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Note 5 - Investments | 3 Months Ended
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Mar. 31, 2019
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:
| March 31, 2019
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 94,441 |  |  | $ | 94,098 |  | (1) | $ | 185 |  |  | $ | 528 |
State and municipal obligations | 88,598 |  |  | 92,718 |  |  | 4,421 |  |  | 301 |
Corporate bonds and notes | 2,159,040 |  |  | 2,175,975 |  |  | 31,450 |  |  | 14,515 |
RMBS | 348,746 |  |  | 350,238 |  | (2) | 4,242 |  |  | 2,750 |
CMBS | 512,190 |  |  | 515,604 |  |  | 4,873 |  |  | 1,459 |
Other ABS | 679,444 |  |  | 675,477 |  |  | 1,021 |  |  | 4,988 |
Total securities available for sale | $ | 3,882,459 |  |  | $ | 3,904,110 |  | (3) | $ | 46,192 |  |  | $ | 24,541 |
______________________
(1) | Includes securities with a fair value of $10.9 million serving as collateral for FHLB advances.
(2) | Includes securities with a fair value of $103.7 million serving as collateral for FHLB advances.
(3) | Includes $6.5 million of fixed-maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below.
| December 31, 2018
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 85,532 |  |  | $ | 84,070 |  | (1) | $ | 46 |  |  | $ | 1,508 |
State and municipal obligations | 138,022 |  |  | 138,313 |  |  | 2,191 |  |  | 1,900 |
Corporate bonds and notes | 2,288,720 |  |  | 2,229,885 |  |  | 5,053 |  |  | 63,888 |
RMBS | 334,843 |  |  | 332,142 |  | (2) | 1,785 |  |  | 4,486 |
CMBS | 546,729 |  |  | 539,915 |  |  | 544 |  |  | 7,358 |
Other ABS | 712,748 |  |  | 704,662 |  |  | 814 |  |  | 8,900 |
Total securities available for sale | $ | 4,106,594 |  |  | $ | 4,028,987 |  | (3) | $ | 10,433 |  |  | $ | 88,040 |
______________________
(1) | Includes securities with a fair value of $10.7 million serving as collateral for FHLB advances.
(2) | Includes securities with a fair value of $77.7 million serving as collateral for FHLB advances.
(3) | Includes $7.4 million of fixed-maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below.
Gross Unrealized Losses and Fair Value of Available for Sale Securities For securities deemed “available for sale” and that are in an unrealized loss position, the following tables show the gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of March 31, 2019 and December 31, 2018 are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below.
|  | March 31, 2019
($ 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 |  | — |  |  | $ | — |  |  | $ | — |  |  | 9 |  |  | $ | 38,177 |  |  | $ | 528 |  |  | 9 |  |  | $ | 38,177 |  |  | $ | 528 |
State and municipal obligations |  | 1 |  |  | 6,487 |  |  | 27 |  |  | 3 |  |  | 10,983 |  |  | 274 |  |  | 4 |  |  | 17,470 |  |  | 301 |
Corporate bonds and notes |  | 54 |  |  | 220,831 |  |  | 2,676 |  |  | 148 |  |  | 656,876 |  |  | 11,839 |  |  | 202 |  |  | 877,707 |  |  | 14,515 |
RMBS |  | 9 |  |  | 60,465 |  |  | 124 |  |  | 24 |  |  | 67,863 |  |  | 2,626 |  |  | 33 |  |  | 128,328 |  |  | 2,750 |
CMBS |  | 33 |  |  | 138,708 |  |  | 621 |  |  | 19 |  |  | 41,516 |  |  | 838 |  |  | 52 |  |  | 180,224 |  |  | 1,459 |
Other ABS |  | 71 |  |  | 321,040 |  |  | 2,958 |  |  | 41 |  |  | 179,398 |  |  | 2,030 |  |  | 112 |  |  | 500,438 |  |  | 4,988 |
Total |  | 168 |  |  | $ | 747,531 |  |  | $ | 6,406 |  |  | 244 |  |  | $ | 994,813 |  |  | $ | 18,135 |  |  | 412 |  |  | $ | 1,742,344 |  |  | $ | 24,541 |
|  | December 31, 2018
($ 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 |  |  | $ | 27,415 |  |  | $ | 796 |  |  | 8 |  |  | $ | 23,476 |  |  | $ | 712 |  |  | 10 |  |  | $ | 50,891 |  |  | $ | 1,508 |
State and municipal obligations |  | 12 |  |  | 41,263 |  |  | 955 |  |  | 16 |  |  | 39,982 |  |  | 945 |  |  | 28 |  |  | 81,245 |  |  | 1,900 |
Corporate bonds and notes |  | 330 |  |  | 1,208,430 |  |  | 36,284 |  |  | 126 |  |  | 601,533 |  |  | 27,604 |  |  | 456 |  |  | 1,809,963 |  |  | 63,888 |
RMBS |  | 15 |  |  | 92,315 |  |  | 782 |  |  | 28 |  |  | 77,395 |  |  | 3,704 |  |  | 43 |  |  | 169,710 |  |  | 4,486 |
CMBS |  | 62 |  |  | 328,696 |  |  | 3,973 |  |  | 33 |  |  | 125,728 |  |  | 3,385 |  |  | 95 |  |  | 454,424 |  |  | 7,358 |
Other ABS |  | 129 |  |  | 503,109 |  |  | 7,917 |  |  | 26 |  |  | 89,628 |  |  | 983 |  |  | 155 |  |  | 592,737 |  |  | 8,900 |
Total |  | 550 |  |  | $ | 2,201,228 |  |  | $ | 50,707 |  |  | 237 |  |  | $ | 957,742 |  |  | $ | 37,333 |  |  | 787 |  |  | $ | 3,158,970 |  |  | $ | 88,040 |
Although we held securities in an unrealized loss position as of March 31, 2019, 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 March 31, 2019 were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect to recover the amortized cost basis of these securities. As of March 31, 2019, 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, 2019. Other-than-temporary Impairment Activity. To the extent we determine that a security is deemed to have had an other-than-temporary impairment, an impairment loss is recognized. We recognized no other-than-temporary impairment losses in earnings during the three months ended March 31, 2019 and $0.8 million of other-than-temporary impairment losses in earnings for the three months ended March 31, 2018. There were no other-than-temporary impairment losses recognized in accumulated other comprehensive income (loss) for those periods. 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) | March 31, 2019 |  | December 31, 2018
