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Note 5 - Investments (Notes) | 6 Months Ended
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Jun. 30, 2015
Investments [Abstract] |
Investments | Investments Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated:
| June 30, 2015
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 5,745 |  |  | $ | 5,784 |  |  | $ | 39 |  |  | $ | — |
State and municipal obligations | 17,668 |  |  | 18,476 |  |  | 810 |  |  | 2 |
Corporate bonds and notes | 529,942 |  |  | 517,857 |  |  | 1,850 |  |  | 13,935 |
RMBS | 158,134 |  |  | 156,532 |  |  | 513 |  |  | 2,115 |
CMBS | 218,531 |  |  | 213,988 |  |  | 97 |  |  | 4,640 |
Other ABS | 243,096 |  |  | 243,045 |  |  | 693 |  |  | 744 |
Foreign government and agency securities | 23,330 |  |  | 23,160 |  |  | 186 |  |  | 356 |
| 1,196,446 |  |  | 1,178,842 |  |  | 4,188 |  |  | 21,792 |
Equity securities available for sale | 573 |  |  | 881 |  |  | 308 |  |  | — |
Total debt and equity securities | $ | 1,197,019 |  |  | $ | 1,179,723 |  |  | $ | 4,496 |  |  | $ | 21,792 |
| December 31, 2014
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 5,709 |  |  | $ | 5,751 |  |  | $ | 48 |  |  | $ | 6 |
State and municipal obligations | 17,727 |  |  | 18,910 |  |  | 1,183 |  |  | — |
Corporate bonds and notes | 277,678 |  |  | 284,408 |  |  | 7,288 |  |  | 558 |
RMBS | 41,467 |  |  | 42,520 |  |  | 1,053 |  |  | — |
CMBS | 57,358 |  |  | 58,234 |  |  | 876 |  |  | — |
Other ABS | 109,420 |  |  | 107,701 |  |  | 8 |  |  | 1,727 |
Foreign government and agency securities | 19,301 |  |  | 19,366 |  |  | 307 |  |  | 242 |
| 528,660 |  |  | 536,890 |  |  | 10,763 |  |  | 2,533 |
Equity securities available for sale (1) | 76,900 |  |  | 143,368 |  |  | 66,468 |  |  | — |
Total debt and equity securities | $ | 605,560 |  |  | $ | 680,258 |  |  | $ | 77,231 |  |  | $ | 2,533 |
______________________
(1) | Comprising broadly diversified domestic equity mutual funds ($143.0 million fair value) and a preferred stock investment in Freddie Mac ($0.4 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) | June 30, 2015 |  | December 31, 2014
Trading securities: |  |  |
U.S. government and agency securities | $ | 131,335 |  |  | $ | 134,530 |
State and municipal obligations | 312,340 |  |  | 343,926 |
Corporate bonds and notes | 660,964 |  |  | 708,361 |
RMBS | 80,772 |  |  | 89,810 |
CMBS | 169,443 |  |  | 188,615 |
Other ABS | 30,952 |  |  | 77,755 |
Foreign government and agency securities | 13,548 |  |  | 18,331 |
Equity securities | 67,081 |  |  | 72,256 |
Total | $ | 1,466,435 |  |  | $ | 1,633,584 |
For trading securities held at June 30, 2015 and December 31, 2014, we had net unrealized losses during the six months ended June 30, 2015 and unrealized gains during the year ended December 31, 2014 associated with those securities of $13.7 million and $65.7 million, respectively. For the six months ended June 30, 2015, we did not transfer any securities from the available for sale or trading categories. Net realized and unrealized gains (losses) on investments and other financial instruments consisted of:
| Three Months Ended June 30, |  | Six Months Ended June 30,
(In thousands) | 2015 |  | 2014 |  | 2015 |  | 2014
Net realized gains (losses): |  |  |  |  |  |  |
Fixed-maturities held to maturity | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (9 | )
Fixed-maturities available for sale | (8 | ) |  | (604 | ) |  | (59 | ) |  | (599 | )
Equities available for sale | 68,723 |  |  | — |  |  | 68,723 |  |  | — |
Trading securities | (8,291 | ) |  | (41 | ) |  | (12,859 | ) |  | (4,392 | )
Short-term investments | 4 |  |  | — |  |  | 4 |  |  | — |
Other | 1 |  |  | (63 | ) |  | 106 |  |  | (53 | )
Net realized gains (losses) on investments | 60,429 |  |  | (708 | ) |  | 55,915 |  |  | (5,053 | )
Unrealized (losses) gains on trading securities | (31,638 | ) |  | 28,941 |  |  | (10,937 | ) |  | 76,572 |
Total net gains on investments | 28,791 |  |  | 28,233 |  |  | 44,978 |  |  | 71,519 |
Net (losses) gains on other financial instruments | (343 | ) |  | (2,901 | ) |  | 249 |  |  | (3,219 | )
Net gains on investments and other financial instruments | $ | 28,448 |  |  | $ | 25,332 |  |  | $ | 45,227 |  |  | $ | 68,300 |
The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated:
June 30, 2015: ($ 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
State and municipal obligations |  | 1 |  |  | $ | 5,727 |  |  | $ | 2 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  |  | $ | 5,727 |  |  | $ | 2 |
