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Note 5 - Investments | 3 Months Ended
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Mar. 31, 2016
Investments [Abstract] |
Investments | Investments Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated:
| March 31, 2016
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 152,233 |  |  | $ | 153,303 |  |  | $ | 1,072 |  |  | $ | 2 |
State and municipal obligations | 72,249 |  |  | 75,289 |  |  | 3,160 |  |  | 120 |
Corporate bonds and notes | 1,027,955 |  |  | 1,056,504 |  |  | 34,065 |  |  | 5,516 |
RMBS | 304,401 |  |  | 307,516 |  |  | 3,227 |  |  | 112 |
CMBS | 504,978 |  |  | 509,070 |  |  | 7,926 |  |  | 3,834 |
Other ABS | 399,936 |  |  | 396,461 |  |  | 968 |  |  | 4,443 |
Foreign government and agency securities | 25,693 |  |  | 25,192 |  |  | 232 |  |  | 733 |
Total fixed-maturities available for sale | 2,487,445 |  |  | 2,523,335 |  |  | 50,650 |  |  | 14,760 |
Equity securities available for sale | 500 |  |  | 500 |  |  | — |  |  | — |
Total debt and equity securities | $ | 2,487,945 |  |  | $ | 2,523,835 |  |  | $ | 50,650 |  |  | $ | 14,760 |
| December 31, 2015
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 13,773 |  |  | $ | 13,752 |  |  | $ | — |  |  | $ | 21 |
State and municipal obligations | 36,920 |  |  | 37,900 |  |  | 1,100 |  |  | 120 |
Corporate bonds and notes | 815,024 |  |  | 802,193 |  |  | 4,460 |  |  | 17,291 |
RMBS | 226,744 |  |  | 224,905 |  |  | 625 |  |  | 2,464 |
CMBS | 415,780 |  |  | 406,910 |  |  | 69 |  |  | 8,939 |
Other ABS | 359,452 |  |  | 355,494 |  |  | 16 |  |  | 3,974 |
Foreign government and agency securities | 25,663 |  |  | 24,307 |  |  | 27 |  |  | 1,383 |
Total fixed-maturities available for sale | 1,893,356 |  |  | 1,865,461 |  |  | 6,297 |  |  | 34,192 |
Equity securities available for sale (1) | 75,538 |  |  | 75,430 |  |  | — |  |  | 108 |
Total debt and equity securities | $ | 1,968,894 |  |  | $ | 1,940,891 |  |  | $ | 6,297 |  |  | $ | 34,300 |
_____________________
(1) | Comprising primarily a multi-sector exchange-traded fund.
The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated:
(In thousands) | March 31, 2016 |  | December 31, 2015
Trading securities: |  |  |
U.S. government and agency securities | $ | 98,869 |  |  | $ | 129,913 |
State and municipal obligations | 311,650 |  |  | 303,946 |
Corporate bonds and notes | 582,035 |  |  | 580,993 |
RMBS | 69,304 |  |  | 72,192 |
CMBS | 124,851 |  |  | 137,678 |
Other ABS | 8,911 |  |  | 16,131 |
Foreign government and agency securities | 13,469 |  |  | 13,268 |
Equity securities | — |  |  | 25,016 |
Total | $ | 1,209,089 |  |  | $ | 1,279,137 |
For trading securities held at March 31, 2016 and December 31, 2015, we had net unrealized gains during the three months ended March 31, 2016 and net unrealized losses during the year ended December 31, 2015 associated with those securities of $32.3 million and $25.2 million, respectively. For the three months ended March 31, 2016, 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 March 31,
(In thousands) | 2016 |  | 2015
Net realized losses: |  |  |
Fixed-maturities available for sale | $ | (3,148 | ) |  | $ | (51 | )
Equities available for sale | (170 | ) |  | — |
Trading securities | (2,240 | ) |  | (4,568 | )
Short-term investments | (39 | ) |  | — |
Other gains | 18 |  |  | 105 |
Net realized losses on investments | (5,579 | ) |  | (4,514 | )
Unrealized gains on trading securities | 35,231 |  |  | 20,701 |
Total net gains on investments | 29,652 |  |  | 16,187 |
Net gains on other financial instruments | 1,634 |  |  | 592 |
Net gains on investments and other financial instruments | $ | 31,286 |  |  | $ | 16,779 |
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:
March 31, 2016: ($ 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 |  |  | $ | 2,296 |  |  | $ | 2 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  |  | $ | 2,296 |  |  | $ | 2 |
