| Investments |
Investments
Investments available for sale consist of the following:
| | | | | | | | | | | | | | | | | | December 31, 2019 (In thousands) | | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value | U.S. Treasury securities | | $ | 239,087 |
| | $ | 3,526 |
| | $ | (407 | ) | | $ | 242,206 |
| U.S. agency securities | | 33,620 |
| | 36 |
| | (51 | ) | | 33,605 |
| U.S. agency mortgage-backed securities | | 836,710 |
| | 13,956 |
| | (2,332 | ) | | 848,334 |
| Municipal debt securities (1) | | 339,511 |
| | 22,245 |
| | (118 | ) | | 361,638 |
| Non-U.S. government securities | | 52,230 |
| | 2,812 |
| | (47 | ) | | 54,995 |
| Corporate debt securities (2) | | 856,638 |
| | 24,255 |
| | (592 | ) | | 880,301 |
| Residential and commercial mortgage securities | | 282,840 |
| | 6,542 |
| | (1,101 | ) | | 288,281 |
| Asset-backed securities | | 326,589 |
| | 857 |
| | (1,421 | ) | | 326,025 |
| Money market funds | | 315,360 |
| | 2 |
| | — |
| | 315,362 |
| Total investments available for sale | | $ | 3,282,585 |
| | $ | 74,231 |
| | $ | (6,069 | ) | | $ | 3,350,747 |
|
| | | | | | | | | | | | | | | | | | December 31, 2018 (In thousands) | | Amortized Cost | | Unrealized Gains | | Unrealized Losses | | Fair Value | U.S. Treasury securities | | $ | 295,145 |
| | $ | 693 |
| | $ | (5,946 | ) | | $ | 289,892 |
| U.S. agency securities | | 33,645 |
| | — |
| | (648 | ) | | 32,997 |
| U.S. agency mortgage-backed securities | | 649,228 |
| | 2,520 |
| | (14,570 | ) | | 637,178 |
| Municipal debt securities (1) | | 481,547 |
| | 5,351 |
| | (3,019 | ) | | 483,879 |
| Non-U.S. government securities | | 44,999 |
| | 285 |
| | (283 | ) | | 45,001 |
| Corporate debt securities (2) | | 738,964 |
| | 1,005 |
| | (14,768 | ) | | 725,201 |
| Residential and commercial mortgage securities | | 122,369 |
| | 686 |
| | (1,217 | ) | | 121,838 |
| Asset-backed securities | | 288,371 |
| | 305 |
| | (3,679 | ) | | 284,997 |
| Money market funds | | 139,082 |
| | 1 |
| | — |
| | 139,083 |
| Total investments available for sale | | $ | 2,793,350 |
| | $ | 10,846 |
| | $ | (44,130 | ) | | $ | 2,760,066 |
|
_______________________________________________________________________________ | | | | | | | | | | December 31, | | December 31, | (1) The following table summarizes municipal debt securities as of : | | 2019 | | 2018 | Special revenue bonds | | 74.5 | % | | 69.0 | % | General obligation bonds | | 21.3 |
| | 26.0 |
| Certificate of participation bonds | | 3.4 |
| | 3.6 |
| Tax allocation bonds | | 0.8 |
| | 0.9 |
| Special tax bonds | | — |
| | 0.5 |
| Total | | 100.0 | % | | 100.0 | % |
| | | | | | | | | | December 31, | | December 31, | (2) The following table summarizes corporate debt securities as of : | | 2019 | | 2018 | Financial | | 34.4 | % | | 37.1 | % | Consumer, non-cyclical | | 20.1 |
| | 20.7 |
| Communications | | 10.3 |
| | 12.6 |
| Energy | | 8.3 |
| | 5.7 |
| Consumer, cyclical | | 7.6 |
| | 7.6 |
| Utilities | | 6.2 |
| | 5.0 |
| Technology | | 4.8 |
| | 3.1 |
| Industrial | | 4.2 |
| | 4.7 |
| Basic materials | | 4.1 |
| | 3.5 |
| Total | | 100.0 | % | | 100.0 | % |
The amortized cost and fair value of investments available for sale at December 31, 2019, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories.
