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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2020
or
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______
 
Commission File Number: 001-36777
JAMES RIVER GROUP HOLDINGS, LTD.
 
(Exact name of registrant as specified in its charter)
Bermuda 98-0585280
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
Wellesley House, 2nd Floor, 90 Pitts Bay Road, Pembroke HM08, Bermuda
(Address of principal executive offices)
(Zip Code)
(441) 278-4580
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Names of each exchange on which registered
Common Shares, par value $0.0002 per shareJRVRNASDAQGlobal Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   x    No   ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filerNon-accelerated filer Smaller reporting companyEmerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes       No   x
Number of shares of the registrant's common shares outstanding at July 28, 2020: 30,553,178



James River Group Holdings, Ltd.
Form 10-Q
Index
 Page
Number
 
   
 
   
 
   
 
   
 
   
 
   
 
   
   
 
   
   
  
 
   
  
 
2


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This Quarterly Report on Form 10-Q, or Quarterly Report, contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may be identified by the fact that they do not relate strictly to historical or current facts. You may identify forward-looking statements in this Quarterly Report by the use of words such as “anticipates,” “estimates,” “expects,” “intends,” “plans”, “seeks” and “believes,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” These forward-looking statements include, among others, all statements relating to our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
 
Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements included in this Quarterly Report as a result of various factors, many of which are beyond our control, including, among others:
 
the inherent uncertainty of estimating reserves and the possibility that incurred losses may be greater than our loss and loss adjustment expense reserves;
inaccurate estimates and judgments in our risk management may expose us to greater risks than intended;
the potential loss of key members of our management team or key employees and our ability to attract and retain personnel;
adverse economic factors resulting in the sale of fewer policies than expected or an increase in the frequency or severity of claims, or both;
a decline in our financial strength rating resulting in a reduction of new or renewal business;
reliance on a select group of brokers and agents for a significant portion of our business and the impact of our potential failure to maintain, such relationships;
reliance on a select group of customers for a significant portion of our business and the impact of our potential failure to maintain, or decision to terminate, such relationships;
losses resulting from reinsurance counterparties failing to pay us on reinsurance claims, insurance companies with whom we have a fronting arrangement failing to pay us for claims, or an insured group of companies with whom we have an indemnification arrangement failing to perform their reimbursement obligations;
changes in laws or government regulation, including tax or insurance law and regulations;
the ongoing effect of Public Law No. 115-97, informally titled the Tax Cuts and Jobs Act, which may have a significant effect on us including, among other things, by potentially increasing our tax rate, as well as taxes on our shareholders;
in the event we do not qualify for the insurance company exception to the passive foreign investment company (“PFIC”) rules and are therefore considered a PFIC, there could be material adverse tax consequences to an investor that is subject to U.S. federal income taxation;
the Company or any of its foreign subsidiaries becoming subject to U.S. federal income taxation;
a failure of any of the loss limitations or exclusions we utilize to shield us from unanticipated financial losses or legal exposures, or other liabilities;
losses from catastrophic events, such as natural disasters and terrorist acts, which substantially exceed our expectations and/or exceed the amount of reinsurance we have purchased to protect us from such events;
the effects of the COVID-19 pandemic and associated government actions on our operations and financial  performance;
potential effects on our business of emerging claim and coverage issues;
exposure to credit risk, interest rate risk and other market risk in our investment portfolio;
our ability to obtain reinsurance coverage at prices and on terms that allow us to transfer risk and adequately protect our company against financial loss;
3


the potential impact of internal or external fraud, operational errors, systems malfunctions or cyber security incidents;
our ability to manage our growth effectively;
inadequacy of premiums we charge to compensate us for our losses incurred;
failure to maintain effective internal controls in accordance with Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”); and​​
changes in our financial condition, regulations or other factors that may restrict our subsidiaries’ ability to pay us dividends.
Additional information about these risks and uncertainties, as well as others that may cause actual results to differ materially from those in the forward-looking statements, is contained in Part II, Item 1A "Risk Factors" in this Quarterly Report, and our filings with the U.S. Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K filed with the SEC on February 27, 2020.
Forward-looking statements speak only as of the date of this Quarterly Report. Except as expressly required under federal securities laws and the rules and regulations of the SEC, we do not have any obligation, and do not undertake, to update any forward-looking statements to reflect events or circumstances arising after the date of this Quarterly Report, whether as a result of new information or future events or otherwise. You should not place undue reliance on the forward-looking statements included in this Quarterly Report or that may be made elsewhere from time to time by us, or on our behalf. All forward-looking statements attributable to us are expressly qualified by these cautionary statements.

