Investments

Our held to maturity and available for sale securities within our investment portfolio consisted of the following as of the dates indicated:



	September 30, 2014
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
State and municipal obligations	$	50	$	50	$	—	$	—
	$	50	$	50	$	—	$	—
Fixed-maturities available for sale:
U.S. government and agency securities	$	43,178	$	43,314	$	171	$	35
State and municipal obligations	26,788		27,932		1,175		31
Corporate bonds and notes	124,536		125,898		2,194		832
RMBS	76,139		77,431		1,292		—
CMBS	31,617		31,546		66		137
Other ABS	126,392		124,721		13		1,684
Foreign government and agency securities	19,303		19,626		364		41
Other investments	202		202		—		—
	$	448,155	$	450,670	$	5,275	$	2,760
Equity securities available for sale (1)	$	78,106	$	144,593	$	66,487	$	—
Total debt and equity securities	$	526,311	$	595,313	$	71,762	$	2,760

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(1)	Comprising broadly diversified domestic equity mutual funds ($137.0 million fair value) and various preferred and common stocks invested across numerous companies and industries ($7.6 million fair value).



	December 31, 2013
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities held to maturity:
State and municipal obligations	$	358	$	351	$	—	$	7
	$	358	$	351	$	—	$	7
Fixed-maturities available for sale:
U.S. government and agency securities	$	8,939	$	9,106	$	224	$	57
State and municipal obligations	26,489		25,946		26		569
Corporate bonds and notes	11,951		12,045		578		484
RMBS	72,665		73,115		450		—
Other investments	341		341		—		—
	$	120,385	$	120,553	$	1,278	$	1,110
Equity securities available for sale (1)	$	78,106	$	135,168	$	57,062	$	—
Total debt and equity securities	$	198,849	$	256,072	$	58,340	$	1,117

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(1)	Comprising broadly diversified domestic equity mutual funds ($128.3 million fair value) and various preferred and common stocks invested across numerous companies and industries ($6.9 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)	September 30, 2014		December 31, 2013
Trading securities:
U.S. government and agency securities	$	249,102	$	393,815
State and municipal obligations	605,255		595,070
Corporate bonds and notes	881,362		1,024,574
RMBS	221,820		487,239
CMBS	272,281		288,895
Other ABS	136,802		195,816
Foreign government and agency securities	23,744		40,657
Equity securities	88,397		90,604
Other investments	733		759
Total	$	2,479,496	$	3,117,429

For trading securities that were still held at September 30, 2014 and December 31, 2013, we had net unrealized gains during 2014 and net unrealized losses during 2013 associated with those securities in the amount of $87.4 million and $140.9 million, respectively.

Net realized and unrealized (losses) gains on investments consisted of:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2014			2013			2014			2013
Net realized gains (losses):
Fixed-maturities held to maturity	$	—		$	—		$	(9	)	$	2
Fixed-maturities available for sale	(541		)	443			(335		)	1,312
Equities available for sale	—			—			—			349
Trading securities	119			2,196			(4,333		)	15,212
Short-term investments	—			—			—			2
Other invested assets	—			485			—			8,841
Other	531			70			478			93
Net realized gains (losses) on investments	109			3,194			(4,199		)	25,811
Unrealized (losses) gains on trading securities	(7,663		)	(12,666		)	107,865			(169,107		)
Unrealized (losses) gains on other invested assets	(285		)	2,340			165			405
Total (losses) gains on investments	$	(7,839	)	$	(7,132	)	$	103,831		$	(142,891	)

As part of the Freddie Mac Agreement, Radian Guaranty had $209 million and $205 million at September 30, 2014 and December 31, 2013, respectively, in a collateral account currently invested primarily in trading securities, which is pledged to cover Loss Mitigation Activity on the loans subject to the agreement. A portion of the funds deposited may be released to Radian Guaranty over time.

As of September 30, 2014 and December 31, 2013, our investment portfolio included no Sovereign securities of the Stressed European Countries which have Sovereign obligations that have been under particular stress due to economic uncertainty, potential restructuring and ratings downgrades, and included no securities of any other countries under similar stress.

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:



September 30, 2014: ($ 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	$	7,114	$	35	—	$	—	$	—	2	$	7,114	$	35
State and municipal obligations	7	426		23		1	5,726		8		8	6,152		31
Corporate bonds and notes	20	57,381		713		1	1,042		119		21	58,423		832
CMBS	5	21,495		137		—	—		—		5	21,495		137
Other ABS	28	109,990		1,684		—	—		—		28	109,990		1,684
Foreign government and agency securities	5	2,726		41		—	—		—		5	2,726		41
Total	67	$	199,132	$	2,633	2	$	6,768	$	127	69	$	205,900	$	2,760



December 31, 2013: ($ 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	1	$	5,401	$	57	—	$	—	$	—	1	$	5,401	$	57
State and municipal obligations	4	14,502		42		2	5,514		534		6	20,016		576
Corporate bonds and notes	—	—		—		2	2,966		484		2	2,966		484
Total	5	$	19,903	$	99	4	$	8,480	$	1,018	9	$	28,383	$	1,117

During the first nine months of 2014 and 2013, there were no credit losses recognized in earnings.

Impairments 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 fair value (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 have had an other-than-temporary impairment, an impairment loss is recognized.

We had securities in an unrealized loss position that we did not consider to be other-than-temporarily impaired as of September 30, 2014. For all investment categories, the unrealized losses of 12 months or greater duration as of September 30, 2014, were generally caused by interest rate or credit spread movements since the purchase date. As of September 30, 2014, 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. As of September 30, 2014, 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 not be required to sell the securities before recovery of their cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at September 30, 2014.

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



	September 30, 2014
	Held to Maturity				Available for Sale
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less (1)	$	50	$	50	$	77	$	77
Due after one year through five years (1)	—		—		76,568		76,680
Due after five years through ten years (1)	—		—		64,406		65,503
Due after ten years (1)	—		—		72,956		74,712
RMBS (2)	—		—		76,139		77,431
CMBS (2)	—		—		31,617		31,546
Other ABS (2)	—		—		126,392		124,721
Total	$	50	$	50	$	448,155	$	450,670

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(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.