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Investment in Securities
 6 Months Ended
Jun. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Investment in Securities
The cost or amortized cost and fair value of investments in securities are shown below (in thousands):
 
June 30, 2019
 
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
$
207,563

 
$
7,146

 
$
(52
)
 
$
214,657

Foreign governments
3,934

 
492

 
—

 
4,426

Corporate debt securities
7,849,211

 
267,162

 
(10,580
)
 
8,105,793

Residential mortgage-backed securities
205,408

 
8,109

 
(737
)
 
212,780

Collateralized debt securities
127,892

 
2,944

 
(43
)
 
130,793

Other debt securities
149

 
1

 
—

 
150

         Total bonds held-to-maturity
8,394,157

 
285,854

 
(11,412
)
 
8,668,599

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
U.S. treasury and government
28,300

 
489

 
(44
)
 
28,745

U.S. states and political subdivisions
1,063,172

 
42,859

 
—

 
1,106,031

Foreign governments
5,000

 
1,361

 
—

 
6,361

Corporate debt securities
5,479,173

 
203,949

 
(16,576
)
 
5,666,546

Residential mortgage-backed securities
24,006

 
848

 
(169
)
 
24,685

Collateralized debt securities
9,706

 
843

 
—

 
10,549

         Total bonds available-for-sale
6,609,357

 
250,349

 
(16,789
)
 
6,842,917

Total investments in securities
$
15,003,514

 
$
536,203

 
$
(28,201
)
 
$
15,511,516


 
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





The amortized cost and fair value, by contractual maturity, of fixed maturity securities are shown below (in thousands):
 
June 30, 2019
 
Bonds Held-to-Maturity
 
Bonds Available-for-Sale
 
Amortized Cost
 
Fair Value
 
Amortized Cost
 
Fair Value
Due in one year or less
$
430,988

 
$
436,069

 
$
243,111

 
$
245,596

Due after one year through five years
4,033,584

 
4,153,917

 
3,211,961

 
3,313,108

Due after five years through ten years
3,099,228

 
3,223,700

 
2,513,056

 
2,623,952

Due after ten years
830,357

 
854,913

 
641,229

 
660,261

  Total
$
8,394,157

 
$
8,668,599

 
$
6,609,357

 
$
6,842,917


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):
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Proceeds from sales of fixed maturity available-for-sale securities
$
—

 
$
42,932

 
$
285

 
$
90,113

Gross realized gains
—

 
11,123

 
—

 
12,547

Gross realized losses
—

 
(32
)
 
(23
)
 
(587
)

Gains and losses are determined using specific identification of the securities sold. During the six months ended June 30, 2019 and 2018, bonds below investment grade with a carrying value of $157,939,000 and $34,850,000, respectively, were transferred from held-to-maturity to available-for-sale after a deterioration in the issuers’ credit worthiness. No realized loss was recorded in 2019 or 2018.
The components of the change in net unrealized gains (losses) on debt securities are shown below (in thousands):
 
Six months ended June 30,
 
2019
 
2018
Bonds available-for-sale: change in unrealized gains (losses)
$
279,618

 
$
(210,413
)
Adjustments for
 
 
 
Deferred policy acquisition costs
(34,853
)
 
41,962

Participating policyholders’ interest
(12,811
)
 
11,924

Deferred federal income tax benefit (expense)
(48,080
)
 
28,806

Change in net unrealized gains (losses) on debt securities, net of tax
$
183,874

 
$
(127,721
)
The components of the change in net gains on equity securities are shown below (in thousands):
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Unrealized gains on equity securities
$
51,933

 
$
46,087

 
$
254,955

 
$
11,862

Net gains on equity securities sold
15,127

 
11,075

 
18,482

 
12,130

Net gains on equity securities
$
67,060

 
$
57,162

 
$
273,437

 
$
23,992



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):
 
June 30, 2019
 
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
$
—

 
$
—

 
$
(52
)
 
$
2,613

 
$
(52
)
 
$
2,613

Corporate debt securities
(1,661
)
 
137,818

 
(8,919
)
 
436,089

 
(10,580
)
 
573,907

Residential mortgage-backed securities
(19
)
 
7,368

 
(718
)
 
36,651

 
(737
)
 
44,019

Collateralized debt securities
(39
)
 
10,771

 
(4
)
 
917

 
(43
)
 
11,688

         Total bonds held-to-maturity
(1,719
)
 
155,957

 
(9,693
)
 
476,270

 
(11,412
)
 
632,227

Fixed maturity securities, bonds available-for-sale
 
 
 
 
 
 
 
 
 
 
 
U.S. treasury and government
—

 
—

 
(44
)
 
11,124

 
(44
)
 
11,124

U.S. states and political subdivisions
—

 
1,808

 
—

 
—

 
—

 
1,808

Corporate debt securities
(1,338
)
 
91,488

 
(15,238
)
 
371,471

 
(16,576
)
 
462,959

Residential mortgage-backed securities
—

 
—

 
(169
)
 
1,820

 
(169
)
 
1,820

         Total bonds available-for-sale
(1,338
)
 
93,296

 
(15,451
)
 
384,415

 
(16,789
)
 
477,711

Total
$
(3,057
)
 
$
249,253

 
$
(25,144
)
 
$
860,685

 
$
(28,201
)
 
$
1,109,938


 
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


As of June 30, 2019, 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):
 
June 30, 2019
 
December 31, 2018
 
Amortized
Cost
 
Estimated
Fair Value
 
% of Fair
Value
 
Amortized
Cost
 
Estimated
Fair Value
 
% of Fair
Value
AAA
$
771,497

 
$
798,910

 
5.2
%
 
$
690,009

 
$
702,531

 
4.9
%
AA
1,302,861

 
1,348,881

 
8.7

 
1,326,947

 
1,336,380

 
9.3

A
5,597,573

 
5,803,852

 
37.4

 
5,350,316

 
5,314,589

 
37.0

BBB
6,873,228

 
7,109,627

 
45.8

 
6,584,478

 
6,507,212

 
45.4

BB and below
458,355

 
450,246

 
2.9

 
521,320

 
484,935

 
3.4

Total
$
15,003,514

 
$
15,511,516

 
100.0
%
 
$
14,473,070

 
$
14,345,647

 
100.0
%

Equity securities by market sector distribution are shown below:
 
June 30, 2019
 
December 31, 2018
Consumer goods
20.9
%
 
21.1
%
Energy and utilities
9.1

 
8.2

Finance
18.1

 
18.1

Healthcare
13.4

 
13.5

Industrials
8.0

 
9.0

Information technology
22.7

 
22.6

Other
7.8

 
7.5

        Total
100.0
%
 
100.0
%