Trading securities: |  |  |
State and municipal obligations | $ | 128,339 |  |  | $ | 168,359 |
Corporate bonds and notes | 203,014 |  |  | 228,151 |
RMBS | 18,257 |  |  | 21,083 |
CMBS | 34,382 |  |  | 51,478 |
Total | $ | 383,992 |  |  | $ | 469,071 |
Securities Lending Agreements We participate in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. See Notes 2 and 6 of Notes to Consolidated Financial Statements in our 2018 Form 10-K for additional information about our securities lending agreements. Key balances related to our securities lending agreements consisted of the following as of the dates indicated:
(In thousands) | March 31, 2019 |  | December 31, 2018
Loaned securities (1): |  |  |
U.S. government and agency securities | $ | — |  |  | $ | 9,987 |
Corporate bonds and notes | 6,526 |  |  | 7,818 |
Equity securities | 16,080 |  |  | 10,055 |
Total loaned securities, at fair value | $ | 22,606 |  |  | $ | 27,860 |
Total loaned securities, at amortized cost | $ | 22,537 |  |  | $ | 28,992 |
Securities collateral on deposit from Borrowers (2) | 17,372 |  |  | 16,815 |
Reinvested cash collateral, at estimated fair value (3) | 6,233 |  |  | 11,699 |
______________________
(1) | Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting.
(2) | Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements.
(3) | All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets.
Net Gains (Losses) on Investments and Other Financial Instruments Net gains (losses) on investments and other financial instruments consisted of:
| Three Months Ended March 31,
(In thousands) | 2019 |  | 2018
Net realized gains (losses): |  |  |
Fixed-maturities available for sale (1) | $ | (495 | ) |  | $ | (3,120 | )
Equity securities | (680 | ) |  | 142 |
Trading securities | (684 | ) |  | (538 | )
Other invested assets | 87 |  |  | 62 |
Other gains (losses) | 85 |  |  | 12 |
Net realized gains (losses) on investments | (1,687 | ) |  | (3,442 | )
Other-than-temporary impairment losses | — |  |  | (844 | )
Net unrealized gains (losses) on investment securities | 19,469 |  |  | (12,804 | )
Total net gains (losses) on investments | 17,782 |  |  | (17,090 | )
Net gains (losses) on other financial instruments | 4,131 |  |  | (1,797 | )
Net gains (losses) on investments and other financial instruments | $ | 21,913 |  |  | $ | (18,887 | )
______________________ (1)Components of net realized gains (losses) on fixed-maturities available for sale include:
| Three Months Ended March 31,
(In thousands) | 2019 |  | 2018
Gross investment gains from sales and redemptions | $ | 4,165 |  |  | $ | 598 |
Gross investment losses from sales and redemptions | (4,660 | ) |  | (3,718 | )
Net Unrealized Gains (Losses) on Investment Securities For each period indicated, the net change in unrealized gains (losses) on investment securities shown below represents a component of net gains (losses) on investments and other financial instruments. The net changes in unrealized gains (losses) on trading securities and equity securities that were still held at each period end were as follows:
| Three Months Ended March 31,
(In thousands) | 2019 |  | 2018
Net changes in unrealized gains (losses): |  |  |
Trading securities | $ | 8,587 |  |  | $ | (11,420 | )
Equity securities | 7,919 |  |  | (1,806 | )
Net changes in unrealized gains (losses) on investment securities | $ | 16,506 |  |  | $ | (13,226 | )
Contractual Maturities The contractual maturities of fixed-maturity investments available for sale were as follows:
| March 31, 2019
| Available for Sale
(In thousands) | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 93,413 |  |  | $ | 93,208 |
Due after one year through five years (1) | 828,387 |  |  | 832,653 |
Due after five years through 10 years (1) | 1,051,235 |  |  | 1,060,529 |
Due after 10 years (1) | 369,044 |  |  | 376,401 |
RMBS (2) | 348,746 |  |  | 350,238 |
CMBS (2) | 512,190 |  |  | 515,604 |
Other ABS (2) | 679,444 |  |  | 675,477 |
Total (3) | $ | 3,882,459 |  |  | $ | 3,904,110 |
______________________
(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.
(3) | Includes securities loaned under securities lending agreements with a fair value of $6.5 million.
Other For the three months ended March 31, 2019, we did not transfer any securities from the available for sale or trading categories. At March 31, 2019 and December 31, 2018, we had aggregate amounts of $114.6 million and $88.4 million, respectively, of U.S. government and agency securities and RMBS, classified as fixed-maturities available for sale within our investment securities portfolio, serving as collateral for our FHLB advances. See Note 12 for additional information. Our investments include securities on deposit with various state insurance commissioners of $16.7 million and $17.6 million at March 31, 2019 and December 31, 2018, respectively.

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