The cost or amortized cost and fair value of investments in securities are shown below (in thousands):



	December 31, 2018
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	245,360	$	5,840	$	(301	)	$	250,899
Foreign governments	3,961		469		—			4,430
Corporate debt securities	7,640,891		58,772		(150,834		)	7,548,829
Residential mortgage-backed securities	315,306		7,237		(2,633		)	319,910
Collateralized debt securities	5,214		71		—			5,285
Other debt securities	717		14		—			731
Total bonds held-to-maturity	8,211,449		72,403		(153,768		)	8,130,084
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government	28,304		338		(243		)	28,399
U.S. states and political subdivisions	848,228		16,827		(3,025		)	862,030
Foreign governments	5,000		1,210		—			6,210
Corporate debt securities	5,345,579		41,812		(103,573		)	5,283,818
Residential mortgage-backed securities	31,735		424		(497		)	31,662
Collateralized debt securities	2,775		675		(6		)	3,444
Total bonds available-for-sale	6,261,621		61,286		(107,344		)	6,215,563
Total investments in securities	$	14,473,070	$	133,689	$	(261,112	)	$	14,345,647



	December 31, 2017
	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)			Fair Value
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	266,966	$	12,466	$	(37	)	$	279,395
Foreign governments	4,011		582		—			4,593
Corporate debt securities	7,032,464		217,883		(18,020		)	7,232,327
Residential mortgage-backed securities	246,803		9,702		(1,262		)	255,243
Collateralized debt securities	923		31		—			954
Other debt securities	1,792		49		—			1,841
Total bonds held-to-maturity	7,552,959		240,713		(19,319		)	7,774,353
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government	27,569		475		(146		)	27,898
U.S. states and political subdivisions	866,250		31,621		(824		)	897,047
Foreign governments	5,000		1,460		—			6,460
Corporate debt securities	5,038,908		170,112		(16,093		)	5,192,927
Residential mortgage-backed securities	15,009		37		(329		)	14,717
Collateralized debt securities	3,171		651		(4		)	3,818
Other debt securities	1,994		447		—			2,441
Total bonds available-for-sale	5,957,901		204,803		(17,396		)	6,145,308
Equity securities*
Common stock	738,453		1,029,340		(7,166		)	1,760,627
Preferred stock	19,130		4,469		—			23,599
Total equity securities	757,583		1,033,809		(7,166		)	1,784,226
Total investments in securities	$	14,268,443	$	1,479,325	$	(43,881	)	$	15,703,887

*Effective January 1, 2018, the Company adopted ASU No. 2016-01. As a result, equity securities are no longer classified as available-for-sale with unrealized gains and losses recognized in other comprehensive income; rather, all changes in the fair value of equity securities are now recognized in earnings. Since changes in fair value are recognized in earnings each reporting period, OTTI is no longer recognized on equity securities in a loss position. Prior periods have not been restated to conform to the current presentation. See note 3, Recently Issued Accounting Pronouncements.

The amortized cost and fair value, by contractual maturity, of fixed maturity securities are shown below (in thousands):



	December 31, 2018
	Bonds Held-to-Maturity				Bonds Available-for-Sale
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	383,192	$	386,893	$	76,516	$	77,149
Due after one year through five years	4,214,944		4,228,048		2,841,372		2,852,085
Due after five years through ten years	2,968,600		2,888,783		2,846,375		2,791,623
Due after ten years	644,713		626,360		497,358		494,706
Total	$	8,211,449	$	8,130,084	$	6,261,621	$	6,215,563

Actual maturities differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Residential and commercial mortgage-backed securities, which are not due at a single maturity, have been allocated to their respective categories based on the year of final contractual maturity.

Proceeds from sales of available-for-sale securities, with the related gross realized gains and losses, are shown below (in thousands):



	Years ended December 31,
	2018			2017			2016
Proceeds from sales of fixed maturity available-for-sale securities	$	85,590		$	161,223		$	138,665
Gross realized gains	376			63,075			34,135
Gross realized losses	(2,298		)	(6,406		)	(7,775		)

Gains and losses are determined using specific identification of the securities sold. During 2018 and 2017, bonds with a carrying value of $34,690,000 and $25,266,000, respectively were transferred from held-to-maturity to available-for-sale after a deterioration in the issuers’ credit worthiness. Further, during 2018, a bond with a carrying value of $38,381,000 was transferred from held-to-maturity to available-for-sale due to an isolated event that could not have been reasonably anticipated by the Company. No realized loss was recorded in 2018 and a realized loss of $6,000,000 was recorded in 2017 on a bond that was transferred due to an other-than-temporary impairment.

