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Note 5 - Investments | 6 Months Ended
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Jun. 30, 2017
Investments [Abstract] |
Investments | Investments Available for Sale Securities Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated:
| June 30, 2017
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 58,706 |  |  | $ | 58,343 |  |  | $ | 201 |  |  | $ | 564 |
State and municipal obligations | 111,858 |  |  | 115,454 |  |  | 3,936 |  |  | 340 |
Corporate bonds and notes | 1,713,237 |  |  | 1,735,846 |  |  | 30,429 |  |  | 7,820 |
RMBS | 184,603 |  |  | 182,716 |  |  | 921 |  |  | 2,808 |
CMBS | 432,124 |  |  | 435,101 |  |  | 4,075 |  |  | 1,098 |
Other ABS | 596,416 |  |  | 597,864 |  |  | 2,023 |  |  | 575 |
Foreign government and agency securities | 31,457 |  |  | 32,019 |  |  | 589 |  |  | 27 |
Other investments | 1,500 |  |  | 1,500 |  |  | — |  |  | — |
Total fixed-maturities available for sale | 3,129,901 |  |  | 3,158,843 |  |  | 42,174 |  |  | 13,232 |
Equity securities available for sale (1) | 176,930 |  |  | 176,808 |  |  | 316 |  |  | 438 |
Total debt and equity securities | $ | 3,306,831 |  |  | $ | 3,335,651 |  |  | $ | 42,490 |  |  | $ | 13,670 |
______________________
(1) | Primarily consists of investments in fixed income and equity exchange-traded funds and publicly-traded business development company equities.
| December 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 | $ | 78,931 |  |  | $ | 75,474 |  |  | $ | 2 |  |  | $ | 3,459 |
State and municipal obligations | 66,124 |  |  | 67,171 |  |  | 1,868 |  |  | 821 |
Corporate bonds and notes | 1,463,720 |  |  | 1,455,628 |  |  | 14,320 |  |  | 22,412 |
RMBS | 358,262 |  |  | 350,628 |  |  | 197 |  |  | 7,831 |
CMBS | 429,057 |  |  | 428,289 |  |  | 2,255 |  |  | 3,023 |
Other ABS | 433,603 |  |  | 434,728 |  |  | 2,037 |  |  | 912 |
Foreign government and agency securities | 24,771 |  |  | 24,594 |  |  | 148 |  |  | 325 |
Other investments | 2,000 |  |  | 2,000 |  |  | — |  |  | — |
Total fixed-maturities available for sale | 2,856,468 |  |  | 2,838,512 |  |  | 20,827 |  |  | 38,783 |
Equity securities available for sale (1) | 1,330 |  |  | 1,330 |  |  | — |  |  | — |
Total debt and equity securities | $ | 2,857,798 |  |  | $ | 2,839,842 |  |  | $ | 20,827 |  |  | $ | 38,783 |
______________________
(1) | Primarily consists of investments in Federal Home Loan Bank stock as required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the FHLB.
Gross Unrealized Losses and Fair Value of Available for Sale Securities 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, 2017
($ 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 | 7 |  |  | $ | 36,682 |  |  | $ | 564 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 7 |  |  | $ | 36,682 |  |  | $ | 564 |
State and municipal obligations | 10 |  |  | 47,282 |  |  | 340 |  |  | — |  |  | — |  |  | — |  |  | 10 |  |  | 47,282 |  |  | 340 |
Corporate bonds and notes | 132 |  |  | 530,077 |  |  | 7,718 |  |  | 1 |  |  | 3,736 |  |  | 102 |  |  | 133 |  |  | 533,813 |  |  | 7,820 |
RMBS | 32 |  |  | 128,589 |  |  | 2,733 |  |  | 3 |  |  | 6,529 |  |  | 75 |  |  | 35 |  |  | 135,118 |  |  | 2,808 |
CMBS | 31 |  |  | 113,103 |  |  | 1,095 |  |  | 1 |  |  | 1,038 |  |  | 3 |  |  | 32 |  |  | 114,141 |  |  | 1,098 |
Other ABS | 83 |  |  | 205,378 |  |  | 575 |  |  | — |  |  | — |  |  | — |  |  | 83 |  |  | 205,378 |  |  | 575 |
Foreign government and agency securities | 5 |  |  | 5,419 |  |  | 27 |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 5,419 |  |  | 27 |
Equity Securities | 11 |  |  | 73,441 |  |  | 438 |  |  | — |  |  | — |  |  | — |  |  | 11 |  |  | 73,441 |  |  | 438 |
Total | 311 |  |  | $ | 1,139,971 |  |  | $ | 13,490 |  |  | 5 |  |  | $ | 11,303 |  |  | $ | 180 |  |  | 316 |  |  | $ | 1,151,274 |  |  | $ | 13,670 |
| December 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 | 7 |  |  | $ | 73,160 |  |  | $ | 3,459 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 7 |  |  | $ | 73,160 |  |  | $ | 3,459 |
State and municipal obligations | 7 |  |  | 30,901 |  |  | 821 |  |  | — |  |  | — |  |  | — |  |  | 7 |  |  | 30,901 |  |  | 821 |
Corporate bonds and notes | 185 |  |  | 788,876 |  |  | 22,135 |  |  | 2 |  |  | 4,582 |  |  | 277 |  |  | 187 |  |  | 793,458 |  |  | 22,412 |
RMBS | 56 |  |  | 311,031 |  |  | 7,822 |  |  | 1 |  |  | 1,398 |  |  | 9 |  |  | 57 |  |  | 312,429 |  |  | 7,831 |
