Investments

12 Months Ended

Mar. 31, 2013

Investments, Debt and Equity Securities [Abstract]

Note 6. Investments

Note 6.  Investments

Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

We deposit bonds with insurance regulatory authorities to meet statutory requirements. The adjusted cost of bonds on deposit with insurance regulatory authorities was $16.4 million and $16.1 million at March 31, 2013 and 2012, respectively.

Available-for-Sale Investments

Available-for-sale investments at March 31, 2013 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	24,518	$	2,749	$	(3	)$	(3	)$	27,261
U.S. government agency mortgage-backed securities		44,934		4,027		(7	)	(73	)	48,881
Obligations of states and political subdivisions		154,692		16,056		(2	)	(292	)	170,454
Corporate securities		729,677		51,596		(373	)	(2,265	)	778,635
Mortgage-backed securities		6,730		282		(27	)	-		6,985
Redeemable preferred stocks		23,705		751		(214	)	(30	)	24,212
Common stocks		43,729		273		(4,685	)	(407	)	38,910
	$	1,027,985	$	75,734	$	(5,311	)$	(3,070	)$	1,095,338

Available-for-sale investments at March 31, 2012 were as follows:

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses More than 12 Months		Gross Unrealized Losses Less than 12 Months		Estimated Market Value
		(In thousands)
U.S. treasury securities and government obligations	$	29,152	$	2,964	$	(18	)$	(9	)$	32,089
U.S. government agency mortgage-backed securities		48,938		4,866		(1	)	(7	)	53,796
Obligations of states and political subdivisions		142,824		9,435		-		(147	)	152,112
Corporate securities		445,433		33,350		(619	)	(2,236	)	475,928
Mortgage-backed securities		11,572		282		(38	)	(5	)	11,811
Redeemable preferred stocks		24,370		1,066		(1,627	)	(632	)	23,177
Common stocks		27,736		37		(9,720	)	(174	)	17,879
	$	730,025	$	52,000	$	(12,023	)$	(3,210	)$	766,792

The tables above include gross unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.

We sold available-for-sale securities with a fair value of $165.1 million, $141.1 million and $134.7 million in fiscal 2013, 2012 and 2011, respectively. The gross realized gains on these sales totaled $9.5 million, $5.9 million and $2.0 million in fiscal 2013, 2012 and 2011, respectively. We realized gross losses on these sales of $0.7 million, $0.2 million and $0.2 million in fiscal 2013, 2012 and 2011, respectively.  

The unrealized losses of more than twelve months in the tables above are considered temporary declines. The majority of this unrealized loss is related to our long term investments in 1.8 million shares of Bank of America common stock. We track each investment with an unrealized loss and evaluate them on an individual basis for other-than-temporary impairments including obtaining corroborating opinions from third party sources, performing trend analysis and reviewing management's future plans. Certain of these investments may have declines determined by management to be other-than-temporary and we recognized these write-downs through earnings. We recognized other-than-temporary impairments of $0.1 million and $0.8 million in fiscal 2012 and 2011, respectively. There were no write downs in fiscal 2013.

The investment portfolio primarily consists of corporate securities and U.S. government securities. We believe we monitor our investments as appropriate. Our methodology of assessing other-than-temporary impairments is based on security-specific analysis as of the balance sheet date and considers various factors including the length of time to maturity, the extent to which the fair value has been less than the cost, the financial condition and the near-term prospects of the issuer, and whether the debtor is current on its contractually obligated interest and principal payments. Nothing has come to management's attention that would lead to the belief that each issuer would not have the ability to meet the remaining contractual obligations of the security, including payment at maturity. We have the ability and intent not to sell its fixed maturity and common stock investments for a period of time sufficient to allow us to recover our costs.

The portion of other-than-temporary impairment related to a credit loss is recognized in earnings. The significant inputs utilized in the evaluation of mortgage backed securities credit losses include ratings, delinquency rates, and prepayment activity. The significant inputs utilized in the evaluation of asset backed securities credit losses include the time frame for principal recovery and the subordination and value of the underlying collateral.

Credit losses recognized in earnings for which a portion of an other-than-temporary impairment was recognized in other comprehensive income were as follows:

		Credit Loss
		(In thousands)
Balance at March 31, 2012	$	552
Additions:
Other-than-temporary impairment not previously recognized		-
Balance at March 31, 2013	$	552

The adjusted cost and estimated market value of available-for-sale investments at March 31, 2013 and 2012, respectively, by contractual maturity, were as follows:

		March 31, 2013				March 31, 2012
		Amortized Cost		Estimated Market Value		Amortized Cost		Estimated Market Value
		(In thousands)
Due in one year or less	$	43,658	$	44,333	$	40,219	$	40,688
Due after one year through five years		180,448		191,930		157,444		165,852
Due after five years through ten years		281,546		302,188		176,694		188,225
Due after ten years		448,169		486,780		291,990		319,160
		953,821		1,025,231		666,347		713,925
Mortgage backed securities		6,730		6,985		11,572		11,811
Redeemable preferred stocks		23,705		24,212		24,370		23,177
Equity securities		43,729		38,910		27,736		17,879
	$	1,027,985	$	1,095,338	$	730,025	$	766,792

Investments, other

The carrying value of other investments was as follows:

		March 31,
		2013		2012
		(In thousands)
Mortgage loans, net	$	156,934	$	166,249
Short-term investments		43,574		50,239
Real estate		20,406		20,032
Policy loans		16,460		15,677
Other equity investments		4,391		6,354
	$	241,765	$	258,551

Mortgage loans are carried at the unpaid balance, less an allowance for probable losses and any unamortized premium or discount. The allowance for probable losses was $0.4 million as of March 31, 2013 and 2012. The estimated fair value of these loans as of March 31, 2013 and 2012 approximated the carrying value. These loans represent first lien mortgages held by us.

Short-term investments consist primarily of investments in money market funds, mutual funds and any other investments with short-term characteristics that have original maturities of less than one year at acquisition. These investments are recorded at cost, which approximates fair value.

Real estate obtained through foreclosure and held for sale is carried at the lower of fair value at time of foreclosure or current estimated fair value less cost to sell. Other equity investments are carried at cost and assessed for impairment.

Insurance policy loans are carried at their unpaid balance.