Investments

12 Months Ended

Dec. 31, 2025

Fixed Income Securities

Our fixed income securities classified as available-for-sale at December 31, 2025 and 2024 are shown in tables 5.1a and 5.1b below.


Details of Fixed Income Securities by Category as of December 31, 2025
Table	5.1a
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	279,359	$	958	$	(2,505)	$	277,812
Obligations of U.S. states and political subdivisions		1,961,841		10,958		(134,035)		1,838,764
Corporate debt securities		2,712,348		36,781		(57,857)		2,691,272
ABS		225,478		2,418		(1,335)		226,561
RMBS		366,671		8,169		(16,816)		358,024
CMBS		237,974		2,484		(1,675)		238,783
CLOs		99,182		129		(24)		99,287
Foreign government debt		4,487		—		(420)		4,067
Commercial paper		56,661		—		—		56,661
Total fixed income securities		$	5,944,001	$	61,897	$	(214,667)	$	5,791,231


Details of Fixed Income Securities by Category as of December 31, 2024
Table	5.1b
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized (Losses)		Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	265,349	$	231	$	(5,087)	$	260,493
Obligations of U.S. states and political subdivisions		2,065,953		2,331		(192,789)		1,875,495
Corporate debt securities		2,857,627		12,593		(112,839)		2,757,381
ABS		155,594		2,157		(1,234)		156,517
RMBS		373,485		2,103		(25,528)		350,060
CMBS		243,840		21		(7,990)		235,871
CLOs		199,773		286		—		200,059
Foreign government debt		4,487		—		(689)		3,798
Commercial paper		12,015		—		—		12,015
Total fixed income securities		$	6,178,123	$	19,722	$	(346,156)	$	5,851,689

We had $12.6 million and $12.2 million of investments at fair value on deposit with various states as of December 31, 2025 and 2024, respectively, due to regulatory requirements of those state insurance departments.

In connection with our insurance and reinsurance activities within MAC and MIC, we are required to maintain assets in trusts for the benefit of contractual counterparties, which had investments at fair value of $185.7 million and $199.9 million at December 31, 2025 and 2024, respectively.

The amortized cost and fair values of fixed income securities at December 31, 2025, by contractual maturity, are shown in table 5.2 below. Actual 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 mortgage and asset-backed securities are not due at a single maturity date, they are listed in separate categories.


Fixed Income Securities Maturity Schedule
Table	5.2
		December 31, 2025
(In thousands)		Amortized Cost		Fair Value
Due in one year or less		$	759,885	$	759,602
Due after one year through five years		1,651,146		1,632,640
Due after five years through ten years		1,683,909		1,635,359
Due after ten years		919,756		840,975
		5,014,696		4,868,576

ABS		225,478		226,561
RMBS		366,671		358,024
CMBS		237,974		238,783
CLOs		99,182		99,287
Total as of December 31, 2025		$	5,944,001	$	5,791,231

Equity Securities

The cost and fair value of investments in equity securities as of December 31, 2025 and December 31, 2024 are shown in tables 5.3a and 5.3b below.


Details of Equity Security Investments as of December 31, 2025
Table	5.3a
(In thousands)		Cost		Fair Value Gains		Fair Value Losses		Fair Value
Equity securities		$	16,286	$	42	$	(1,006)	$	15,322


Details of Equity Security Investments as of December 31, 2024
Table	5.3b
(In thousands)		Cost		Fair Value Gains		Fair Value Losses		Fair Value
Equity securities		$	16,146	$	8	$	(1,392)	$	14,762

Net Gains (Losses) on Investments and Other Financial Instruments

The net gains (losses) on investments and other financial instruments and the proceeds from the sale of fixed income securities classified as available-for-sale securities are shown in table 5.4 below.


Details of Net Gains (Losses) on Investments and Other Financial Instruments
Table	5.4
(in thousands)		December 31, 2025		December 31, 2024		December 31, 2023

Fixed income securities:
Gains on sales		$	2,971	$	1,114	$	3,071
Losses on sales		(3,049)		(8,045)		(17,620)


Equity securities gains (losses):

Changes in fair value		421		(130)		530
Change in embedded derivative on Home Re Transactions (1)		(11)		(2,791)		(118)
Other:
Gains (losses) on sales		2		16		(1)
Market adjustment		—		(10)		(3)
Net gains (losses) on investments and other financial instruments		$	334	$	(9,846)	$	(14,141)

Proceeds from sales of fixed income securities		110,961		45,807		375,788

(1) See Note 6 "Fair Value Measurements" for discussion of the embedded derivative on the Home Re Transactions.