CMBS | 37 |  |  | 218,170 |  |  | 2,909 |  |  | 2 |  |  | 6,585 |  |  | 114 |  |  | 39 |  |  | 224,755 |  |  | 3,023 |
Other ABS | 58 |  |  | 131,268 |  |  | 470 |  |  | 16 |  |  | 45,886 |  |  | 442 |  |  | 74 |  |  | 177,154 |  |  | 912 |
Foreign government and agency securities | 12 |  |  | 13,034 |  |  | 325 |  |  | — |  |  | — |  |  | — |  |  | 12 |  |  | 13,034 |  |  | 325 |
Total | 362 |  |  | $ | 1,566,440 |  |  | $ | 37,941 |  |  | 21 |  |  | $ | 58,451 |  |  | $ | 842 |  |  | 383 |  |  | $ | 1,624,891 |  |  | $ | 38,783 |
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. During the three months ended June 30, 2017, we recorded other-than-temporary impairment losses in earnings of $1.0 million, including $0.5 million related to a convertible note of a non-public company issuer included in debt securities and $0.5 million related to a privately-placed equity security. We concluded that we would not recover the amortized cost basis of these securities due to credit deterioration. There were no credit-related impairment losses recognized in earnings or in AOCI during the year ended December 31, 2016. Although we held securities in an unrealized loss position as of June 30, 2017, we did not consider those securities 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, 2017 were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect 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 June 30, 2017, 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, 2017. Trading Securities 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, 2017 |  | December 31, 2016
Trading securities: |  |  |
U.S. government and agency securities | $ | 28,336 |  |  | $ | 33,042 |
State and municipal obligations | 216,838 |  |  | 259,573 |
Corporate bonds and notes | 360,906 |  |  | 453,617 |
RMBS | 34,114 |  |  | 38,214 |
CMBS | 64,267 |  |  | 78,984 |
Other ABS | — |  |  | 8,219 |
Foreign government and agency securities | 4,327 |  |  | 8,213 |
Total | $ | 708,788 |  |  | $ | 879,862 |
For trading securities held at June 30, 2017 and December 31, 2016, we had net unrealized gains associated with those securities of $8.0 million and $16.8 million during the six months ended June 30, 2017 and the year ended December 31, 2016, respectively. For the six months ended June 30, 2017, we did not transfer any securities from the available for sale or trading categories. Net Gains (Losses) on Investments and Other Financial Instruments 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) | 2017 |  | 2016 |  | 2017 |  | 2016
Net realized gains (losses): |  |  |  |  |  |  |
Fixed-maturities available for sale | $ | (1,180 | ) |  | $ | 1,166 |  |  | $ | (3,689 | ) |  | $ | (1,982 | )
Equity securities available for sale | 385 |  |  | — |  |  | 385 |  |  | (170 | )
Trading securities | (349 | ) |  | 421 |  |  | (6,043 | ) |  | (1,819 | )
Short-term investments | (38 | ) |  | — |  |  | (32 | ) |  | (39 | )
Other gains (losses) | — |  |  | — |  |  | 18 |  |  | 18 |
Net realized gains (losses) on investments | (1,182 | ) |  | 1,587 |  |  | (9,361 | ) |  | (3,992 | )
Other-than-temporary impairment losses | (1,000 | ) |  | — |  |  | (1,000 | ) |  | — |
Unrealized gains (losses) on trading securities | 6,938 |  |  | 27,678 |  |  | 12,164 |  |  | 62,909 |
Total net gains (losses) on investments | 4,756 |  |  | 29,265 |  |  | 1,803 |  |  | 58,917 |
Net gains (losses) on other financial instruments | 575 |  |  | 1,262 |  |  | 677 |  |  | 2,896 |
Net gains (losses) on investments and other financial instruments | $ | 5,331 |  |  | $ | 30,527 |  |  | $ | 2,480 |  |  | $ | 61,813 |
Contractual Maturities The contractual maturities of fixed-maturity investments were as follows:
| June 30, 2017
| Available for Sale
(In thousands) | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 59,342 |  |  | $ | 59,351 |
Due after one year through five years (1) | 656,233 |  |  | 661,676 |
Due after five years through 10 years (1) | 874,709 |  |  | 880,162 |
Due after 10 years (1) | 326,474 |  |  | 341,973 |
RMBS (2) | 184,603 |  |  | 182,716 |
CMBS (2) | 432,124 |  |  | 435,101 |
Other ABS (2) | 596,416 |  |  | 597,864 |
Total | $ | 3,129,901 |  |  | $ | 3,158,843 |
______________________
(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.
Other At June 30, 2017 and December 31, 2016, Radian Guaranty had $64.3 million and $63.9 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. See Note 10 for additional information.

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