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Note 5 - Investments | 3 Months Ended
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Mar. 31, 2020
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, 2020
(In thousands) | Amortized Cost |  | Fair Value |  | Gross Unrealized Gains |  | Gross Unrealized Losses
Fixed-maturities available for sale: |  |  |  |  |  |  |
U.S. government and agency securities | $ | 148,382 |  |  | $ | 159,240 |  |  | $ | 10,858 |  |  | $ | — |
State and municipal obligations | 111,831 |  |  | 116,975 |  |  | 5,462 |  |  | 318 |
Corporate bonds and notes | 2,239,543 |  |  | 2,268,850 |  |  | 77,884 |  |  | 48,577 |
RMBS | 747,271 |  |  | 779,590 |  |  | 33,122 |  |  | 803 |
CMBS | 609,518 |  |  | 610,877 |  |  | 13,356 |  |  | 11,997 |
Other ABS | 708,357 |  |  | 666,918 |  |  | 1,251 |  |  | 42,690 |
Foreign government and agency securities | 5,093 |  |  | 4,947 |  |  | — |  |  | 146 |
Total securities available for sale, including loaned securities | 4,569,995 |  |  | 4,607,397 |  |  | $ | 141,933 |  |  | $ | 104,531 |
Less: loaned securities | 5,379 |  |  | 3,784 |  |  |  |  |
Total fixed-maturities available for sale | $ | 4,564,616 |  |  | $ | 4,603,613 |  |  |  |  |  |  |
| December 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 | $ | 198,613 |  |  | $ | 199,928 |  |  | $ | 2,048 |  |  | $ | 733 |
State and municipal obligations | 112,003 |  |  | 119,994 |  |  | 8,032 |  |  | 41 |
Corporate bonds and notes | 2,136,819 |  |  | 2,241,280 |  |  | 106,189 |  |  | 1,728 |
RMBS | 766,429 |  |  | 779,354 |  |  | 14,452 |  |  | 1,527 |
CMBS | 593,647 |  |  | 608,015 |  |  | 14,993 |  |  | 625 |
Other ABS | 760,785 |  |  | 759,129 |  |  | 2,018 |  |  | 3,674 |
Foreign government and agency securities | 5,091 |  |  | 5,224 |  |  | 133 |  |  | — |
Total securities available for sale, including loaned securities | 4,573,387 |  |  | 4,712,924 |  |  | $ | 147,865 |  |  | $ | 8,328 |
Less: loaned securities | 23,853 |  |  | 24,013 |  |  |  |  |
Total fixed-maturities available for sale | $ | 4,549,534 |  |  | $ | 4,688,911 |  |  |  |  |  |  |
Gross Unrealized Losses and Fair Value of Available for Sale Securities For our available for sale securities 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, 2020 and December 31, 2019 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, 2020
($ 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 |  | 6 |  |  | $ | 19,560 |  |  | $ | 318 |  |  | — |  |  | $ | — |  |  | $ | — |  |  | 6 |  |  | $ | 19,560 |  |  | $ | 318 |
Corporate bonds and notes |  | 174 |  |  | 763,279 |  |  | 48,577 |  |  | — |  |  | — |  |  | — |  |  | 174 |  |  | 763,279 |  |  | 48,577 |
RMBS |  | 3 |  |  | 19,874 |  |  | 656 |  |  | 4 |  |  | 22,323 |  |  | 147 |  |  | 7 |  |  | 42,197 |  |  | 803 |
CMBS |  | 60 |  |  | 201,504 |  |  | 11,534 |  |  | 8 |  |  | 7,052 |  |  | 463 |  |  | 68 |  |  | 208,556 |  |  | 11,997 |
Other ABS |  | 151 |  |  | 483,803 |  |  | 29,259 |  |  | 26 |  |  | 122,186 |  |  | 13,431 |  |  | 177 |  |  | 605,989 |  |  | 42,690 |
Foreign government and agency securities |  | 1 |  |  | 4,947 |  |  | 146 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 4,947 |  |  | 146 |
Total |  | 395 |  |  | $ | 1,492,967 |  |  | $ | 90,490 |  |  | 38 |  |  | $ | 151,561 |  |  | $ | 14,041 |  |  | 433 |  |  | $ | 1,644,528 |  |  | $ | 104,531 |
|  | December 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 |  | 2 |  |  | $ | 26,142 |  |  | $ | 731 |  |  | 2 |  |  | $ | 2,529 |  |  | $ | 2 |  |  | 4 |  |  | $ | 28,671 |  |  | $ | 733 |
State and municipal obligations |  | 1 |  |  | 3,959 |  |  | 41 |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 3,959 |  |  | 41 |
Corporate bonds and notes |  | 25 |  |  | 110,871 |  |  | 1,728 |  |  | — |  |  | — |  |  | — |  |  | 25 |  |  | 110,871 |  |  | 1,728 |
RMBS |  | 27 |  |  | 184,378 |  |  | 535 |  |  | 16 |  |  | 36,192 |  |  | 992 |  |  | 43 |  |  | 220,570 |  |  | 1,527 |
CMBS |  | 36 |  |  | 109,589 |  |  | 478 |  |  | 8 |  |  | 6,346 |  |  | 147 |  |  | 44 |  |  | 115,935 |  |  | 625 |
Other ABS |  | 63 |  |  | 225,944 |  |  | 670 |  |  | 44 |  |  | 209,661 |  |  | 3,004 |  |  | 107 |  |  | 435,605 |  |  | 3,674 |
Total |  | 154 |  |  | $ | 660,883 |  |  | $ | 4,183 |  |  | 70 |  |  | $ | 254,728 |  |  | $ | 4,145 |  |  | 224 |  |  | $ | 915,611 |  |  | $ | 8,328 |
Impairment. We recognize an impairment on a security with an unrealized loss through the statement of operations if: (i) we intend to sell the impaired security; (ii) it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis; or (iii) the present value of cash flows we expect to collect is less than the amortized cost basis of the impaired security. If a sale is likely, the full amount of the impairment is recognized as a loss in the statement of operations. Otherwise, unrealized losses on securities are separated into: (i) the portion of loss that represents the credit loss and (ii) the portion that is due to other factors. As described in Note 1, ASU 2016-13 requires that the credit loss portion be recognized as a loss in the statement of operations, while the loss due to other factors is recognized in other comprehensive income (loss), net of