4

Table of Contents
 
PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements
 
 
JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES
 
Condensed Consolidated Balance Sheets
(Unaudited) June 30,
2020
December 31,
2019
 (in thousands)
Assets  
Invested assets:  
Fixed maturity securities, available-for-sale, at fair value (amortized cost: 2020 – $1,664,382; 2019 – $1,398,533)
$1,747,404  $1,433,626  
Equity securities, at fair value (cost:  2020 – $79,823; 2019 – $73,244)
78,045  80,735  
Bank loan participations (2020: at fair value; 2019: held-for-investment, at amortized cost, net of allowance)127,698  260,864  
Short-term investments96,265  156,925  
Other invested assets47,463  61,210  
Total invested assets2,096,875  1,993,360  
Cash and cash equivalents204,309  206,912  
Restricted cash equivalents1,020,856  1,199,164  
Accrued investment income14,387  13,597  
Premiums receivable and agents’ balances, net339,822  369,462  
Reinsurance recoverable on unpaid losses, net727,102  668,045  
Reinsurance recoverable on paid losses43,308  33,221  
Prepaid reinsurance premiums215,285  178,976  
Deferred policy acquisition costs57,898  62,006  
Intangible assets, net36,642  36,940  
Goodwill181,831  181,831  
Other assets70,886  80,891  
Total assets$5,009,201  $5,024,405  
 
See accompanying notes.
 

5

Table of Contents
 
JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES
 
Condensed Consolidated Balance Sheets (continued)
  
(Unaudited) June 30,
2020
December 31,
2019
 (in thousands, except share amounts)
Liabilities and Shareholders’ Equity  
Liabilities:  
Reserve for losses and loss adjustment expenses$2,066,971  $2,045,506  
Unearned premiums566,443  524,377  
Payables to reinsurers109,908  108,059  
Funds held1,020,856  1,199,164  
Senior debt217,300  158,300  
Junior subordinated debt104,055  104,055  
Accrued expenses53,262  58,416  
Other liabilities74,695  47,947  
Total liabilities4,213,490  4,245,824  
Commitments and contingent liabilities    
Shareholders’ equity:  
Common Shares – 2020 and 2019: $0.0002 par value; 200,000,000 shares authorized; 30,553,178 and 30,424,391 shares issued and outstanding, respectively
6  6  
Preferred Shares – 2020 and 2019: $0.00125 par value; 20,000,000 shares authorized; no shares issued and outstanding
    
Additional paid-in capital660,427  657,875  
Retained earnings61,770  89,586  
Accumulated other comprehensive income73,508  31,114  
Total shareholders’ equity795,711  778,581  
Total liabilities and shareholders’ equity$5,009,201  $5,024,405  
 
See accompanying notes.

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 JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES
 
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Unaudited)

 Three Months Ended
June 30,
Six Months Ended
June 30,
 2020201920202019
 (in thousands, except share amounts)
Revenues    
Gross written premiums$301,639  $380,003  $585,480  $707,337  
Ceded written premiums(135,882) (140,093) (285,069) (259,686) 
Net written premiums165,757  239,910  300,411  447,651  
Change in net unearned premiums(16,942) (40,796) (5,678) (58,385) 
Net earned premiums148,815  199,114  294,733  389,266  
Net investment income15,350  17,535  36,186  36,966  
Net realized and unrealized gains (losses) on investments21,593  1,063  (36,814) 2,688  
Other income991  2,662  2,928  5,581  
Total revenues186,749  220,374  297,033  434,501  
Expenses   
Losses and loss adjustment expenses98,746  147,053  195,602  286,980  
Other operating expenses43,397  44,843  95,018  90,595  
Other expenses1,732  683  1,732  683  
Interest expense2,965  2,684  5,841  5,492  
Amortization of intangible assets149  149  298  298  
Total expenses146,989  195,412  298,491  384,048  
Income (loss) before taxes39,760  24,962  (1,458) 50,453  
Income tax expense (benefit)4,146  4,655  (257) 7,418  
Net income (loss)35,614  20,307  (1,201) 43,035  
Other comprehensive income:   
Net unrealized gains, net of taxes of $6,927 and $5,535 in 2020 and $1,865 and $3,311 in 2019
46,313  20,732  42,394  40,992  
Total comprehensive income$81,927  $41,039  $41,193  $84,027  
Per share data:   
Basic earnings (loss) per share$1.17  $0.67  $(0.04) $1.43  
Diluted earnings (loss) per share$1.16  $0.66  $(0.04) $1.41  
Dividend declared per share$0.30  $0.30  $0.60  $0.60  
Weighted-average common shares outstanding:   
Basic30,529,241  30,246,420  30,502,774  30,153,426  
Diluted30,782,609  30,689,074  30,502,774  30,581,205  

 
See accompanying notes.
 

