Note 5 - Investments

3 Months Ended

Mar. 31, 2019

Investments [Abstract]

Investments

Investments

Available for Sale Securities

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

	March 31, 2019
(In thousands)	Amortized Cost		Fair Value			Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	94,441	$	94,098	(1)	$	185	$	528
State and municipal obligations	88,598		92,718			4,421		301
Corporate bonds and notes	2,159,040		2,175,975			31,450		14,515
RMBS	348,746		350,238		(2)	4,242		2,750
CMBS	512,190		515,604			4,873		1,459
Other ABS	679,444		675,477			1,021		4,988
Total securities available for sale	$	3,882,459	$	3,904,110	(3)	$	46,192	$	24,541

______________________

(1) Includes securities with a fair value of $10.9 million serving as collateral for FHLB advances.

(2) Includes securities with a fair value of $103.7 million serving as collateral for FHLB advances.

(3) Includes $6.5 million of fixed-maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below.

	December 31, 2018
(In thousands)	Amortized Cost		Fair Value			Gross Unrealized Gains		Gross Unrealized Losses
Fixed-maturities available for sale:
U.S. government and agency securities	$	85,532	$	84,070	(1)	$	46	$	1,508
State and municipal obligations	138,022		138,313			2,191		1,900
Corporate bonds and notes	2,288,720		2,229,885			5,053		63,888
RMBS	334,843		332,142		(2)	1,785		4,486
CMBS	546,729		539,915			544		7,358
Other ABS	712,748		704,662			814		8,900
Total securities available for sale	$	4,106,594	$	4,028,987	(3)	$	10,433	$	88,040

______________________

(1) Includes securities with a fair value of $10.7 million serving as collateral for FHLB advances.

(2) Includes securities with a fair value of $77.7 million serving as collateral for FHLB advances.

(3) Includes $7.4 million of fixed-maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below.

Gross Unrealized Losses and Fair Value of Available for Sale Securities

For securities deemed “available for sale” and that are in an unrealized loss position, the following tables show the gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of March 31, 2019 and December 31, 2018 are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below.

	March 31, 2019
($ 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	—	$	—	$	—	9	$	38,177	$	528	9	$	38,177	$	528
State and municipal obligations	1	6,487		27		3	10,983		274		4	17,470		301
Corporate bonds and notes	54	220,831		2,676		148	656,876		11,839		202	877,707		14,515
RMBS	9	60,465		124		24	67,863		2,626		33	128,328		2,750
CMBS	33	138,708		621		19	41,516		838		52	180,224		1,459
Other ABS	71	321,040		2,958		41	179,398		2,030		112	500,438		4,988
Total	168	$	747,531	$	6,406	244	$	994,813	$	18,135	412	$	1,742,344	$	24,541

	December 31, 2018
($ 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	$	27,415	$	796	8	$	23,476	$	712	10	$	50,891	$	1,508
State and municipal obligations	12	41,263		955		16	39,982		945		28	81,245		1,900
Corporate bonds and notes	330	1,208,430		36,284		126	601,533		27,604		456	1,809,963		63,888
RMBS	15	92,315		782		28	77,395		3,704		43	169,710		4,486
CMBS	62	328,696		3,973		33	125,728		3,385		95	454,424		7,358
Other ABS	129	503,109		7,917		26	89,628		983		155	592,737		8,900
Total	550	$	2,201,228	$	50,707	237	$	957,742	$	37,333	787	$	3,158,970	$	88,040

Although we held securities in an unrealized loss position as of March 31, 2019, 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 March 31, 2019 were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect to recover the amortized cost basis of these securities. As of March 31, 2019, 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 March 31, 2019.

Other-than-temporary Impairment Activity. To the extent we determine that a security is deemed to have had an other-than-temporary impairment, an impairment loss is recognized. We recognized no other-than-temporary impairment losses in earnings during the three months ended March 31, 2019 and $0.8 million of other-than-temporary impairment losses in earnings

for the three months ended March 31, 2018. There were no other-than-temporary impairment losses recognized in accumulated other comprehensive income (loss) for those periods.

