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Note 6 - Investments (Notes) | 9 Months Ended
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Sep. 30, 2014
Investments [Abstract] |
Investments | Investments Our held to maturity and available for sale securities within our investment portfolio consisted of the following as of the dates indicated:
| September 30, 2014
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities held to maturity: |  |  |  |  |  |  |
State and municipal obligations | $ | 50 |  |  | $ | 50 |  |  | $ | — |  |  | $ | — |
| $ | 50 |  |  | $ | 50 |  |  | $ | — |  |  | $ | — |
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 43,178 |  |  | $ | 43,314 |  |  | $ | 171 |  |  | $ | 35 |
State and municipal obligations | 26,788 |  |  | 27,932 |  |  | 1,175 |  |  | 31 |
Corporate bonds and notes | 124,536 |  |  | 125,898 |  |  | 2,194 |  |  | 832 |
RMBS | 76,139 |  |  | 77,431 |  |  | 1,292 |  |  | — |
CMBS | 31,617 |  |  | 31,546 |  |  | 66 |  |  | 137 |
Other ABS | 126,392 |  |  | 124,721 |  |  | 13 |  |  | 1,684 |
Foreign government and agency securities | 19,303 |  |  | 19,626 |  |  | 364 |  |  | 41 |
Other investments | 202 |  |  | 202 |  |  | — |  |  | — |
| $ | 448,155 |  |  | $ | 450,670 |  |  | $ | 5,275 |  |  | $ | 2,760 |
Equity securities available for sale (1) | $ | 78,106 |  |  | $ | 144,593 |  |  | $ | 66,487 |  |  | $ | — |
Total debt and equity securities | $ | 526,311 |  |  | $ | 595,313 |  |  | $ | 71,762 |  |  | $ | 2,760 |
______________________
(1) | Comprising broadly diversified domestic equity mutual funds ($137.0 million fair value) and various preferred and common stocks invested across numerous companies and industries ($7.6 million fair value).
| December 31, 2013
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities held to maturity: |  |  |  |  |  |  |
State and municipal obligations | $ | 358 |  |  | $ | 351 |  |  | $ | — |  |  | $ | 7 |
| $ | 358 |  |  | $ | 351 |  |  | $ | — |  |  | $ | 7 |
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 8,939 |  |  | $ | 9,106 |  |  | $ | 224 |  |  | $ | 57 |
State and municipal obligations | 26,489 |  |  | 25,946 |  |  | 26 |  |  | 569 |
Corporate bonds and notes | 11,951 |  |  | 12,045 |  |  | 578 |  |  | 484 |
RMBS | 72,665 |  |  | 73,115 |  |  | 450 |  |  | — |
Other investments | 341 |  |  | 341 |  |  | — |  |  | — |
| $ | 120,385 |  |  | $ | 120,553 |  |  | $ | 1,278 |  |  | $ | 1,110 |
Equity securities available for sale (1) | $ | 78,106 |  |  | $ | 135,168 |  |  | $ | 57,062 |  |  | $ | — |
Total debt and equity securities | $ | 198,849 |  |  | $ | 256,072 |  |  | $ | 58,340 |  |  | $ | 1,117 |
______________________
(1) | Comprising broadly diversified domestic equity mutual funds ($128.3 million fair value) and various preferred and common stocks invested across numerous companies and industries ($6.9 million fair value).
The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated:
(In thousands) | September 30, 2014 |  | December 31, 2013
Trading securities: |  |  |
U.S. government and agency securities | $ | 249,102 |  |  | $ | 393,815 |
State and municipal obligations | 605,255 |  |  | 595,070 |
Corporate bonds and notes | 881,362 |  |  | 1,024,574 |
RMBS | 221,820 |  |  | 487,239 |
CMBS | 272,281 |  |  | 288,895 |
Other ABS | 136,802 |  |  | 195,816 |
Foreign government and agency securities | 23,744 |  |  | 40,657 |
Equity securities | 88,397 |  |  | 90,604 |
Other investments | 733 |  |  | 759 |
Total | $ | 2,479,496 |  |  | $ | 3,117,429 |
For trading securities that were still held at September 30, 2014 and December 31, 2013, we had net unrealized gains during 2014 and net unrealized losses during 2013 associated with those securities in the amount of $87.4 million and $140.9 million, respectively. Net realized and unrealized (losses) gains on investments consisted of:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) | 2014 |  | 2013 |  | 2014 |  | 2013
Net realized gains (losses): |  |  |  |  |  |  |
Fixed-maturities held to maturity | $ | — |  |  | $ | — |  |  | $ | (9 | ) |  | $ | 2 |
Fixed-maturities available for sale | (541 | ) |  | 443 |  |  | (335 | ) |  | 1,312 |
Equities available for sale | — |  |  | — |  |  | — |  |  | 349 |
Trading securities | 119 |  |  | 2,196 |  |  | (4,333 | ) |  | 15,212 |
Short-term investments | — |  |  | — |  |  | — |  |  | 2 |
Other invested assets | — |  |  | 485 |  |  | — |  |  | 8,841 |
Other | 531 |  |  | 70 |  |  | 478 |  |  | 93 |
Net realized gains (losses) on investments | 109 |  |  | 3,194 |  |  | (4,199 | ) |  | 25,811 |
Unrealized (losses) gains on trading securities | (7,663 | ) |  | (12,666 | ) |  | 107,865 |  |  | (169,107 | )
Unrealized (losses) gains on other invested assets | (285 | ) |  | 2,340 |  |  | 165 |  |  | 405 |
Total (losses) gains on investments | $ | (7,839 | ) |  | $ | (7,132 | ) |  | $ | 103,831 |  |  | $ | (142,891 | )
