| Debt Securities |
Note 3 – Debt Securities Investments in debt securities, classified as available-for-sale, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized |
|
|
Gross unrealized |
|
|
Estimated |
|
(in millions) |
|
cost |
|
|
Gains |
|
|
Losses |
|
|
fair value |
|
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bonds |
|
$ |
257.0 |
|
|
$ |
— |
|
|
$ |
(9.5 |
) |
|
$ |
247.5 |
|
Municipal bonds |
|
|
1,146.3 |
|
|
|
0.6 |
|
|
|
(117.7 |
) |
|
$ |
1,029.2 |
|
Foreign government bonds |
|
|
241.8 |
|
|
|
0.3 |
|
|
|
(5.8 |
) |
|
$ |
236.3 |
|
Governmental agency bonds |
|
|
474.3 |
|
|
|
— |
|
|
|
(30.3 |
) |
|
$ |
444.0 |
|
Governmental agency mortgage-backed securities |
|
|
6,623.2 |
|
|
|
0.6 |
|
|
|
(529.6 |
) |
|
$ |
6,094.2 |
|
U.S. corporate debt securities |
|
|
1,299.1 |
|
|
|
0.8 |
|
|
|
(65.6 |
) |
|
$ |
1,234.3 |
|
Foreign corporate debt securities |
|
|
493.5 |
|
|
|
1.2 |
|
|
|
(17.6 |
) |
|
$ |
477.1 |
|
|
|
$ |
10,535.2 |
|
|
$ |
3.5 |
|
|
$ |
(776.1 |
) |
|
$ |
9,762.6 |
|
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bonds |
|
$ |
244.2 |
|
|
$ |
1.0 |
|
|
$ |
(1.6 |
) |
|
$ |
243.6 |
|
Municipal bonds |
|
|
1,003.5 |
|
|
|
9.9 |
|
|
|
(53.3 |
) |
|
|
960.1 |
|
Foreign government bonds |
|
|
239.4 |
|
|
|
1.1 |
|
|
|
(5.3 |
) |
|
|
235.2 |
|
Governmental agency bonds |
|
|
268.3 |
|
|
|
0.3 |
|
|
|
(7.6 |
) |
|
|
261.0 |
|
Governmental agency mortgage-backed securities |
|
|
5,401.9 |
|
|
|
41.9 |
|
|
|
(183.0 |
) |
|
|
5,260.8 |
|
U.S. corporate debt securities |
|
|
1,032.8 |
|
|
|
15.7 |
|
|
|
(13.7 |
) |
|
|
1,034.8 |
|
Foreign corporate debt securities |
|
|
466.6 |
|
|
|
9.5 |
|
|
|
(4.9 |
) |
|
|
471.2 |
|
|
|
$ |
8,656.7 |
|
|
$ |
79.4 |
|
|
$ |
(269.4 |
) |
|
$ |
8,466.7 |
|
Sales of debt securities resulted in realized gains of $0.7 million and $3.6 million, realized losses of $2.1 million and $7.8 million and proceeds of $239.1 million and $782.8 million for the three and nine months ended September 30, 2026, respectively. Sales of debt securities resulted in realized gains of $1.7 million and $4.2 million, realized losses of $3.7 million and $13.0 million and proceeds of $240.4 million and $747.4 million for the three and nine months ended September 30, 2025, respectively. Investments in debt securities in an unrealized loss position, and their respective length of time in such position, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less than 12 months |
|
|
12 months or longer |
|
|
Total |
|
(in millions) |
|
Estimated
fair value |
|
|
Unrealized
losses |
|
|
Estimated
fair value |
|
|
Unrealized
losses |
|
|
Estimated
fair value |
|
|
Unrealized
losses |
|
September 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bonds |
|
$ |
230.1 |
|
|
$ |
(8.5 |
) |
|
$ |
17.2 |
|
|
$ |
(1.0 |
) |
|
$ |
247.3 |
|
|
$ |
