the measurement date. Level 3 - Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. The fair values for securities included in Level 1 are based on observable inputs either directly or indirectly, such as quoted prices in markets that are active, quoted prices for similar securities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable. The Company classifies its investment in U.S. Treasury securities and common stocks as Level 1 assets. The fair values for securities included in Level 2 are based upon fair values generated by external pricing models that vary by asset class and incorporate available trade, bid and other market information, as well as price quotes from other independent market participants which reflect fair value of that particular security. The Company considers its investments in U.S. government agency bonds, municipal bonds, corporate bonds, mortgage-backed and assetbacked securities, and one convertible bond as Level 2 assets. In classifying the mortgage-backed and asset-backed securities owned as Level 2 securities, the Company considers the inputs as follows: a. Quoted prices for similar assets or liabilities in active markets. b. Quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the assets or liabilities, the prices are not current, or price quotations vary substantially either over time or among