As part of the Freddie Mac Agreement, Radian Guaranty had $209 million and $205 million at September 30, 2014 and December 31, 2013, respectively, in a collateral account currently invested primarily in trading securities, which is pledged to cover Loss Mitigation Activity on the loans subject to the agreement. A portion of the funds deposited may be released to Radian Guaranty over time. As of September 30, 2014 and December 31, 2013, our investment portfolio included no Sovereign securities of the Stressed European Countries which have Sovereign obligations that have been under particular stress due to economic uncertainty, potential restructuring and ratings downgrades, and included no securities of any other countries under similar stress. The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” and “held to maturity,” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated:
September 30, 2014: ($ in thousands) Description of Securities |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
# of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses
U.S. government and agency securities |  | 2 |  |  | $ | 7,114 |  |  | $ | 35 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 2 |  |  | $ | 7,114 |  |  | $ | 35 |
State and municipal obligations |  | 7 |  |  | 426 |  |  | 23 |  |  | 1 |  |  | 5,726 |  |  | 8 |  |  | 8 |  |  | 6,152 |  |  | 31 |
Corporate bonds and notes |  | 20 |  |  | 57,381 |  |  | 713 |  |  | 1 |  |  | 1,042 |  |  | 119 |  |  | 21 |  |  | 58,423 |  |  | 832 |
CMBS |  | 5 |  |  | 21,495 |  |  | 137 |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 21,495 |  |  | 137 |
Other ABS |  | 28 |  |  | 109,990 |  |  | 1,684 |  |  | — |  |  | — |  |  | — |  |  | 28 |  |  | 109,990 |  |  | 1,684 |
Foreign government and agency securities |  | 5 |  |  | 2,726 |  |  | 41 |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 2,726 |  |  | 41 |
Total |  | 67 |  |  | $ | 199,132 |  |  | $ | 2,633 |  |  | 2 |  |  | $ | 6,768 |  |  | $ | 127 |  |  | 69 |  |  | $ | 205,900 |  |  | $ | 2,760 |
December 31, 2013: ($ in thousands) Description of Securities |  | Less Than 12 Months |  | 12 Months or Greater |  | Total
# of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses |  | # of securities |  | Fair Value |  | Unrealized Losses
U.S. government and agency securities |  | 1 |  |  | $ | 5,401 |  |  | $ | 57 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  |  | $ | 5,401 |  |  | $ | 57 |
State and municipal obligations |  | 4 |  |  | 14,502 |  |  | 42 |  |  | 2 |  |  | 5,514 |  |  | 534 |  |  | 6 |  |  | 20,016 |  |  | 576 |
Corporate bonds and notes |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 2,966 |  |  | 484 |  |  | 2 |  |  | 2,966 |  |  | 484 |
Total |  | 5 |  |  | $ | 19,903 |  |  | $ | 99 |  |  | 4 |  |  | $ | 8,480 |  |  | $ | 1,018 |  |  | 9 |  |  | $ | 28,383 |  |  | $ | 1,117 |
During the first nine months of 2014 and 2013, there were no credit losses recognized in earnings. Impairments due to credit deterioration that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in fair value (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security also may serve as a basis to conclude that an other-than-temporary impairment has occurred. To the extent we determine that a security is deemed to have had an other-than-temporary impairment, an impairment loss is recognized. We had securities in an unrealized loss position that we did not consider to be other-than-temporarily impaired as of September 30, 2014. For all investment categories, the unrealized losses of 12 months or greater duration as of September 30, 2014, were generally caused by interest rate or credit spread movements since the purchase date. As of September 30, 2014, we expected the present value of cash flows to be collected from these securities to be sufficient to recover the amortized cost basis of these securities. As of September 30, 2014, we did not have the intent to sell any debt securities in an unrealized loss position, and we determined that it is more likely than not that we will not be required to sell the securities before recovery of their cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at September 30, 2014. The contractual maturities of fixed-maturity investments are as follows:
| September 30, 2014
| Held to Maturity |  | Available for Sale
(In thousands) | Amortized Cost |  | Fair Value |  | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 50 |  |  | $ | 50 |  |  | $ | 77 |  |  | $ | 77 |
Due after one year through five years (1) | — |  |  | — |  |  | 76,568 |  |  | 76,680 |
Due after five years through ten years (1) | — |  |  | — |  |  | 64,406 |  |  | 65,503 |
Due after ten years (1) | — |  |  | — |  |  | 72,956 |  |  | 74,712 |
RMBS (2) | — |  |  | — |  |  | 76,139 |  |  | 77,431 |
CMBS (2) | — |  |  | — |  |  | 31,617 |  |  | 31,546 |
Other ABS (2) | — |  |  | — |  |  | 126,392 |  |  | 124,721 |
Total | $ | 50 |  |  | $ | 50 |  |  | $ | 448,155 |  |  | $ | 450,670 |
______________________
(1) | Actual maturities may differ as a result of calls before scheduled maturity.
(2) | RMBS, CMBS, and Other ABS are shown separately, as they are not due at a single maturity date.

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