(9.5 |
) |
Municipal bonds |
|
|
619.2 |
|
|
|
(36.6 |
) |
|
|
385.9 |
|
|
|
(81.1 |
) |
|
|
1,005.1 |
|
|
|
(117.7 |
) |
Foreign government bonds |
|
|
148.2 |
|
|
|
(1.9 |
) |
|
|
34.9 |
|
|
|
(3.9 |
) |
|
|
183.1 |
|
|
|
(5.8 |
) |
Governmental agency bonds |
|
|
419.2 |
|
|
|
(23.8 |
) |
|
|
24.8 |
|
|
|
(6.5 |
) |
|
|
444.0 |
|
|
|
(30.3 |
) |
Governmental agency mortgage-backed
securities |
|
|
4,850.6 |
|
|
|
(294.9 |
) |
|
|
1,196.9 |
|
|
|
(234.7 |
) |
|
|
6,047.5 |
|
|
|
(529.6 |
) |
U.S. corporate debt securities |
|
|
1,021.8 |
|
|
|
(48.2 |
) |
|
|
72.1 |
|
|
|
(17.4 |
) |
|
|
1,093.9 |
|
|
|
(65.6 |
) |
Foreign corporate debt securities |
|
|
361.7 |
|
|
|
(11.6 |
) |
|
|
39.0 |
|
|
|
(6.0 |
) |
|
|
400.7 |
|
|
|
(17.6 |
) |
|
|
$ |
7,650.8 |
|
|
$ |
(425.5 |
) |
|
$ |
1,770.8 |
|
|
$ |
(350.6 |
) |
|
$ |
9,421.6 |
|
|
$ |
(776.1 |
) |
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury bonds |
|
$ |
61.7 |
|
|
$ |
(0.3 |
) |
|
$ |
36.3 |
|
|
$ |
(1.3 |
) |
|
$ |
98.0 |
|
|
$ |
(1.6 |
) |
Municipal bonds |
|
|
118.6 |
|
|
|
(1.1 |
) |
|
|
451.3 |
|
|
|
(52.2 |
) |
|
|
569.9 |
|
|
|
(53.3 |
) |
Foreign government bonds |
|
|
76.2 |
|
|
|
(0.3 |
) |
|
|
59.8 |
|
|
|
(5.0 |
) |
|
|
136.0 |
|
|
|
(5.3 |
) |
Governmental agency bonds |
|
|
210.6 |
|
|
|
(1.5 |
) |
|
|
28.9 |
|
|
|
(6.1 |
) |
|
|
239.5 |
|
|
|
(7.6 |
) |
Governmental agency mortgage-backed
securities |
|
|
988.8 |
|
|
|
(9.8 |
) |
|
|
1,479.1 |
|
|
|
(173.2 |
) |
|
|
2,467.9 |
|
|
|
(183.0 |
) |
U.S. corporate debt securities |
|
|
169.4 |
|
|
|
(0.8 |
) |
|
|
101.2 |
|
|
|
(12.9 |
) |
|
|
270.6 |
|
|
|
(13.7 |
) |
Foreign corporate debt securities |
|
|
32.3 |
|
|
|
(0.2 |
) |
|
|
69.0 |
|
|
|
(4.7 |
) |
|
|
101.3 |
|
|
|
(4.9 |
) |
|
|
$ |
1,657.6 |
|
|
$ |
(14.0 |
) |
|
$ |
2,225.6 |
|
|
$ |
(255.4 |
) |
|
$ |
3,883.2 |
|
|
$ |
(269.4 |
) |
Based on the Company’s review of its debt securities in an unrealized loss position, it determined that the losses were due to non-credit factors and, therefore, it does not consider these securities to be credit impaired at September 30, 2026. Investments in debt securities at September 30, 2026, by contractual maturities, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions) |
|
Due in one
year or less |
|
|
Due after
one through
five years |
|
|
Due after
five through
ten years |
|
|
Due after
ten years |
|
|
Total |
|
U.S. Treasury bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
$ |
39.8 |
|
|
$ |
162.2 |
|
|
$ |
50.9 |
|
|
$ |
4.1 |
|
|
$ |
257.0 |
|
Estimated fair value |
|
$ |
39.7 |
|
|
$ |
157.1 |
|
|
$ |
47.6 |
|
|
$ |
3.1 |
|
|
$ |
247.5 |
|
Municipal bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
7.2 |
|
|
|
149.4 |
|
|
|
574.0 |
|
|
|
415.7 |
|
|
|
1,146.3 |
|
Estimated fair value |
|
|
7.2 |
|
|
|
141.3 |
|
|
|
509.4 |
|
|
|