taxes. Factors evaluated to determine if a credit loss exists include: (i) the extent to which the fair value is less than amortized cost; (ii) adverse conditions related to the security, industry sector or geographic area; (iii) downgrades in the security’s credit rating; and (iv) failure of the issuer to make scheduled payment. As of March 31, 2020, we evaluated these factors and determined there were no credit impairments indicated. To the extent we determine that a security is deemed credit-impaired, an impairment loss is recognized in earnings. On initial recognition and at each reporting date, we recognize an allowance for remaining lifetime expected credit losses. This amount is calculated as the difference between the amortized cost and the present value of future expected cash flows, limited to the difference between the carrying amount (i.e. fair value) and amortized cost. Subsequent changes (favorable and unfavorable) in expected credit losses are recognized immediately in net income as a credit loss expense or a reversal of credit loss expense. During the three months ended March 31, 2020, we recorded impairment losses in earnings of $0.6 million due to our intent to sell certain debt securities at a loss. We did not have the intent to sell any additional available for sale 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. Securities Lending Agreements We participate in a securities lending program whereby we loan certain securities in our investment portfolio to third-party borrowers for short periods of time. Although we report such securities at fair value within other assets in our condensed consolidated balance sheets, rather than within investments, the detailed information we provide in this Note 5 includes these securities. See Note 4 for additional detail on the loaned securities, and see Notes 2 and 6 of Notes to Consolidated Financial Statements in our 2019 Form 10-K for additional information about our accounting policies with respect to our securities lending agreements and the collateral requirements thereunder, respectively. All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $33.4 million and $42.4 million as of March 31, 2020 and December 31, 2019, respectively, may not be transferred or re-pledged unless the third-party borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. Net Gains (Losses) on Investments Net gains (losses) on investments consisted of:
| Three Months Ended March 31,
(In thousands) | 2020 |  | 2019
Net realized gains (losses): |  |  |
Fixed-maturities available for sale (1) | $ | 11,247 |  |  | $ | (495 | )
Trading securities | 49 |  |  | (684 | )
Equity securities | 310 |  |  | (680 | )
Other investments | 33 |  |  | 172 |
Net realized gains (losses) on investments | 11,639 |  |  | (1,687 | )
Impairment losses | (622 | ) |  | — |
Net unrealized gains (losses) on investments | (26,845 | ) |  | 19,469 |
Total net gains (losses) on investments | $ | (15,828 | ) |  | $ | 17,782 |
______________________ (1)Components of net realized gains (losses) on fixed-maturities available for sale include:
| Three Months Ended March 31,
(In thousands) | 2020 |  | 2019
Gross investment gains from sales and redemptions | $ | 11,899 |  |  | $ | 4,165 |
Gross investment losses from sales and redemptions | (652 | ) |  | (4,660 | )
The net changes in unrealized gains (losses) recognized in earnings on investments that were still held at each period-end were as follows:
| Three Months Ended March 31,
(In thousands) | 2020 |  | 2019
Net unrealized gains (losses) on investments still held: |  |  |
Trading securities | $ | (2,034 | ) |  | $ | 8,587 |
Equity securities | (24,020 | ) |  | 7,919 |
Other investments | 804 |  |  | — |
Net unrealized gains (losses) on investments still held | $ | (25,250 | ) |  | $ | 16,506 |
Contractual Maturities The contractual maturities of fixed-maturities available for sale were as follows:
| March 31, 2020
| Available for Sale
(In thousands) | Amortized Cost |  | Fair Value
Due in one year or less (1) | $ | 105,520 |  |  | $ | 104,855 |
Due after one year through five years (1) | 823,582 |  |  | 829,134 |
Due after five years through 10 years (1) | 1,082,394 |  |  | 1,089,685 |
Due after 10 years (1) | 493,353 |  |  | 526,338 |
RMBS (2) | 747,271 |  |  | 779,590 |
CMBS (2) | 609,518 |  |  | 610,877 |
Other ABS (2) | 708,357 |  |  | 666,918 |
Total | 4,569,995 |  |  | 4,607,397 |
Less: loaned securities | 5,379 |  |  | 3,784 |
Total fixed-maturities available for sale | $ | 4,564,616 |  |  | $ | 4,603,613 |
______________________
(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 For the three months ended March 31, 2020, we did not transfer any securities to or from the available for sale or trading categories. Our fixed-maturities available for sale include securities totaling $17.1 million and $16.8 million at March 31, 2020 and December 31, 2019, respectively, on deposit and serving as collateral with various state regulatory authorities. Our fixed-maturities available for sale also include securities serving as collateral for our FHLB advances. See Note 11 for additional information about our FHLB advances.

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