Investments

Available for Sale Securities

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



	June 30, 2017
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	58,706	$	58,343	$	201	$	564
State and municipal obligations	111,858		115,454		3,936		340
Corporate bonds and notes	1,713,237		1,735,846		30,429		7,820
RMBS	184,603		182,716		921		2,808
CMBS	432,124		435,101		4,075		1,098
Other ABS	596,416		597,864		2,023		575
Foreign government and agency securities	31,457		32,019		589		27
Other investments	1,500		1,500		—		—
Total fixed-maturities available for sale	3,129,901		3,158,843		42,174		13,232
Equity securities available for sale (1)	176,930		176,808		316		438
Total debt and equity securities	$	3,306,831	$	3,335,651	$	42,490	$	13,670

______________________


(1)	Primarily consists of investments in fixed income and equity exchange-traded funds and publicly-traded business development company equities.



	December 31, 2016
(In thousands)	Amortized Cost		Fair Value		Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	78,931	$	75,474	$	2	$	3,459
State and municipal obligations	66,124		67,171		1,868		821
Corporate bonds and notes	1,463,720		1,455,628		14,320		22,412
RMBS	358,262		350,628		197		7,831
CMBS	429,057		428,289		2,255		3,023
Other ABS	433,603		434,728		2,037		912
Foreign government and agency securities	24,771		24,594		148		325
Other investments	2,000		2,000		—		—
Total fixed-maturities available for sale	2,856,468		2,838,512		20,827		38,783
Equity securities available for sale (1)	1,330		1,330		—		—
Total debt and equity securities	$	2,857,798	$	2,839,842	$	20,827	$	38,783

______________________


(1)	Primarily consists of investments in Federal Home Loan Bank stock as required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the FHLB.

Gross Unrealized Losses and Fair Value of Available for Sale Securities

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:



	June 30, 2017
($ 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	7	$	36,682	$	564	—	$	—	$	—	7	$	36,682	$	564
State and municipal obligations	10	47,282		340		—	—		—		10	47,282		340
Corporate bonds and notes	132	530,077		7,718		1	3,736		102		133	533,813		7,820
RMBS	32	128,589		2,733		3	6,529		75		35	135,118		2,808
CMBS	31	113,103		1,095		1	1,038		3		32	114,141		1,098
Other ABS	83	205,378		575		—	—		—		83	205,378		575
Foreign government and agency securities	5	5,419		27		—	—		—		5	5,419		27
Equity Securities	11	73,441		438		—	—		—		11	73,441		438
Total	311	$	1,139,971	$	13,490	5	$	11,303	$	180	316	$	1,151,274	$	13,670



	December 31, 2016
($ 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	7	$	73,160	$	3,459	—	$	—	$	—	7	$	73,160	$	3,459
State and municipal obligations	7	30,901		821		—	—		—		7	30,901		821
Corporate bonds and notes	185	788,876		22,135		2	4,582		277		187	793,458		22,412
RMBS	56	311,031		7,822		1	1,398		9		57	312,429		7,831
CMBS	37	218,170		2,909		2	6,585		114		39	224,755		3,023
Other ABS	58	131,268		470		16	45,886		442		74	177,154		912
Foreign government and agency securities	12	13,034		325		—	—		—		12	13,034		325
Total	362	$	1,566,440	$	37,941	21	$	58,451	$	842	383	$	1,624,891	$	38,783

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.

During the three months ended June 30, 2017, we recorded other-than-temporary impairment losses in earnings of $1.0 million, including $0.5 million related to a convertible note of a non-public company issuer included in debt securities and $0.5 million related to a privately-placed equity security. We concluded that we would not recover the amortized cost basis of these securities due to credit deterioration. There were no credit-related impairment losses recognized in earnings or in AOCI during the year ended December 31, 2016.

Although we held securities in an unrealized loss position as of June 30, 2017, we did not consider those securities to be other-than-temporarily impaired as of such date. For all investment categories, the unrealized losses of 12 months or greater duration as of June 30, 2017 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 June 30, 2017, 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 June 30, 2017.

Trading Securities

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



(In thousands)	June 30, 2017		December 31, 2016
Trading securities:
U.S. government and agency securities	$	28,336	$	33,042
State and municipal obligations	216,838		259,573
Corporate bonds and notes	360,906		453,617
RMBS	34,114		38,214
CMBS	64,267		78,984
Other ABS	—		8,219
Foreign government and agency securities	4,327		8,213
Total	$	708,788	$	879,862

For trading securities held at June 30, 2017 and December 31, 2016, we had net unrealized gains associated with those securities of $8.0 million and $16.8 million during the six months ended June 30, 2017 and the year ended December 31, 2016, respectively.

For the six months ended June 30, 2017, we did not transfer any securities from the available for sale or trading categories.

Net Gains (Losses) on Investments and Other Financial Instruments

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



	Three Months Ended June 30,					Six Months Ended June 30,
(In thousands)	2017			2016		2017			2016
Net realized gains (losses):
Fixed-maturities available for sale	$	(1,180	)	$	1,166	$	(3,689	)	$	(1,982	)
Equity securities available for sale	385			—		385			(170		)
Trading securities	(349		)	421		(6,043		)	(1,819		)
Short-term investments	(38		)	—		(32		)	(39		)
Other gains (losses)	—			—		18			18
Net realized gains (losses) on investments	(1,182		)	1,587		(9,361		)	(3,992		)
Other-than-temporary impairment losses	(1,000		)	—		(1,000		)	—
Unrealized gains (losses) on trading securities	6,938			27,678		12,164			62,909
Total net gains (losses) on investments	4,756			29,265		1,803			58,917
Net gains (losses) on other financial instruments	575			1,262		677			2,896
Net gains (losses) on investments and other financial instruments	$	5,331		$	30,527	$	2,480		$	61,813

Contractual Maturities

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



	June 30, 2017
	Available for Sale
(In thousands)	Amortized Cost		Fair Value
Due in one year or less (1)	$	59,342	$	59,351
Due after one year through five years (1)	656,233		661,676
Due after five years through 10 years (1)	874,709		880,162
Due after 10 years (1)	326,474		341,973
RMBS (2)	184,603		182,716
CMBS (2)	432,124		435,101
Other ABS (2)	596,416		597,864
Total	$	3,129,901	$	3,158,843

______________________


(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.

Other

At June 30, 2017 and December 31, 2016, Radian Guaranty had $64.3 million and $63.9 million, respectively, in a collateral account pursuant to the Freddie Mac Agreement. This collateral account, which contains investments primarily invested in and classified as part of our trading securities, is pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac Agreement. See Note 10 for additional information.