371.3 |
|
|
|
1,029.2 |
|
Foreign government bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
93.2 |
|
|
|
101.8 |
|
|
|
33.6 |
|
|
|
13.2 |
|
|
|
241.8 |
|
Estimated fair value |
|
|
93.4 |
|
|
|
98.0 |
|
|
|
33.1 |
|
|
|
11.8 |
|
|
|
236.3 |
|
Governmental agency bonds |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
— |
|
|
|
0.8 |
|
|
|
272.9 |
|
|
|
200.6 |
|
|
|
474.3 |
|
Estimated fair value |
|
|
— |
|
|
|
0.8 |
|
|
|
259.8 |
|
|
|
183.4 |
|
|
|
444.0 |
|
U.S. corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
3.1 |
|
|
|
590.7 |
|
|
|
533.2 |
|
|
|
172.1 |
|
|
|
1,299.1 |
|
Estimated fair value |
|
|
3.1 |
|
|
|
576.8 |
|
|
|
505.3 |
|
|
|
149.1 |
|
|
|
1,234.3 |
|
Foreign corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
17.3 |
|
|
|
274.6 |
|
|
|
152.6 |
|
|
|
49.0 |
|
|
|
493.5 |
|
Estimated fair value |
|
|
17.2 |
|
|
|
269.8 |
|
|
|
146.5 |
|
|
|
43.6 |
|
|
|
477.1 |
|
Total debt securities (excluding mortgage-backed
securities) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
$ |
160.6 |
|
|
$ |
1,279.5 |
|
|
$ |
1,617.2 |
|
|
$ |
854.7 |
|
|
$ |
3,912.0 |
|
Estimated fair value |
|
$ |
160.6 |
|
|
$ |
1,243.8 |
|
|
$ |
1,501.7 |
|
|
$ |
762.3 |
|
|
$ |
3,668.4 |
|
Total mortgage-backed securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,623.2 |
|
Estimated fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,094.2 |
|
Total debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,535.2 |
|
Estimated fair value |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
9,762.6 |
|
Mortgage-backed securities, which include contractual terms to maturity, are not categorized by contractual maturity as borrowers may have the right to call or prepay obligations with, or without, call or prepayment penalties. The composition of the debt securities portfolio at September 30, 2026, by credit rating, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A- or higher |
|
|
BBB+ to BBB- |
|
|
Non-Investment Grade |
|
|
Total |
|
(dollars in millions) |
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
U.S. Treasury bonds |
|
$ |
247.5 |
|
|
|
100.0 |
% |
|
$ |
— |
|
|
|
— |
% |
|
$ |
— |
|
|
|
— |
% |
|
$ |
247.5 |
|
Municipal bonds |
|
|
1,014.1 |
|
|
|
98.6 |
|
|
|
14.8 |
|
|
|
1.4 |
|
|
|
0.3 |
|
|
|
— |
|
|
|
1,029.2 |
|
Foreign government bonds |
|
|
228.1 |
|
|
|
96.5 |
|
|
|
7.5 |
|
|
|
3.2 |
|
|
|
0.7 |
|
|
|
0.3 |
|
|
|
236.3 |
|
Governmental agency bonds |
|
|
444.0 |
|
|
|
100.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
444.0 |
|
Governmental agency mortgage-
backed securities |
|
|
6,094.2 |
|
|
|
100.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,094.2 |
|
U.S. corporate debt securities |
|
|
786.8 |
|
|
|
63.7 |
|
|
|
302.4 |
|
|
|
24.5 |
|
|
|
145.1 |
|
|
|
11.8 |
|
|
|
1,234.3 |
|
Foreign corporate debt securities |