 
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JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)


 
 Number of
Common
Shares
Outstanding
Common
Shares (Par)
Preferred
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive Income (Loss)
Total
 (in thousands, except share amounts)
Balances at March 31, 2020
30,520,428  $6  $  $657,704  $35,412  $27,195  $720,317  
Net income—  —  —  —  35,614  —  35,614  
Other comprehensive income—  —  —  —  —  46,313  46,313  
Dividends—  —  —  —  (9,256) —  (9,256) 
Exercise of stock options29,141  —  —  838  —  —  838  
Vesting of RSUs3,609  —  —  (25) —  —  (25) 
Compensation expense under share incentive plans—  —  —  1,910  —  —  1,910  
Balances at June 30, 202030,553,178  $6  $  $660,427  $61,770  $73,508  $795,711  
Balances at December 31, 201930,424,391  $6  $  $657,875  $89,586  $31,114  $778,581  
Net loss—  —  —  —  (1,201) —  (1,201) 
Other comprehensive income—  —  —  —  —  42,394  42,394  
Dividends—  —  —  —  (18,523) —  (18,523) 
Exercise of stock options29,141  —  —  838  —  —  838  
Vesting of RSUs99,646  —  —  (2,063) —  —  (2,063) 
Compensation expense under share incentive plans—  —  —  3,777  —  —  3,777  
Cumulative effect of fair value option election (see Note 1)—  —  —  —  (7,827) —  (7,827) 
Cumulative effect of adoption of ASU No. 2016-13 (see Note 1)—  —  —  —  (265) —  (265) 
Balances at June 30, 202030,553,178  $6  $  $660,427  $61,770  $73,508  $795,711  
 
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JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES

Condensed Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)


 Number of
Common
Shares
Outstanding
Common
Shares (Par)
Preferred
Shares
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
 (in thousands, except share amounts)
Balances at March 31, 201930,162,045  $6  $  $648,242  $101,617  $4,432  $754,297  
Net income—  —  —  —  20,307  —  20,307  
Other comprehensive income—  —  —  —  —  20,732  20,732  
Dividends—  —  —  —  (9,195) —  (9,195) 
Exercise of stock options166,963  —  —  3,099  —  —  3,099  
Vesting of RSUs1,667  —  —    —  —    
Compensation expense under share incentive plans—  —  —  1,810  —  —  1,810  
Balances at June 30, 201930,330,675  $6  $  $653,151  $112,729  $25,164  $791,050  
Balances at December 31, 201829,988,460  $6  $  $645,310  $79,753  $(15,828) $709,241  
Net income—  —  —  —  43,035  —  43,035  
Other comprehensive income—  —  —  —  —  40,992  40,992  
Dividends—  —  —  —  (18,339) —  (18,339) 
Exercise of stock options265,938  —  —  5,731  —  —  5,731  
Vesting of RSUs76,277  —  —  (1,374) —  —  (1,374) 
Compensation expense under share incentive plans—  —  —  3,484  —  —  3,484  
Adoption of ASU No. 2016-02, derecognition of build-to-suit lease
—  —  —  8,280  —  8,280  
Balances at June 30, 201930,330,675  $6  $  $653,151  $112,729  $25,164  $791,050  

See accompanying notes.
 
