Investments

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



	December 31, 2015
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	13,773	$	13,752	$	—	$	21
State and municipal obligations	36,920		37,900		1,100		120
Corporate bonds and notes	815,024		802,193		4,460		17,291
RMBS	226,744		224,905		625		2,464
CMBS	415,780		406,910		69		8,939
Other ABS	359,452		355,494		16		3,974
Foreign government and agency securities	25,663		24,307		27		1,383
	$	1,893,356	$	1,865,461	$	6,297	$	34,192
Equity securities available for sale (1)	$	75,538	$	75,430	$	—	$	108
Total debt and equity securities	$	1,968,894	$	1,940,891	$	6,297	$	34,300

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(1)	Comprising primarily a multi-sector exchange-traded fund.



	December 31, 2014
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	5,709	$	5,751	$	48	$	6
State and municipal obligations	17,727		18,910		1,183		—
Corporate bonds and notes	277,678		284,408		7,288		558
RMBS	41,467		42,520		1,053		—
CMBS	57,358		58,234		876		—
Other ABS	109,420		107,701		8		1,727
Foreign government and agency securities	19,301		19,366		307		242
	$	528,660	$	536,890	$	10,763	$	2,533
Equity securities available for sale (1)	$	76,900	$	143,368	$	66,468	$	—
Total debt and equity securities	$	605,560	$	680,258	$	77,231	$	2,533

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(1)	Comprising primarily broadly diversified domestic equity mutual funds.

The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated:



	December 31,
(In thousands)	2015		2014
Trading securities:
U.S. government and agency securities	$	129,913	$	134,530
State and municipal obligations	303,946		343,926
Corporate bonds and notes	580,993		708,361
RMBS	72,192		89,810
CMBS	137,678		188,615
Other ABS	16,131		77,755
Foreign government and agency securities	13,268		18,331
Equity securities	25,016		72,256
Total	$	1,279,137	$	1,633,584

For trading securities that were held at December 31, 2015 and 2014, we had net unrealized losses during 2015 and net unrealized gains during 2014 associated with those securities in the amount of $25.2 million and $65.7 million, respectively.

As of December 31, 2015 and 2014, our investment portfolio included no Sovereign securities of countries that have Sovereign obligations that have been under particular stress due to economic uncertainty, potential restructuring and ratings downgrades, including the Stressed European Countries (Greece, Spain, Italy, Hungary, Portugal and Ireland, collectively).

For the years ended December 31, 2015, 2014 and 2013, we did not sell or transfer any fixed-maturity investments classified as held to maturity. For the years ended December 31, 2015, 2014 and 2013, we did not transfer any securities from the available for sale or trading categories.

Net investment income consisted of:



	Year Ended December 31,
(In thousands)	2015			2014			2013
Investment income:
Fixed-maturities	$	81,127		$	62,352		$	66,131
Equity securities	4,539			6,287			6,592
Short-term investments	745			246			255
Other	600			1,848			1,970
Gross investment income	87,011			70,733			74,948
Investment expenses	(5,474		)	(5,078		)	(6,827		)
Net investment income	$	81,537		$	65,655		$	68,121

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



	Year Ended December 31,
(In thousands)	2015			2014			2013
Net realized gains (losses) on investments:
Fixed-maturities held to maturity	$	—		$	(9	)	$	2
Fixed-maturities available for sale	(1,176		)	(1,599		)	937
Equities available for sale	69,150			—			349
Trading securities	(9,231		)	(6,996		)	7,997
Short-term investments	(24		)	1			1
Other invested assets	3,267			—			8,841
Other gains	110			246			126
Net realized gains (losses) on investments	62,096			(8,357		)	18,253
Unrealized (losses) gains on trading securities	(27,015		)	92,226			(117,198		)
Total gains (losses) on investments	35,081			83,869			(98,945		)
Net gains (losses) on other financial instruments	612			(3,880		)	(7,580		)
Net gains (losses) on investments and other financial instruments	$	35,693		$	79,989		$	(106,525	)

The sources of our proceeds and related investment gains (losses) on our available for sale securities are as follows:



	Year Ended December 31,
(In thousands)	2015			2014			2013
Fixed-maturities available for sale:
Proceeds received from redemptions	$	103,595		$	4,985		$	538
Proceeds received from sales	20,100			19,672			17,185
Gross investment gains from sales and redemptions	64			99			1,078
Gross investment losses from sales and redemptions	(1,240		)	(1,698		)	(141		)
Equities available for sale:
Proceeds received from sales and redemptions	146,049			—			10,503
Gross investment gains from sales and redemptions	69,150			—			349

The change in unrealized gains (losses) recorded in accumulated other comprehensive income (loss) consisted of the following:



	Year Ended December 31,
(In thousands)	2015			2014			2013
Fixed-maturities:
Unrealized holding (losses) gains arising during the period, net of tax	$	(24,246	)	$	4,531		$	(240	)
Less reclassification adjustment for net (losses) gains included in net income (loss), net of tax	(764		)	(1,039		)	929
Net unrealized (losses) gains on investments, net of tax	$	(23,482	)	$	5,570		$	(1,169	)

Equities:
Unrealized holding gains arising during the period, net of tax	$	1,673		$	9,119		$	19,389
Less reclassification adjustment for net gains (losses) included in net income (loss), net of tax	44,947			—			(273		)
Net unrealized (losses) gains on investments, net of tax	$	(43,274	)	$	9,119		$	19,662

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



	December 31, 2015
($ in thousands) Description of Securities	Less Than 12 Months					12 Months or Greater					Total
($ in thousands) Description of Securities	# 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	$	5,752	$	21		$	—	$	—	1	$	5,752	$	21
State and municipal obligations	2	11,674		120		—	—		—		2	11,674		120
Corporate bonds and notes	117	510,807		16,773		6	8,700		518		123	519,507		17,291
RMBS	12	168,415		2,464		—	—		—		12	168,415		2,464
CMBS	58	387,268		8,939		—	—		—		58	387,268		8,939
Other ABS	96	284,998		2,559		14	43,225		1,415		110	328,223		3,974
Foreign government and agency securities	18	18,733		1,095		3	2,278		288		21	21,011		1,383
Equity securities	1	74,930		108		—	—		—		1	74,930		108
Total	305	$	1,462,577	$	32,079	23	$	54,203	$	2,221	328	$	1,516,780	$	34,300



	December 31, 2014
($ in thousands) Description of Securities	Less Than 12 Months					12 Months or Greater					Total
($ in thousands) Description of Securities	# 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	$	3,455	$	6	1	$	3,455	$	6
Corporate bonds and notes	24	40,917		410		1	1,027		148		25	41,944		558
Other ABS	34	97,356		1,727		—	—		—		34	97,356		1,727
Foreign government and agency securities	4	6,353		242		—	—		—		4	6,353		242
Total	62	$	144,626	$	2,379	2	$	4,482	$	154	64	$	149,108	$	2,533

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. There were no credit-related impairment losses recognized in earnings in 2015, 2014 or 2013.

We had securities in an unrealized loss position that we did not consider to be other-than-temporarily impaired as of December 31, 2015. For all investment categories, the unrealized losses of 12 months or greater duration as of December 31, 2015, were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect 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 December 31, 2015, 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 December 31, 2015.

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



	December 31, 2015
	Available for Sale
(In thousands)	Amortized Cost		Fair Value
Due in one year or less (1)	$	—	$	—
Due after one year through five years (1)	173,191		172,705
Due after five years through ten years (1)	437,248		430,476
Due after ten years (1)	280,941		274,971
RMBS (2)	226,744		224,905
CMBS (2)	415,780		406,910
Other ABS (2)	359,452		355,494
Total	$	1,893,356	$	1,865,461

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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.

As of December 31, 2015, we did not have any investment in any person and its affiliates that exceeded 10% of our total stockholders’ equity.

Securities on deposit with various state insurance commissioners amounted to $10.4 million and $12.1 million at December 31, 2015 and 2014, respectively.

At December 31, 2015 and 2014, Radian Guaranty had $74.7 million and $209.3 million, respectively, in a collateral account pursuant to the Freddie Mac Agreement. This collateral account, which contains investments primarily invested in trading securities, is pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac Agreement. Subject to certain conditions in the Freddie Mac Agreement, amounts in the collateral account may be released to Radian Guaranty over time to the extent that Loss Mitigation Activity becomes final in accordance with the terms of that agreement. See Note 10 for additional information.