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)	March 31, 2019		December 31, 2018
Trading securities:
State and municipal obligations	$	128,339	$	168,359
Corporate bonds and notes	203,014		228,151
RMBS	18,257		21,083
CMBS	34,382		51,478
Total	$	383,992	$	469,071

Securities Lending Agreements

We participate in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. See Notes 2 and 6 of Notes to Consolidated Financial Statements in our 2018 Form 10-K for additional information about our securities lending agreements.

Key balances related to our securities lending agreements consisted of the following as of the dates indicated:

(In thousands)	March 31, 2019		December 31, 2018
Loaned securities (1):
U.S. government and agency securities	$	—	$	9,987
Corporate bonds and notes	6,526		7,818
Equity securities	16,080		10,055
Total loaned securities, at fair value	$	22,606	$	27,860
Total loaned securities, at amortized cost	$	22,537	$	28,992
Securities collateral on deposit from Borrowers (2)	17,372		16,815
Reinvested cash collateral, at estimated fair value (3)	6,233		11,699

______________________

(1) Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting.

(2) Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements.

(3) All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets.

Net Gains (Losses) on Investments and Other Financial Instruments

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

	Three Months Ended March 31,
(In thousands)	2019			2018
Net realized gains (losses):
Fixed-maturities available for sale (1)	$	(495	)	$	(3,120	)
Equity securities	(680		)	142
Trading securities	(684		)	(538		)
Other invested assets	87			62
Other gains (losses)	85			12
Net realized gains (losses) on investments	(1,687		)	(3,442		)
Other-than-temporary impairment losses	—			(844		)
Net unrealized gains (losses) on investment securities	19,469			(12,804		)
Total net gains (losses) on investments	17,782			(17,090		)
Net gains (losses) on other financial instruments	4,131			(1,797		)
Net gains (losses) on investments and other financial instruments	$	21,913		$	(18,887	)

______________________

(1)Components of net realized gains (losses) on fixed-maturities available for sale include:

	Three Months Ended March 31,
(In thousands)	2019			2018
Gross investment gains from sales and redemptions	$	4,165		$	598
Gross investment losses from sales and redemptions	(4,660		)	(3,718		)

Net Unrealized Gains (Losses) on Investment Securities

For each period indicated, the net change in unrealized gains (losses) on investment securities shown below represents a component of net gains (losses) on investments and other financial instruments. The net changes in unrealized gains (losses) on trading securities and equity securities that were still held at each period end were as follows:

	Three Months Ended March 31,
(In thousands)	2019		2018
Net changes in unrealized gains (losses):
Trading securities	$	8,587	$	(11,420	)
Equity securities	7,919		(1,806		)
Net changes in unrealized gains (losses) on investment securities	$	16,506	$	(13,226	)

Contractual Maturities

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

	March 31, 2019
	Available for Sale
(In thousands)	Amortized Cost		Fair Value
Due in one year or less (1)	$	93,413	$	93,208
Due after one year through five years (1)	828,387		832,653
Due after five years through 10 years (1)	1,051,235		1,060,529
Due after 10 years (1)	369,044		376,401
RMBS (2)	348,746		350,238
CMBS (2)	512,190		515,604
Other ABS (2)	679,444		675,477
Total (3)	$	3,882,459	$	3,904,110

______________________

(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.

(3) Includes securities loaned under securities lending agreements with a fair value of $6.5 million.

Other

For the three months ended March 31, 2019, we did not transfer any securities from the available for sale or trading categories.

At March 31, 2019 and December 31, 2018, we had aggregate amounts of $114.6 million and $88.4 million, respectively, of U.S. government and agency securities and RMBS, classified as fixed-maturities available for sale within our investment securities portfolio, serving as collateral for our FHLB advances. See Note 12 for additional information.

Our investments include securities on deposit with various state insurance commissioners of $16.7 million and $17.6 million at March 31, 2019 and December 31, 2018, respectively.