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 JAMES RIVER GROUP HOLDINGS, LTD. AND SUBSIDIARIES
 
Condensed Consolidated Statements of Cash Flows (Unaudited)

 Six Months Ended June 30,
 20202019
 (in thousands)
Operating activities  
Net cash (used in) provided by operating activities (a)$(136,231) $68,123  
Investing activities  
Securities available-for-sale:  
Purchases – fixed maturity securities(368,975) (260,853) 
Sales – fixed maturity securities9,432  91,537  
Maturities and calls – fixed maturity securities92,395  64,905  
Purchases – equity securities(9,993) (3,977) 
Sales – equity securities3,295  263  
Bank loan participations:  
Purchases(24,107) (46,327) 
Sales103,933  27,920  
Maturities17,238  25,565  
Other invested assets:  
Purchases(438)   
Return of capital251  1,266  
Redemptions13,612  3,000  
Short-term investments, net60,660  57,503  
Securities receivable or payable, net19,098  1,925  
Purchases of property and equipment(211) (197) 
Net cash used in investing activities(83,810) (37,470) 
Financing activities  
Senior debt issuances119,000    
Senior debt repayments(60,000) (20,000) 
Dividends paid(18,645) (18,342) 
Issuance of common shares under equity incentive plans838  6,493  
Common share repurchases(2,063) (2,136) 
Net cash provided by (used in) financing activities39,130  (33,985) 
Change in cash, cash equivalents, and restricted cash equivalents(180,911) (3,332) 
Cash, cash equivalents, and restricted cash equivalents at beginning of period1,406,076  172,457  
Cash, cash equivalents, and restricted cash equivalents at end of period$1,225,165  $169,125  
Supplemental information  
Interest paid$6,526  $6,499  

(a) Cash used in operating activities for the six months ended June 30, 2020 primarily reflects $178.3 million of restricted cash equivalents returned to a former insured, per the terms of a collateral trust (see Amounts Recoverable from an Indemnifying Party in Liquidity and Capital Resources). Excluding the reduction in the collateral funds, cash provided by operating activities was $42.1 million for the six months ended June 30, 2020.
See accompanying notes.
 


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 JAMES RIVER GROUP HOLDING, LTD. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements

1. Accounting Policies
Organization
James River Group Holdings, Ltd. (referred to as “JRG Holdings” or, with its subsidiaries, the “Company”) is an exempted holding company registered in Bermuda, organized for the purpose of acquiring and managing insurance and reinsurance entities.
The Company owns five insurance companies based in the United States (“U.S.”) focused on specialty insurance niches and two Bermuda-based reinsurance companies as described below:
James River Group Holdings UK Limited (“James River UK”) is an insurance holding company formed in 2015 in the United Kingdom (“U.K.”). JRG Holdings contributed James River Group, Inc. (“James River Group”), a U.S. insurance holding company, to James River UK in 2015.
James River Group is a Delaware domiciled insurance holding company formed in 2002 which owns all of the Company’s U.S.-based subsidiaries, either directly or indirectly through one of its wholly-owned U.S. subsidiaries. James River Group oversees the Company’s U.S. insurance operations and maintains all of the outstanding debt in the U.S.
James River Insurance Company is an Ohio domiciled excess and surplus lines insurance company that, with its wholly-owned insurance subsidiary, James River Casualty Company, a Virginia domiciled company, is authorized to write business in every state and the District of Columbia.
Falls Lake National Insurance Company (“Falls Lake National”) is an Ohio domiciled insurance company which wholly owns Stonewood Insurance Company (“Stonewood Insurance”), a North Carolina domiciled company, and Falls Lake Fire and Casualty Company, a California domiciled company. Falls Lake National and its subsidiaries primarily write specialty admitted fronting and program business and individual risk workers' compensation insurance.
JRG Reinsurance Company Ltd. (“JRG Re”) was formed in 2007 and commenced operations in 2008. JRG Re, a Bermuda domiciled reinsurer, primarily provides non-catastrophe casualty reinsurance to U.S. third parties and, through December 31, 2017, to the Company’s U.S.-based insurance subsidiaries.
Carolina Re Ltd (“Carolina Re”) was formed in 2018 and as of January 1, 2018 provides reinsurance to the Company’s U.S.-based insurance subsidiaries. Carolina Re is also the cedent on a stop loss reinsurance treaty with JRG Re.
Basis of Presentation
The accompanying condensed consolidated financial statements and notes have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and do not contain all of the information and footnotes required by U.S. GAAP for complete financial statements. The condensed consolidated financial statements include the results of the Company and its subsidiaries from their respective dates of inception or acquisition, as applicable. Readers are urged to review the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 for a more complete description of the Company’s business and accounting policies. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments consist only of normal recurring items. Interim results are not necessarily indicative of results of operations for the full year. The consolidated balance sheet as of December 31, 2019 was derived from the Company’s audited annual consolidated financial statements.
Intercompany transactions and balances have been eliminated.
Estimates and Assumptions
Preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying disclosures. Those estimates are inherently subject to change, and actual results may ultimately differ from those estimates.
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Notes to Condensed Consolidated Financial Statements (continued)