In accordance with various regulations, American National has bonds on deposit with regulating authorities with a carrying value of $48,068,000 and $47,556,000 at December 31, 2018 and 2017, respectively. In addition, American National has pledged bonds in connection with agreements and transactions, such as financing and reinsurance agreements. The carrying value of bonds pledged was $168,118,000 and $63,386,000 at December 31, 2018 and 2017, respectively

The components of the change in net unrealized gains (losses) on debt securities are shown below (in thousands):



	Years ended December 31,
	2018			2017			2016
Bonds available-for-sale	$	(233,465	)	$	53,115		$	78,207
Adjustments for
Deferred policy acquisition costs	51,920			(2,083		)	(29,074		)
Participating policyholders’ interest	11,157			(7,086		)	(10,282		)
Deferred federal income tax benefit (expense)	34,127			(15,516		)	(13,456		)
Change in net unrealized gains (losses) on debt securities, net of tax	$	(136,261	)	$	28,430		$	25,395

The components of the change in net losses on equity securities are shown below (in thousands):



	Year ended December 31, 2018
Unrealized losses on equity securities	$	(108,693	)
Less: Net gain on equity securities sold	1,505
Net losses on equity securities	$	(107,188	)

The gross unrealized losses and fair value of the investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, are shown below (in thousands):



	December 31, 2018
	Less than 12 months					12 Months or more					Total
	Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	(301	)	$	22,605	$	—		$	—	$	(301	)	$	22,605
Corporate debt securities	(90,931		)	2,969,461		(59,903		)	1,063,679		(150,834		)	4,033,140
Residential mortgage-backed securities	(703		)	58,119		(1,930		)	57,661		(2,633		)	115,780
Total bonds held-to-maturity	(91,935		)	3,050,185		(61,833		)	1,121,340		(153,768		)	4,171,525
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government	(29		)	9,741		(214		)	13,478		(243		)	23,219
U.S. states and political subdivisions	(1,274		)	119,987		(1,751		)	61,992		(3,025		)	181,979
Corporate debt securities	(65,492		)	2,383,548		(38,081		)	572,600		(103,573		)	2,956,148
Residential mortgage-backed securities	(54		)	6,034		(443		)	13,515		(497		)	19,549
Collateralized debt securities	(2		)	158		(4		)	100		(6		)	258
Total bonds available-for-sale	(66,851		)	2,519,468		(40,493		)	661,685		(107,344		)	3,181,153
Total	$	(158,786	)	$	5,569,653	$	(102,326	)	$	1,783,025	$	(261,112	)	$	7,352,678



	December 31, 2017
	Less than 12 months					12 Months or more					Total
	Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value
Fixed maturity securities, bonds held-to-maturity
U.S. states and political subdivisions	$	(37	)	$	1,937	$	—		$	—	$	(37	)	$	1,937
Corporate debt securities	(8,444		)	951,425		(9,576		)	192,737		(18,020		)	1,144,162
Residential mortgage-backed securities	(325		)	49,283		(937		)	18,888		(1,262		)	68,171
Total bonds held-to-maturity	(8,806		)	1,002,645		(10,513		)	211,625		(19,319		)	1,214,270
Fixed maturity securities, bonds available-for-sale
U.S. treasury and government	(141		)	20,352		(5		)	3,875		(146		)	24,227
U.S. states and political subdivisions	(160		)	27,669		(664		)	28,010		(824		)	55,679
Corporate debt securities	(6,657		)	559,710		(9,436		)	159,532		(16,093		)	719,242
Residential mortgage-backed securities	(193		)	12,419		(136		)	1,428		(329		)	13,847
Collateralized debt securities	—			—		(4		)	123		(4		)	123
Total bonds available-for-sale	(7,151		)	620,150		(10,245		)	192,968		(17,396		)	813,118
Equity securities*
Common stock	(7,166		)	60,391		—			—		(7,166		)	60,391
Total equity securities	(7,166		)	60,391		—			—		(7,166		)	60,391
Total	$	(23,123	)	$	1,683,186	$	(20,758	)	$	404,593	$	(43,881	)	$	2,087,779

As of December 31, 2018, the securities with unrealized losses including those exceeding one year were not deemed to be other-than-temporarily impaired. American National has the ability and intent to hold those securities until a market price recovery or maturity. It is not more-likely-than-not that American National will be required to sell them prior to recovery, and recovery is expected in a reasonable period of time. It is possible an issuer’s financial circumstances may be different in the future, which may lead to a different impairment conclusion in future periods.

The following table identifies the total bonds distributed by credit quality rating (in thousands, except percentages):



	December 31, 2018						December 31, 2017
	Amortized Cost		Estimated Fair Value		% of Fair Value		Amortized Cost		Estimated Fair Value		% of Fair Value
AAA	$	690,009	$	702,531	4.9	%	$	638,039	$	664,396	4.8	%
AA	1,326,947		1,336,380		9.3		1,220,544		1,264,282		9.0
A	5,350,316		5,314,589		37.0		4,856,802		4,997,574		35.9
BBB	6,584,478		6,507,212		45.4		6,273,220		6,480,719		46.6
BB and below	521,320		484,935		3.4		522,255		512,690		3.7
Total	$	14,473,070	$	14,345,647	100.0	%	$	13,510,860	$	13,919,661	100.0	%

Equity securities by market sector distribution are shown below:



	December 31,
	2018		2017
Consumer goods	21.1	%	20.2	%
Energy and utilities	8.2		8.6
Finance	18.1		21.9
Healthcare	13.5		11.8
Industrials	9.0		9.5
Information technology	22.6		20.0
Other	7.5		8.0
Total	100.0	%	100.0	%