Limited partnerships: The Company accounts for investments in limited partnerships using the equity method of accounting, which requires an investor in a limited partnership to carry the investment at its proportionate share of the limited partnership's equity. The underlying assets of the Company's investments in limited partnerships are carried primarily at fair value; therefore, the Company's carrying value of limited partnerships approximates fair value. As these investments are not actively traded and the corresponding inputs are based on data provided by the investees, they are classified as Level 3. Commercial mortgage loans: Commercial mortgage loans are carried primarily at amortized cost along with a valuation allowance for losses when necessary. These investments represent interests in commercial mortgage loans originated and serviced by a third party of which the Company shares, on a pro-rata basis, in all related cash flows of the underlying mortgage loans. The fair value of the Company’s investment in these commercial mortgage loans is based on expected future cash flows discounted at the current interest rate for origination of similar quality loans, adjusted for specific loan risk. These investments are classified as Level 3. Short-term borrowings: The fair value of the Company's short-term borrowings is based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current market interest rates available to the Company for debt of similar terms and remaining maturities. A summary of the carrying value and fair value by level of financial instruments not recorded at fair value on the Company's consolidated balance sheets at December 31, 2020 and 2019 is as follows: Quarterly results of operations are as follows: Note O - Quarterly Results of Operations (Unaudited) 78 2020 2019 1st 2nd 3rd 4th 1st 2nd 3rd 4th Net premiums earned $ 109,659 $ 97,730 $ 117,853 $ 120,273 $ 110,012 $ 115,631 $ 110,288 $ 111,357 Net investment income 7,236 6,379 5,486 6,321 6,231 6,500 6,703 6,815  Net realized and unrealized gains (losses) on investments (27,756 ) 10,615 144 7,761 6,027 2,889 125 3,848 Losses and loss expenses incurred 81,831 68,208 84,673 84,246 87,122 90,433 84,781 86,132  Net income (loss) (22,156) 11,367 3,281 11,971 2,748 1,535 (707) 3,771  Net income (loss) per diluted share $ (1.56) $ 0.80 $ 0.23 $ 0.84 $ 0.18 $ 0.11 $ (0.05) $ 0.26  Carrying Fair Value 2020: Value Level 1 Level 2 Level 3 Total Assets: Limited partnerships $ 7,214 $ – $ – $ 7,214 $ 7,214 Commercial mortgage loans 10,602 – – 11,425 11,425 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000 2019: Assets: Limited partnerships $ 23,292 $ – $ – $ 23,292 $ 23,292  Commercial mortgage loans 11,782 – – 12,068 12,068 Liabilities: Short-term borrowings 20,000 – 20,000 – 20,000