Corporate bonds and notes |  | 95 |  |  | 408,203 |  |  | 13,528 |  |  | 7 |  |  | 10,172 |  |  | 407 |  |  | 102 |  |  | 418,375 |  |  | 13,935 |
RMBS |  | 9 |  |  | 116,631 |  |  | 2,115 |  |  | — |  |  | — |  |  | — |  |  | 9 |  |  | 116,631 |  |  | 2,115 |
CMBS |  | 30 |  |  | 195,913 |  |  | 4,640 |  |  | — |  |  | — |  |  | — |  |  | 30 |  |  | 195,913 |  |  | 4,640 |
Other ABS |  | 28 |  |  | 114,059 |  |  | 273 |  |  | 10 |  |  | 39,860 |  |  | 471 |  |  | 38 |  |  | 153,919 |  |  | 744 |
Foreign government and agency securities |  | 11 |  |  | 10,971 |  |  | 340 |  |  | 1 |  |  | 183 |  |  | 16 |  |  | 12 |  |  | 11,154 |  |  | 356 |
Total |  | 174 |  |  | $ | 851,504 |  |  | $ | 20,898 |  |  | 18 |  |  | $ | 50,215 |  |  | $ | 894 |  |  | 192 |  |  | $ | 901,719 |  |  | $ | 21,792 |
December 31, 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 |  | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  |  | $ | 3,455 |  |  | $ | 6 |  |  | 1 |  |  | $ | 3,455 |  |  | $ | 6 |
Corporate bonds and notes |  | 24 |  |  | 40,917 |  |  | 410 |  |  | 1 |  |  | 1,027 |  |  | 148 |  |  | 25 |  |  | 41,944 |  |  | 558 |
Other ABS |  | 34 |  |  | 97,356 |  |  | 1,727 |  |  | — |  |  | — |  |  | — |  |  | 34 |  |  | 97,356 |  |  | 1,727 |
Foreign government and agency securities |  | 4 |  |  | 6,353 |  |  | 242 |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 6,353 |  |  | 242 |
Total |  | 62 |  |  | $ | 144,626 |  |  | $ | 2,379 |  |  | 2 |  |  | $ | 4,482 |  |  | $ | 154 |  |  | 64 |  |  | $ | 149,108 |  |  | $ | 2,533 |
During the first six months of 2015 and 2014, we did not recognize in earnings any impairment losses related to credit deterioration. Although we held securities in an unrealized loss position as of June 30, 2015, we did not consider them to be other-than-temporarily impaired as of such date. For all investment categories, the unrealized losses of 12 months or greater duration as of June 30, 2015, were generally caused by interest rate or credit spread movements since the purchase date. As of June 30, 2015, we estimated that the present value of cash flows expected to be collected from these securities would be sufficient to recover the amortized cost basis of these securities. As of June 30, 2015, 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 June 30, 2015. The contractual maturities of fixed-maturity investments are as follows:
| June 30, 2015
| Available for Sale
(In thousands) | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 7,381 |  |  | $ | 7,399 |
Due after one year through five years (1) | 51,208 |  |  | 51,265 |
Due after five years through ten years (1) | 345,233 |  |  | 340,126 |
Due after ten years (1) | 172,863 |  |  | 166,487 |
RMBS (2) | 158,134 |  |  | 156,532 |
CMBS (2) | 218,531 |  |  | 213,988 |
Other ABS (2) | 243,096 |  |  | 243,045 |
Total | $ | 1,196,446 |  |  | $ | 1,178,842 |
______________________
(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.
At June 30, 2015 and December 31, 2014, Radian Guaranty had $210.3 million and $209.3 million, respectively, in a collateral account pursuant to the Freddie Mac Agreement. These investments, which are primarily invested in trading securities, are pledged to cover Loss Mitigation Activity on the loans subject to that agreement. Subject to certain conditions in the Freddie Mac Agreement, amounts in the collateral account may be released to Radian Guaranty over time to the extent that Loss Mitigation Activity becomes final in accordance with the terms of the Freddie Mac Agreement. However, if the amount of Loss Mitigation Activity that becomes final in accordance with the Freddie Mac Agreement is less than $205 million prior to August 29, 2017, then any shortfall will be paid on that date to Freddie Mac from the funds remaining in the collateral account, subject to certain adjustments designed to allow for any Loss Mitigation Activity that has not become final or any claims evaluation that has not been completed as of that date. From the time the collateral account was established through June 30, 2015, approximately $128 million of Loss Mitigation Activity had become final in accordance with the Freddie Mac Agreement and approximately $13 million of submitted claims had been rescinded, denied, curtailed or cancelled, but were not yet considered final in accordance with the Freddie Mac Agreement.

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