|
|
264.7 |
|
|
|
55.5 |
|
|
|
185.5 |
|
|
|
38.9 |
|
|
|
26.9 |
|
|
|
5.6 |
|
|
|
477.1 |
|
|
|
$ |
9,079.4 |
|
|
|
93.0 |
% |
|
$ |
510.2 |
|
|
|
5.2 |
% |
|
$ |
173.0 |
|
|
|
1.8 |
% |
|
$ |
9,762.6 |
|
Included in debt securities at September 30, 2026 were bank loans totaling $102.7 million, of which $97.0 million were non-investment grade; high yield corporate debt securities totaling $71.1 million, all of which were non-investment grade; and emerging market debt securities totaling $30.1 million, of which $4.6 million were non-investment grade. The composition of the debt securities portfolio in an unrealized loss position at September 30, 2026, by credit rating, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A- or higher |
|
|
BBB+ to BBB- |
|
|
Non-Investment Grade |
|
|
Total |
|
(dollars in millions) |
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
|
Percentage |
|
|
Estimated
fair value |
|
U.S. Treasury bonds |
|
$ |
247.3 |
|
|
|
100.0 |
% |
|
$ |
— |
|
|
|
— |
% |
|
$ |
— |
|
|
|
— |
% |
|
$ |
247.3 |
|
Municipal bonds |
|
|
991.5 |
|
|
|
98.7 |
|
|
|
13.3 |
|
|
|
1.3 |
|
|
|
0.3 |
|
|
|
— |
|
|
|
1,005.1 |
|
Foreign government bonds |
|
|
174.9 |
|
|
|
95.5 |
|
|
|
7.5 |
|
|
|
4.1 |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
|
183.1 |
|
Governmental agency bonds |
|
|
444.0 |
|
|
|
100.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
444.0 |
|
Governmental agency mortgage-
backed securities |
|
|
6,047.5 |
|
|
|
100.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6,047.5 |
|
U.S. corporate debt securities |
|
|
720.3 |
|
|
|
65.8 |
|
|
|
273.0 |
|
|
|
25.0 |
|
|
|
100.6 |
|
|
|
9.2 |
|
|
|
1,093.9 |
|
Foreign corporate debt securities |
|
|
227.3 |
|
|
|
56.7 |
|
|
|
155.6 |
|
|
|
38.9 |
|
|
|
17.8 |
|
|
|
4.4 |
|
|
|
400.7 |
|
|
|
$ |
8,852.8 |
|
|
|
93.9 |
% |
|
$ |
449.4 |
|
|
|
4.8 |
% |
|
$ |
119.4 |
|
|
|
1.3 |
% |
|
$ |
9,421.6 |
|
Debt securities in an unrealized loss position at September 30, 2026 included bank loans totaling $53.7 million, of which $51.9 million were non-investment grade; high yield corporate debt securities totaling $63.5 million, all of which were non-investment grade; and emerging market debt securities totaling $25.3 million, of which $3.7 million were non-investment grade. The credit ratings in the above tables reflect published ratings obtained from globally recognized securities rating agencies. If a security was rated differently among the rating agencies the lowest rating was selected. Governmental agency mortgage-backed securities are not rated by any of the rating agencies; however, these securities have been included in the above table in the “A- or higher” rating category because the payments of principal and interest are guaranteed by the governmental agency that issued the security.
|