Investments

Securities within our investment portfolio determined to be “held to maturity” and “available for sale” consisted of the following as of the dates indicated:



	March 31, 2013
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
Bonds and notes:
State and municipal obligations	$	427	$	421	$	—	$	6
	$	427	$	421	$	—	$	6
Fixed-maturities available for sale:
U.S. government and agency securities	$	3,434	$	3,741	$	307	$	—
State and municipal obligations	17,961		18,711		807		57
Corporate bonds and notes	14,686		15,341		1,026		371
RMBS	48		48		2		2
Other investments	423		464		41		—
	$	36,552	$	38,305	$	2,183	$	430
Equity securities available for sale (1)	$	88,260	$	123,050	$	34,790	$	—
Total debt and equity securities	$	125,239	$	161,776	$	36,973	$	436

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(1)	Comprising broadly diversified domestic equity mutual funds ($108.9 million fair value) and various preferred and common stocks invested across numerous companies and industries ($14.2 million fair value).



	December 31, 2012
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
Bonds and notes:
State and municipal obligations	$	679	$	676	$	3	$	6
	$	679	$	676	$	3	$	6
Fixed-maturities available for sale:
U.S. government and agency securities	$	4,969	$	5,305	$	336	$	—
State and municipal obligations	17,922		17,995		116		43
Corporate bonds and notes	15,618		16,369		1,110		359
RMBS	50		51		3		2
Other investments	922		976		54		—
	$	39,481	$	40,696	$	1,619	$	404
Equity securities available for sale (1)	$	88,260	$	112,139	$	23,879	$	—
Total debt and equity securities	$	128,420	$	153,511	$	25,501	$	410

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(1)	Comprising broadly diversified domestic equity mutual funds ($98.9 million fair value) and various preferred and common stocks invested across numerous companies and industries ($13.2 million fair value).

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, 2013		December 31, 2012
Trading securities:
U.S. government and agency securities	$	461,797	$	428,519
State and municipal obligations	670,385		669,975
Corporate bonds and notes	1,437,828		1,357,175
RMBS	599,471		663,307
CMBS	299,210		237,294
Other ABS	221,641		254,102
Foreign government securities (1)	—		117,686
Hybrid securities	144,012		211,944
Equity securities	128,217		153,722
Other investments	904		898
Total	$	3,963,465	$	4,094,622

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(1)	As of March 31, 2013, there were no foreign government securities in our investment portfolio. We sold our investment in foreign government securities during the first quarter of 2013, as our market view of these investments changed, and their performance did not meet our expectations.

For trading securities held at March 31, 2013 and December 31, 2012, we had net losses during 2013 and net gains during 2012 in the amount of $(10.5) million and $29.8 million, respectively.

The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” and “held to maturity”, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated:



March 31, 2013: ($ in thousands) Description of Securities	Less Than 12 Months					12 Months or Greater					Total
March 31, 2013: ($ in thousands) Description of Securities	# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses		# of securities	Fair Value		Unrealized Losses
State and municipal obligations	—	$	—	$	—	2	$	5,989	$	63	2	$	5,989	$	63
Corporate bonds and notes	—	—		—		5	4,855		371		5	4,855		371
RMBS	1	29		2		—	—		—		1	29		2
Total	1	$	29	$	2	7	$	10,844	$	434	8	$	10,873	$	436



December 31, 2012: ($ 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	—	$	—	$	—	2	$	6,004	$	49	2	$	6,004	$	49
Corporate bonds and notes	—	—		—		6	5,329		359		6	5,329		359
RMBS	1	31		2		—	—		—		1	31		2
Total	1	$	31	$	2	8	$	11,333	$	408	9	$	11,364	$	410

During the first three months of 2013 and 2012, there were no credit losses recognized in earnings.

Impairments of a security due to credit deterioration that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security are considered other-than-temporary. Other declines in the fair value of a security (for example, due to interest rate changes, sector credit rating changes or company-specific rating changes) that result in a conclusion that the present value of cash flows expected to be collected will not be sufficient to recover the amortized cost basis of the security, also may serve as a basis to conclude that an other-than-temporary impairment has occurred. To the extent we determine that a security is deemed to be other-than-temporarily impaired, we recognize an impairment loss.

We hold securities in an unrealized loss position that we did not consider to be other-than-temporarily impaired as of March 31, 2013. For all investment categories, the unrealized losses of 12 months or greater duration as of March 31, 2013, were generally caused by interest rate or credit spread movements since the purchase date of such securities. As of March 31, 2013, we expected the present value of cash flows to be collected from these securities to be sufficient to recover the amortized cost basis of these securities. At March 31, 2013, 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 have the ability to hold the securities until recovery or maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at March 31, 2013.

The contractual maturities of fixed-maturity investments are as follows:



	March 31, 2013
	Held to Maturity				Available for Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less (1)	$	—	$	—	$	5,242	$	5,274
Due after one year through five years (1)	120		120		11,183		11,346
Due after five years through ten years (1)	—		—		3,053		3,166
Due after ten years (1)	307		301		17,026		18,471
RMBS (2)	—		—		48		48
Total	$	427	$	421	$	36,552	$	38,305

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(1)	Actual maturities may differ as a result of calls before scheduled maturity.


(2)	RMBS are shown separately given their varying maturity dates.