Other Invested Assets

Our other invested assets balance includes an investment in FHLB stock that is carried at cost, which due to its nature approximates fair value. Ownership of FHLB stock provides access to a secured lending facility, subject to certain conditions, which includes requirements to post collateral and to maintain a minimum investment in FHLB stock.

Unrealized Investment Losses

Tables 5.5a and 5.5b below summarize, for all available-for-sale investments in an unrealized loss position as of December 31, 2025 and December 31, 2024, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in tables 5.5a and 5.5b below are estimated using the process described in Note 6 - "Fair Value Measurements" and in Note 2 - “Significant Accounting Policies” to these consolidated financial statements.


Unrealized Loss Aging for Securities by Type and Length of Time as of December 31, 2025
Table	5.5a
		Less Than 12 Months				12 Months or Greater				Total
(In thousands)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	15,762	$	(60)	$	51,113	$	(2,445)	$	66,875	$	(2,505)
Obligations of U.S. states and political subdivisions		144,148		(6,123)		1,087,931		(127,912)		1,232,079		(134,035)
Corporate debt securities		258,349		(1,180)		887,659		(56,677)		1,146,008		(57,857)
ABS		49,774		(1,103)		22,965		(232)		72,739		(1,335)
RMBS		2,906		(8)		187,553		(16,808)		190,459		(16,816)
CMBS		15,363		(30)		82,994		(1,645)		98,357		(1,675)
CLOs		35,272		(24)		—		—		35,272		(24)
Foreign government debt		—		—		4,068		(420)		4,068		(420)

Total		$	521,574	$	(8,528)	$	2,324,283	$	(206,139)	$	2,845,857	$	(214,667)


Unrealized Loss Aging for Securities by Type and Length of Time as of December 31, 2024
Table	5.5b
		Less Than 12 Months				12 Months or Greater				Total
(In thousands)		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies		$	37,017	$	(437)	$	69,959	$	(4,650)	$	106,976	$	(5,087)
Obligations of U.S. states and political subdivisions		409,406		(5,621)		1,195,869		(187,168)		1,605,275		(192,789)
Corporate debt securities		852,752		(10,334)		1,051,862		(102,505)		1,904,614		(112,839)
ABS		20,090		(184)		49,640		(1,050)		69,730		(1,234)
RMBS		171,654		(5,498)		151,893		(20,030)		323,547		(25,528)
CMBS		77,567		(1,774)		151,188		(6,216)		228,755		(7,990)

Foreign government debt		—		—		3,798		(689)		3,798		(689)

Total		$	1,568,486	$	(23,848)	$	2,674,209	$	(322,308)	$	4,242,695	$	(346,156)

The change in net unrealized gains (losses) of investments is shown in table 5.6 below.


Change in Net Unrealized Gains (Losses)
Table	5.6
(In thousands)		2025		2024		2023
Fixed income securities		$	173,661	$	11,481	$	179,174

There were 712 and 1,020 securities in an unrealized loss position as of December 31, 2025 and 2024, respectively. Based on current facts and circumstances, we believe the unrealized losses as of December 31, 2025 presented in table 5.5a above are not indicative of the ultimate collectability of the par value of the securities. The unrealized losses in all categories of our investments were primarily caused by increases in prevailing interest rates. We also rely upon estimates of several credit and non-credit factors in our review and evaluation of individual investments to determine whether a credit impairment exists. All of the securities in an unrealized loss position are current with respect to their interest obligations.

The source of net investment income is shown in table 5.7 below.


Net Investment Income
Table	5.7
(In thousands)		2025		2024		2023
Fixed income securities		$	237,601	$	230,524	$	202,655
Equity securities		680		624		529
Cash equivalents		12,531		18,498		16,111
Other		18		31		44
Investment income		250,830		249,677		219,339
Investment expenses		(4,572)		(5,037)		(4,599)
Net investment income		$	246,258	$	244,640	$	214,740

MGIC INVESTMENT CORP 10-K