| | | | | | | | | | (In thousands) | | Amortized Cost | | Fair Value | U.S. Treasury securities: | | |
| | |
| Due in 1 year | | $ | 57,609 |
| | $ | 57,617 |
| Due after 1 but within 5 years | | 102,510 |
| | 104,452 |
| Due after 5 but within 10 years | | 77,984 |
| | 79,163 |
| Due after 10 years | | 984 |
| | 974 |
| Subtotal | | 239,087 |
| | 242,206 |
| U.S. agency securities: | | |
| | |
| Due in 1 year | | 19,182 |
| | 19,162 |
| Due after 1 but within 5 years | | 14,438 |
| | 14,443 |
| Subtotal | | 33,620 |
| | 33,605 |
| Municipal debt securities: | | |
| | |
| Due in 1 year | | — |
| | — |
| Due after 1 but within 5 years | | 19,753 |
| | 20,523 |
| Due after 5 but within 10 years | | 182,026 |
| | 192,774 |
| Due after 10 years | | 137,732 |
| | 148,341 |
| Subtotal | | 339,511 |
| | 361,638 |
| Non-U.S. government securities: | | | | | Due in 1 year | | — |
| | — |
| Due after 1 but within 5 years | | 17,517 |
| | 18,181 |
| Due after 5 but within 10 years | | 29,572 |
| | 31,597 |
| Due after 10 years | | 5,141 |
| | 5,217 |
| Subtotal | | 52,230 |
| | 54,995 |
| Corporate debt securities: | | |
| | |
| Due in 1 year | | 148,964 |
| | 149,353 |
| Due after 1 but within 5 years | | 401,697 |
| | 411,097 |
| Due after 5 but within 10 years | | 276,182 |
| | 289,867 |
| Due after 10 years | | 29,795 |
| | 29,984 |
| Subtotal | | 856,638 |
| | 880,301 |
| U.S. agency mortgage-backed securities | | 836,710 |
| | 848,334 |
| Residential and commercial mortgage securities | | 282,840 |
| | 288,281 |
| Asset-backed securities | | 326,589 |
| | 326,025 |
| Money market funds | | 315,360 |
| | 315,362 |
| Total investments available for sale | | $ | 3,282,585 |
| | $ | 3,350,747 |
|
Gross gains and losses realized on the sale of investments available for sale were as follows:
| | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2019 | | 2018 | | 2017 | Realized gross gains | | $ | 5,238 |
| | $ | 2,201 |
| | $ | 2,504 |
| Realized gross losses | | 1,746 |
| | 883 |
| | 425 |
|
The fair value of investments available for sale in an unrealized loss position and the related unrealized losses were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or more | | Total | December 31, 2019 (In thousands) | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | U.S. Treasury securities | | $ | 29,013 |
| | $ | (331 | ) | | $ | 42,981 |
| | $ | (76 | ) | | $ | 71,994 |
| | $ | (407 | ) | U.S. agency securities | | — |
| | — |
| | 25,605 |
| | (51 | ) | | 25,605 |
| | (51 | ) | U.S. agency mortgage-backed securities | | 101,684 |
| | (1,042 | ) | | 113,866 |
| | (1,290 | ) | | 215,550 |
| | (2,332 | ) | Municipal debt securities | | 10,651 |
| | (112 | ) | | 624 |
| | (6 | ) | | 11,275 |
| | (118 | ) | Non-U.S. government securities | | 9,664 |
| | (47 | ) | | — |
| | — |
| | 9,664 |
| | (47 | ) | Corporate debt securities | | 83,013 |
| | (576 | ) | | 14,531 |
| | (16 | ) | | 97,544 |
| | (592 | ) | Residential and commercial mortgage securities | | 59,341 |
| | (1,059 | ) | | 3,442 |
| | (42 | ) | | 62,783 |
| | (1,101 | ) | Asset-backed securities | | 78,813 |
| | (202 | ) | | 109,536 |
| | (1,219 | ) | | 188,349 |
| | (1,421 | ) | Total | | $ | 372,179 |
| | $ | (3,369 | ) | | $ | 310,585 |
| | $ | (2,700 | ) | | $ | 682,764 |
| | $ | (6,069 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Less than 12 months | | 12 months or more | | Total | December 31, 2018 (In thousands) | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | | Fair
Value | | Gross
Unrealized