Variable Interest Entities
Entities that do not have sufficient equity at risk to allow the entity to finance its activities without additional financial support or in which the equity investors, as a group, do not have the characteristic of a controlling financial interest are referred to as variable interest entities (“VIE”). A VIE is consolidated by the variable interest holder that is determined to have the controlling financial interest (primary beneficiary) as a result of having both the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company determines whether it is the primary beneficiary of an entity subject to consolidation based on a qualitative assessment of the VIE’s capital structure, contractual terms, nature of the VIE’s operations and purpose, and the Company’s relative exposure to the related risks of the VIE on the date it becomes initially involved in the VIE. The Company reassesses its VIE determination with respect to an entity on an ongoing basis.
The Company holds interests in VIEs through certain equity method investments included in “other invested assets” in the accompanying condensed consolidated balance sheets. The Company has determined that it should not consolidate any of the VIEs as it is not the primary beneficiary in any of the relationships. Although the investments resulted in the Company holding variable interests in the entities, they did not empower the Company to direct the activities that most significantly impact the economic performance of the entities. The Company’s investments related to these VIEs totaled $31.3 million and $31.2 million as of June 30, 2020 and December 31, 2019, respectively, representing the Company’s maximum exposure to loss.
Income Tax Expense
Our effective tax rate fluctuates from period to period based on the relative mix of income reported by country and the respective tax rates imposed by each tax jurisdiction. For U.S.-sourced income, the Company’s U.S. federal income tax expense differs from the amounts computed by applying the federal statutory income tax rate to income before taxes due primarily to interest income on tax-advantaged state and municipal securities, dividends received income, and excess tax benefits on share based compensation. In 2020, the COVID-19 pandemic has led to significant unrealized losses in our investment portfolio that were recognized in earnings. As a result, the Company had a pre-tax loss of $1.5 million for the six months ended June 30, 2020 and recorded a U.S. federal income tax benefit of $257,000. For the six months ended June 30, 2019, our U.S. federal income tax expense was 14.7% of income before taxes.
Adopted Accounting Standards
On January 1, 2020, the Company adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, using the modified retrospective approach, by which a cumulative-effect adjustment was made to retained earnings as of the date of adoption. This update requires financial assets measured at amortized cost, such as bank loan participations held for investment, to be presented at the net amount expected to be collected by means of an allowance for credit losses that is reflected in net income. Credit losses relating to available-for-sale debt securities are recorded through an allowance for credit losses, with the amount of the allowance limited to the amount by which fair value is below amortized cost.
In connection with the adoption of this ASU, the Company elected the fair value option in accounting for bank loan participations effective January 1, 2020. The targeted transition relief offered by ASU 2019-05, Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief was applied to elect the fair value option to account for bank loan participations already held at the January 1, 2020 date of adoption. Under the fair value option, bank loan participations are measured at fair value, and changes in unrealized gains and losses in bank loan participations are reported in our income statement as net realized and unrealized gains (losses) on investments. At adoption on January 1, 2020, the Company reduced the carrying value of its bank loan portfolio to fair value through an $8.4 million adjustment with a $7.8 million (net of tax) cumulative effect adjustment to reduce retained earnings.
Upon adoption of this ASU, the Company established an allowance for uncollectible reinsurance balances through a $265,000 (net of tax) cumulative effect adjustment to retained earnings. Because we purchase reinsurance from financially strong reinsurers or we have collateral securing the recoverables, the effect of adoption was not material to our financial position.
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Notes to Condensed Consolidated Financial Statements (continued)


2. Investments
The Company’s available-for-sale fixed maturity securities are summarized as follows:
 Cost or
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Fair
Value
 (in thousands)
June 30, 2020    
Fixed maturity securities:    
State and municipal
$254,226  $15,714  $(18) $269,922  
Residential mortgage-backed
282,396  8,853  (61) 291,188  
Corporate
707,203  47,479  (240) 754,442  
Commercial mortgage and asset-backed
303,161  10,802  (2,782) 311,181  
U.S. Treasury securities and obligations guaranteed by the U.S. government
115,371  3,309    118,680  
Redeemable preferred stock
2,025    (34) 1,991  
Total fixed maturity securities, available-for-sale$1,664,382  $86,157  $(3,135) $1,747,404  
December 31, 2019    
Fixed maturity securities:    
State and municipal
$159,894  $