Investments Available for Sale

Investments available for sale consist of the following:



December 31, 2016 (In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury securities	$	195,990	$	55	$	(4,497	)	$	191,548
U.S. agency securities	18,785		—		(344		)	18,441
U.S. agency mortgage-backed securities	324,654		335		(8,495		)	316,494
Municipal debt securities(1)	334,048		3,649		(3,373		)	334,324
Corporate debt securities(2)	457,842		2,343		(3,828		)	456,357
Residential and commercial mortgage securities	68,430		488		(582		)	68,336
Asset-backed securities	127,359		260		(447		)	127,172
Money market funds	102,430		—		—			102,430
Total investments available for sale	$	1,629,538	$	7,130	$	(21,566	)	$	1,615,102



December 31, 2015 (In thousands)	Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
U.S. Treasury securities	$	178,460	$	235	$	(1,088	)	$	177,607
U.S. agency securities	13,955		5		(178		)	13,782
U.S. agency mortgage-backed securities	160,181		474		(1,053		)	159,602
Municipal debt securities(1)	272,733		7,357		(262		)	279,828
Corporate debt securities(2)	399,246		1,338		(3,852		)	396,732
Residential and commercial mortgage securities	56,380		97		(1,121		)	55,356
Asset-backed securities	127,919		29		(1,319		)	126,629
Money market funds	67,098		—		—			67,098
Total investments available for sale	$	1,275,972	$	9,535	$	(8,873	)	$	1,276,634

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	December 31,		December 31,
(1) The following table summarizes municipal debt securities as of :	2016		2015
Special revenue bonds	63.6	%	70.4	%
General obligation bonds	29.7		24.5
Certificate of participation bonds	4.9		4.0
Tax allocation bonds	1.1		1.1
Special tax bonds	0.7		—
Total	100.0	%	100.0	%



	December 31,		December 31,
(2) The following table summarizes corporate debt securities as of :	2016		2015
Financial	40.6	%	44.9	%
Consumer, non-cyclical	18.6		14.8
Energy	9.3		9.0
Consumer, cyclical	6.3		6.2
Utilities	6.0		5.0
Communications	6.0		7.1
Industrial	5.6		5.2
Technology	4.3		3.8
Basic materials	3.3		4.0
Total	100.0	%	100.0	%

The amortized cost and fair value of investments available for sale at December 31, 2016, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories.



(In thousands)	Amortized Cost		Fair Value
U.S. Treasury securities:
Due in 1 year	$	44,516	$	44,519
Due after 1 but within 5 years	31,380		31,075
Due after 5 but within 10 years	106,366		102,835
Due after 10 years	13,728		13,119
Subtotal	195,990		191,548
U.S. agency securities:
Due in 1 year	—		—
Due after 1 but within 5 years	18,785		18,441
Subtotal	18,785		18,441
Municipal debt securities:
Due in 1 year	4,475		4,478
Due after 1 but within 5 years	110,649		109,988
Due after 5 but within 10 years	130,963		132,079
Due after 10 years	87,961		87,779
Subtotal	334,048		334,324
Corporate debt securities:
Due in 1 year	42,229		42,209
Due after 1 but within 5 years	252,946		252,684
Due after 5 but within 10 years	157,582		156,512
Due after 10 years	5,085		4,952
Subtotal	457,842		456,357
U.S. agency mortgage-backed securities	324,654		316,494
Residential and commercial mortgage securities	68,430		68,336
Asset-backed securities	127,359		127,172
Money market funds	102,430		102,430
Total investments available for sale	$	1,629,538	$	1,615,102

Gross gains and losses realized on the sale of investments available for sale were as follows:



	Year Ended December 31,
(In thousands)	2016		2015		2014
Realized gross gains	$	2,822	$	3,908	$	1,368
Realized gross losses	788		1,073		443

The fair value of investments in an unrealized loss position and the related unrealized losses were as follows:



	Less than 12 months					12 months or more					Total
December 31, 2016 (In thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. Treasury securities	$	160,018	$	(4,497	)	$	—	$	—		$	160,018	$	(4,497	)
U.S. agency securities	18,441		(344		)	—		—			18,441		(344		)
U.S. agency mortgage-backed securities	289,282		(8,402		)	1,812		(93		)	291,094		(8,495		)
Municipal debt securities	149,368		(3,351		)	6,015		(22		)	155,383		(3,373		)
Corporate debt securities	213,965		(3,704		)	8,344		(124		)	222,309		(3,828		)
Residential and commercial mortgage securities	18,026		(434		)	14,014		(148		)	32,040		(582		)
Asset-backed securities	28,294		(57		)	47,597		(390		)	75,891		(447		)
Total	$	877,394	$	(20,789	)	$	77,782	$	(777	)	$	955,176	$	(21,566	)



	Less than 12 months					12 months or more					Total
December 31, 2015 (In thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
U.S. Treasury securities	$	110,699	$	(1,088	)	$	—	$	—		$	110,699	$	(1,088	)
U.S. agency securities	11,362		(178		)	—		—			11,362		(178		)
U.S. agency mortgage-backed securities	101,465		(915		)	3,683		(138		)	105,148		(1,053		)
Municipal debt securities	47,850		(255		)	1,254		(7		)	49,104		(262		)
Corporate debt securities	252,792		(3,447		)	9,404		(405		)	262,196		(3,852		)
Residential and commercial mortgage securities	23,360		(458		)	26,075		(663		)	49,435		(1,121		)
Asset-backed securities	86,431		(871		)	26,364		(448		)	112,795		(1,319		)
Total	$	633,959	$	(7,212	)	$	66,780	$	(1,661	)	$	700,739	$	(8,873	)

The gross unrealized losses on these investment securities are principally associated with the changes in market interest rates and credit spreads subsequent to their purchase. Each issuer is current on its scheduled interest and principal payments. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether an impairment is other-than-temporary. We recorded other-than-temporary impairments of $0.1 million and $0.3 million in the years ended December 31, 2016 and 2015, respectively, on securities in an unrealized loss position. The impairments resulted from our intent to sell these securities subsequent to the reporting date. There were no other-than-temporary impairments of investments in the year ended December 31, 2014.

The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $8.5 million at December 31, 2016 and $8.5 million at December 31, 2015. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $349.6 million at December 31, 2016 and $194.5 million at December 31, 2015.

Net investment income consists of:



	Year Ended December 31,
(In thousands)	2016			2015			2014
Fixed maturities	$	29,865		$	21,693		$	13,356
Short-term investments	142			63			56
Gross investment income	30,007			21,756			13,412
Investment expenses	(2,117		)	(1,871		)	(1,127		)
Net investment income	$	27,890		$	19,885		$	12,285