State and municipal obligations |  | 3 |  |  | 18,579 |  |  | 120 |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | 18,579 |  |  | 120 |
Corporate bonds and notes |  | 40 |  |  | 124,360 |  |  | 4,449 |  |  | 18 |  |  | 34,388 |  |  | 1,067 |  |  | 58 |  |  | 158,748 |  |  | 5,516 |
RMBS |  | 5 |  |  | 91,117 |  |  | 112 |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 91,117 |  |  | 112 |
CMBS |  | 42 |  |  | 186,024 |  |  | 3,834 |  |  | — |  |  | — |  |  | — |  |  | 42 |  |  | 186,024 |  |  | 3,834 |
Other ABS |  | 85 |  |  | 226,645 |  |  | 2,682 |  |  | 14 |  |  | 42,875 |  |  | 1,761 |  |  | 99 |  |  | 269,520 |  |  | 4,443 |
Foreign government and agency securities |  | 9 |  |  | 9,958 |  |  | 468 |  |  | 4 |  |  | 3,011 |  |  | 265 |  |  | 13 |  |  | 12,969 |  |  | 733 |
Total |  | 185 |  |  | $ | 658,979 |  |  | $ | 11,667 |  |  | 36 |  |  | $ | 80,274 |  |  | $ | 3,093 |  |  | 221 |  |  | $ | 739,253 |  |  | $ | 14,760 |
December 31, 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
U.S. government and agency securities |  | 1 |  |  | $ | 5,752 |  |  | $ | 21 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  |  | $ | 5,752 |  |  | $ | 21 |
State and municipal obligations |  | 2 |  |  | 11,674 |  |  | 120 |  |  | — |  |  | — |  |  | — |  |  | 2 |  |  | 11,674 |  |  | 120 |
Corporate bonds and notes |  | 117 |  |  | 510,807 |  |  | 16,773 |  |  | 6 |  |  | 8,700 |  |  | 518 |  |  | 123 |  |  | 519,507 |  |  | 17,291 |
RMBS |  | 12 |  |  | 168,415 |  |  | 2,464 |  |  | — |  |  | — |  |  | — |  |  | 12 |  |  | 168,415 |  |  | 2,464 |
CMBS |  | 58 |  |  | 387,268 |  |  | 8,939 |  |  | — |  |  | — |  |  | — |  |  | 58 |  |  | 387,268 |  |  | 8,939 |
Other ABS |  | 96 |  |  | 284,998 |  |  | 2,559 |  |  | 14 |  |  | 43,225 |  |  | 1,415 |  |  | 110 |  |  | 328,223 |  |  | 3,974 |
Foreign government and agency securities |  | 18 |  |  | 18,733 |  |  | 1,095 |  |  | 3 |  |  | 2,278 |  |  | 288 |  |  | 21 |  |  | 21,011 |  |  | 1,383 |
Equity securities |  | 1 |  |  | 74,930 |  |  | 108 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 74,930 |  |  | 108 |
Total |  | 305 |  |  | $ | 1,462,577 |  |  | $ | 32,079 |  |  | 23 |  |  | $ | 54,203 |  |  | $ | 2,221 |  |  | 328 |  |  | $ | 1,516,780 |  |  | $ | 34,300 |
During the first three months of 2016 and 2015, we did not recognize in earnings any impairment losses related to credit deterioration. Although we held securities in an unrealized loss position as of March 31, 2016, 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 March 31, 2016, were generally caused by interest rate or credit spread movements since the purchase date. As of March 31, 2016, 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 March 31, 2016, 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 March 31, 2016. The contractual maturities of fixed-maturity investments are as follows:
| March 31, 2016
| Available for Sale
(In thousands) | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 9,618 |  |  | $ | 9,629 |
Due after one year through five years (1) | 323,427 |  |  | 326,269 |
Due after five years through ten years (1) | 564,211 |  |  | 578,151 |
Due after ten years (1) | 380,874 |  |  | 396,239 |
RMBS (2) | 304,401 |  |  | 307,516 |
CMBS (2) | 504,978 |  |  | 509,070 |
Other ABS (2) | 399,936 |  |  | 396,461 |
Total | $ | 2,487,445 |  |  | $ | 2,523,335 |
______________________
(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 March 31, 2016 and December 31, 2015, Radian Guaranty had $75.3 million and $74.7 million, respectively, in a collateral account pursuant to the Freddie Mac Agreement. This collateral account, which contains investments primarily invested in and classified as part of our trading securities, is pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac 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 that agreement. See Note 9 for additional information.

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