NOTE 3. Debt and Equity Securities:

Investments in debt securities, classified as available-for-sale, are as follows:


	Amortized cost		Gross unrealized					Estimated fair value
(in thousands)	Amortized cost		gains		losses			Estimated fair value
December 31, 2015
U.S. Treasury bonds	$	130,252	$	421	$	(1,301	)	$	129,372
Municipal bonds		692,000		12,640		(845	)		703,795
Foreign government bonds		129,984		1,132		(1,015	)		130,101
Governmental agency bonds		419,869		1,023		(2,801	)		418,091
Governmental agency mortgage-backed securities		2,065,728		4,984		(15,039	)		2,055,673
U.S. corporate debt securities		642,869		4,297		(12,483	)		634,683
Foreign corporate debt securities		210,162		1,248		(3,778	)		207,632
	$	4,290,864	$	25,745	$	(37,262	)	$	4,279,347
December 31, 2014
U.S. Treasury bonds	$	64,195	$	968	$	(181	)	$	64,982
Municipal bonds		577,703		10,981		(1,007	)		587,677
Foreign government bonds		133,365		1,604		(31	)		134,938
Governmental agency bonds		198,330		1,562		(2,018	)		197,874
Governmental agency mortgage-backed securities		1,812,766		8,491		(9,095	)		1,812,162
Non-agency mortgage-backed securities		15,949		1,306		(717	)		16,538
U.S. corporate debt securities		446,630		7,483		(1,984	)		452,129
Foreign corporate debt securities		183,528		1,681		(1,257	)		183,952
	$	3,432,466	$	34,076	$	(16,290	)	$	3,450,252

Investments in equity securities, classified as available-for-sale, are as follows:

	Cost		Gross unrealized					Estimated fair value
(in thousands)	Cost		gains		losses			Estimated fair value
December 31, 2015
Preferred stocks	$	18,305	$	420	$	(3,258	)	$	15,467
Common stocks		307,429		13,103		(14,714	)		305,818
	$	325,734	$	13,523	$	(17,972	)	$	321,285
December 31, 2014
Preferred stocks	$	14,976	$	596	$	(47	)	$	15,525
Common stocks		378,938		16,680		(8,731	)		386,887
	$	393,914	$	17,276	$	(8,778	)	$	402,412

Sales of debt and equity securities resulted in realized gains of $8.7 million, $34.1 million and $17.2 million and realized losses of $10.0 million, $9.1 million and $15.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Gross unrealized losses on investments in debt and equity securities are as follows:

	Less than 12 months					12 months or longer					Total
(in thousands)	Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses			Estimated fair value		Unrealized losses
December 31, 2015
Debt securities:
U.S. Treasury bonds	$	105,701	$	(1,285	)	$	1,654	$	(16	)	$	107,355	$	(1,301	)
Municipal bonds		133,465		(733	)		13,190		(112	)		146,655		(845	)
Foreign government bonds		13,601		(890	)		267		(125	)		13,868		(1,015	)
Governmental agency bonds		191,035		(2,497	)		18,237		(304	)		209,272		(2,801	)
Governmental agency mortgage-backed securities		1,096,301		(9,424	)		213,020		(5,615	)		1,309,321		(15,039	)
U.S. corporate debt securities		361,842		(11,272	)		13,511		(1,211	)		375,353		(12,483	)
Foreign corporate debt securities		102,801		(2,725	)		11,246		(1,053	)		114,047		(3,778	)
Total debt securities		2,004,746		(28,826	)		271,125		(8,436	)		2,275,871		(37,262	)
Equity securities		191,248		(12,068	)		31,974		(5,904	)		223,222		(17,972	)
Total	$	2,195,994	$	(40,894	)	$	303,099	$	(14,340	)	$	2,499,093	$	(55,234	)
December 31, 2014
Debt securities:
U.S. Treasury bonds	$	8,122	$	(27	)	$	15,124	$	(154	)	$	23,246	$	(181	)
Municipal bonds		137,755		(689	)		19,625		(318	)		157,380		(1,007	)
Foreign government bonds		5,653		(31	)		—		—			5,653		(31	)
Governmental agency bonds		27,479		(88	)		127,936		(1,930	)		155,415		(2,018	)
Governmental agency mortgage-backed securities		383,717		(1,612	)		300,918		(7,483	)		684,635		(9,095	)
Non-agency mortgage-backed securities		—		—			5,611		(717	)		5,611		(717	)
U.S. corporate debt securities		141,636		(1,881	)		8,191		(103	)		149,827		(1,984	)
Foreign corporate debt securities		57,005		(1,247	)		1,492		(10	)		58,497		(1,257	)
Total debt securities		761,367		(5,575	)		478,897		(10,715	)		1,240,264		(16,290	)
Equity securities		208,922		(8,587	)		2,340		(191	)		211,262		(8,778	)
Total	$	970,289	$	(14,162	)	$	481,237	$	(10,906	)	$	1,451,526	$	(25,068	)

Investments in debt securities at December 31, 2015, by contractual maturities, are as follows:

(in thousands)	Due in one year or less		Due after one through five years		Due after five through ten years		Due after ten years		Total
U.S. Treasury bonds
Amortized cost	$	25,982	$	76,874	$	11,875	$	15,521	$	130,252
Estimated fair value	$	25,959	$	76,462	$	11,765	$	15,186	$	129,372
Municipal bonds
Amortized cost	$	47,506	$	298,071	$	208,057	$	138,366	$	692,000
Estimated fair value	$	47,580	$	300,859	$	213,119	$	142,237	$	703,795
Foreign government bonds
Amortized cost	$	6,169	$	110,707	$	5,461	$	7,647	$	129,984
Estimated fair value	$	6,199	$	111,643	$	5,464	$	6,795	$	130,101
Governmental agency bonds
Amortized cost	$	31,778	$	331,052	$	28,156	$	28,883	$	419,869
Estimated fair value	$	31,768	$	329,700	$	28,443	$	28,180	$	418,091
U.S. corporate debt securities
Amortized cost	$	16,569	$	298,860	$	264,527	$	62,913	$	642,869
Estimated fair value	$	16,711	$	297,838	$	259,775	$	60,359	$	634,683
Foreign corporate debt securities
Amortized cost	$	13,340	$	92,104	$	90,555	$	14,163	$	210,162
Estimated fair value	$	13,376	$	91,836	$	88,310	$	14,110	$	207,632
Total debt securities excluding mortgage-backed securities
Amortized cost	$	141,344	$	1,207,668	$	608,631	$	267,493	$	2,225,136
Estimated fair value	$	141,593	$	1,208,338	$	606,876	$	266,867	$	2,223,674
Total mortgage-backed securities
Amortized cost									$	2,065,728
Estimated fair value									$	2,055,673
Total debt securities
Amortized cost									$	4,290,864
Estimated fair value									$	4,279,347

Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity because borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties.

The table below outlines the composition of the investment portfolio, by credit rating, as of December 31, 2015:

	A- Ratings or higher			BBB+ to BBB- Ratings			Non-Investment Grade			Total
(in thousands, except percentages)	Estimated fair value		Percentage	Estimated fair value		Percentage	Estimated fair value		Percentage	Estimated fair value		Percentage
December 31, 2015
Debt securities:
U.S. Treasury bonds	$	129,372	100.0	$	—	—	$	—	—	$	129,372	100.0
Municipal bonds		675,257	95.9		23,188	3.3		5,350	0.8		703,795	100.0
Foreign government bonds		121,975	93.8		7,187	5.5		939	0.7		130,101	100.0
Governmental agency bonds		418,091	100.0		—	—		—	—		418,091	100.0
Governmental agency mortgage-backed securities		2,055,673	100.0		—	—		—	—		2,055,673	100.0
U.S. corporate debt securities		293,413	46.2		167,292	26.4		173,978	27.4		634,683	100.0
Foreign corporate debt securities		113,182	54.5		52,912	25.5		41,538	20.0		207,632	100.0
Total debt securities		3,806,963	88.9		250,579	5.9		221,805	5.2		4,279,347	100.0
Preferred stocks		—	—		8,850	57.2		6,617	42.8		15,467	100.0
Total	$	3,806,963	88.7	$	259,429	6.0	$	228,422	5.3	$	4,294,814	100.0

The credit ratings in the above table reflect published ratings obtained from Standard & Poor’s Rating Services, DBRS, Inc., Fitch Ratings, Inc. and Moody’s Investor Services, Inc. If a security was rated differently among the rating agencies, the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the ratings agencies; however, these securities have been included in the above table in the A- Ratings or higher category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.

As of December 31, 2015, the estimated fair value of total debt securities included $117.8 million of bank loans, of which $111.4 million was non-investment grade; $99.0 million of high yield corporate debt securities, all of which was non-investment grade; and $44.3 million of emerging market debt securities, of which $6.1 million was non-investment grade.

The table below outlines the composition of the investment portfolio in an unrealized loss position, by credit rating, as of December 31, 2015:

	A- Ratings or higher			BBB+ to BBB- Ratings			Non-Investment Grade			Total
(in thousands, except percentages)	Estimated fair value		Percentage	Estimated fair value		Percentage	Estimated fair value		Percentage	Estimated fair value		Percentage
December 31, 2015
Debt securities:
U.S. Treasury bonds	$	107,355	100.0	$	—	—	$	—	—	$	107,355	100.0
Municipal bonds		136,568	93.2		5,040	3.4		5,047	3.4		146,655	100.0
Foreign government bonds		5,824	42.0		7,105	51.2		939	6.8		13,868	100.0
Governmental agency bonds		209,272	100.0		—	—		—	—		209,272	100.0
Governmental agency mortgage-backed securities		1,309,321	100.0		—	—		—	—		1,309,321	100.0
U.S. corporate debt securities		134,224	35.8		112,373	29.9		128,756	34.3		375,353	100.0
Foreign corporate debt securities		40,094	35.2		38,891	34.1		35,062	30.7		114,047	100.0
Total debt securities		1,942,658	85.3		163,409	7.2		169,804	7.5		2,275,871	100.0
Preferred stocks		—	—		8,850	58.9		6,164	41.1		15,014	100.0
Total	$	1,942,658	84.8	$	172,259	7.5	$	175,968	7.7	$	2,290,885	100.0

As of December 31, 2015, the estimated fair value of total debt securities in an unrealized loss position included $87.3 million of bank loans, of which $82.9 million was non-investment grade; $75.8 million of high yield corporate debt securities, all of which was non-investment grade; and $39.1 million of emerging market debt securities, of which $6.1 million was non-investment grade.