Note 6. Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $16.4 million and $16.3 million at December 31, 2014 and 2013, respectively.

Available-for-Sale Investments

Available-for-sale investments at March 31, 2015 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	99,722	$	5,658	$	(64)	$	–	$	105,316
U.S. government agency mortgage-backed securities		30,569		2,614		(39)		(3)		33,141
Obligations of states and political subdivisions		165,724		13,052		(298)		(10)		178,468
Corporate securities		885,470		44,426		(2,522)		(2,966)		924,408
Mortgage-backed securities		19,874		806		(1)		–		20,679
Redeemable preferred stocks		18,052		521		(253)		(24)		18,296
Common stocks		17,975		6,719		–		(40)		24,654
	$	1,237,386	$	73,796	$	(3,177)	$	(3,043)	$	1,304,962

Available-for-sale investments at March 31, 2014 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	49,883	$	1,475	$	–	$	(1,004)	$	50,354
U.S. government agency mortgage-backed securities		36,258		2,558		(4)		(425)		38,387
Obligations of states and political subdivisions		166,311		4,834		(308)		(3,627)		167,210
Corporate securities		834,923		26,075		(3,794)		(25,875)		831,329
Mortgage-backed securities		12,425		279		(3)		(514)		12,187
Redeemable preferred stocks		18,445		283		(82)		(1,113)		17,533
Common stocks		17,299		3,987		(1)		(10)		21,275
	$	1,135,544	$	39,491	$	(4,192)	$	(32,568)	$	1,138,275

The available-for-sale tables include gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

We sold available-for-sale securities with a fair value of $109.1 million, $170.0 million and $165.1 million in fiscal 2015, 2014 and 2013, respectively. The gross realized gains on these sales totaled $4.6 million, $5.0 million and $9.5 million in fiscal 2015, 2014 and 2013, respectively. We realized gross losses on these sales of $0.7 million, $1.4 million and $0.7 million in fiscal 2015, 2014 and 2013, respectively.

The unrealized losses of more than twelve months in the available-for-sale tables are considered temporary declines. We track each investment with an unrealized loss and evaluate them on an individual basis for other-than-temporary impairments including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management’s future plans. Certain of these investments may have declines determined by management to be other-than-temporary and we recognized these write-downs through earnings. There were no write downs in fiscal 2015, 2014 and 2013.

The investment portfolio primarily consists of corporate securities and U.S. government securities. We believe we monitor our investments as appropriate. Our methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors, including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management’s attention that would lead to the belief that each issuer would not have the ability to meet the remaining contractual obligations of the security, including payment at maturity. We have the ability and intent not to sell our fixed maturity and common stock investments for a period of time sufficient to allow us to recover our costs.

The portion of other-than-temporary impairment related to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of mortgage backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

There were no credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in accumulated other comprehensive income (loss) for fiscal 2015 or 2014.

The adjusted cost and estimated market value of available-for-sale investments by contractual maturity, were as follows:

		March 31, 2015				March 31, 2014
		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
		(In thousands)
Due in one year or less	$	36,355	$	37,055	$	20,235	$	20,475
Due after one year through five years		198,488		209,404		185,447		194,563
Due after five years through ten years		474,639		492,782		350,048		350,953
Due after ten years		472,003		502,092		531,645		521,289
		1,181,485		1,241,333		1,087,375		1,087,280

Mortgage backed securities		19,874		20,679		12,425		12,187
Redeemable preferred stocks		18,052		18,296		18,445		17,533
Equity securities		17,975		24,654		17,299		21,275
	$	1,237,386	$	1,304,962	$	1,135,544	$	1,138,275

Investments, other

The carrying value of other investments was as follows:

		March 31,
		2015		2014
		(In thousands)
Mortgage loans, net	$	161,851	$	159,552
Short-term investments		47,739		44,700
Real estate		34,597		18,878
Policy loans		16,431		16,973
Other equity investments		8,102		8,747
	$	268,720	$	248,850

Mortgage loans are carried at the unpaid balance, less an allowance for probable losses and any unamortized premium or discount. The allowance for probable losses was $0.4 million as of March 31, 2015 and 2014. The estimated fair value of these loans as of March 31, 2015 and 2014 approximated the carrying value. These loans represent first lien mortgages held by us.

Short-term investments consist primarily of investments in money market funds, mutual funds and any other investments with short-term characteristics that have original maturities of less than one year at acquisition. These investments are recorded at cost, which approximates fair value.

Real estate obtained through foreclosure and held for sale is carried at the lower of fair value at time of foreclosure or current estimated fair value less cost to sell. Other equity investments are carried at cost and assessed for impairment.

Insurance policy loans are carried at their unpaid balance.