Losses | U.S. Treasury securities | | $ | 45,505 |
| | $ | (215 | ) | | $ | 165,015 |
| | $ | (5,731 | ) | | $ | 210,520 |
| | $ | (5,946 | ) | U.S. agency securities | | — |
| | — |
| | 32,997 |
| | (648 | ) | | 32,997 |
| | (648 | ) | U.S. agency mortgage-backed securities | | 106,177 |
| | (1,070 | ) | | 341,579 |
| | (13,500 | ) | | 447,756 |
| | (14,570 | ) | Municipal debt securities | | 114,442 |
| | (1,176 | ) | | 104,930 |
| | (1,843 | ) | | 219,372 |
| | (3,019 | ) | Non-U.S. government securities | | 13,497 |
| | (283 | ) | | — |
| | — |
| | 13,497 |
| | (283 | ) | Corporate debt securities | | 381,912 |
| | (7,538 | ) | | 231,124 |
| | (7,230 | ) | | 613,036 |
| | (14,768 | ) | Residential and commercial mortgage securities | | 51,477 |
| | (650 | ) | | 13,321 |
| | (567 | ) | | 64,798 |
| | (1,217 | ) | Asset-backed securities | | 217,546 |
| | (3,165 | ) | | 29,852 |
| | (514 | ) | | 247,398 |
| | (3,679 | ) | Total | | $ | 930,556 |
| | $ | (14,097 | ) | | $ | 918,818 |
| | $ | (30,033 | ) | | $ | 1,849,374 |
| | $ | (44,130 | ) |
At December 31, 2019, we held 365 individual investment securities that were in an unrealized loss position. The gross unrealized losses on these investment securities are principally associated with the changes in market interest rates and credit spreads subsequent to their purchase. Each issuer is current on its scheduled interest and principal payments. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether an impairment is other-than-temporary. We recorded other-than-temporary impairments of $0.3 million and $0.1 million in the years ended December 31, 2019 and 2017, respectively, on securities in an unrealized loss position. The impairments resulted from our intent to sell these securities subsequent to the reporting dates. There were no other-than-temporary impairments in the year ended December 31, 2018.
The Company's other invested assets at December 31, 2019 and December 31, 2018 totaled $78.9 million and $31.0 million, respectively. Other invested assets are comprised of limited partnership interests which are accounted for under the equity method of accounting with changes in value reported in other income. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag.
The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $9.4 million at December 31, 2019 and $8.9 million at December 31, 2018. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $805.5 million at December 31, 2019 and $759.9 million at December 31, 2018. Essent Guaranty is required to maintain assets on deposit in connection with its fully collateralized reinsurance agreements (see Note 5). The fair value of the assets on deposit was $6.4 million at December 31, 2019 and $3.4 million at December 31, 2018. Essent Guaranty is also required to maintain assets on deposit for the benefit of the sponsor of a fixed income investment commitment. The fair value of the assets on deposit was $6.4 million at December 31, 2019 and $6.3 million at December 31, 2018.
Net investment income consists of:
| | | | | | | | | | | | | | | | Year Ended December 31, | (In thousands) | | 2019 | | 2018 | | 2017 | Fixed maturities | | $ | 82,194 |
| | $ | 63,053 |
| | $ | 41,935 |
| Short-term investments | | 5,049 |
| | 3,873 |
| | 1,019 |
| Gross investment income | | 87,243 |
| | 66,926 |
| | 42,954 |
| Investment expenses | | (3,701 | ) | | (2,835 | ) | | (2,728 | ) | Net investment income | | $ | 83,542 |
| | $ | 64,091 |
| | $ | 40,226 |
|
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