Note 9 - Investments in Marketable Securities

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

Note 9 – Investments in Marketable Securities

Our investments in marketable equity securities are carried at fair value with the changes in unrealized gains and losses recognized in our results of operations at each measurement date. Our investments in marketable debt securities are classified as available for sale securities and carried at fair value with the unrealized gains and losses recognized through accumulated other comprehensive income at each measurement date. Realized gains and losses from securities sales are recognized in results of operations upon disposition of the securities using the specific identification method on a trade date basis. Refer to Note 10 for a description of the Company's methodology for determining the fair value of marketable securities.

Marketable securities and restricted marketable securities consist of the following (in thousands):

	September 30, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investments available for sale:
Marketable equity securities	$	30,176	$	156,319	$	30,176	$	140,223
Restricted investments available for sale:
Corporate debt securities		62,584		64,683		69,439		67,632
Asset-based securities		57,451		58,454		62,772		62,068
U.S. Treasury securities		13,088		13,211		22,038		21,457
State and municipal securities		12,976		13,209		21,818		21,436
	$	176,275	$	305,876	$	206,243	$	312,816

Included in the marketable equity securities are the following (in thousands, except share amounts):

	September 30, 2019						December 31, 2018
	Shares		Cost		Fair Value		Shares		Cost		Fair Value
NHI Common Stock		1,630,642	$	24,734	$	134,349		1,630,642	$	24,734	$	123,179

The amortized cost and estimated fair value of debt securities classified as available for sale, by contractual maturity, are as follows (in thousands):

	September 30, 2019				December 31, 2018
	Cost		Fair Value		Cost		Fair Value
Maturities:
Within 1 year	$	11,139	$	11,153	$	11,448	$	11,401
1 to 5 years		90,140		92,120		98,487		97,430
6 to 10 years		44,820		46,284		64,932		62,527
Over 10 years		-		-		1,200		1,235
	$	146,099	$	149,557	$	176,067	$	172,593

Gross unrealized gains related to marketable equity securities are $126,149,000 and $110,081,000 as of September 30, 2019 and December 31, 2018, respectively. Gross unrealized losses related to marketable equity securities are $6,000 and $34,000 as of September 30, 2019 and December 31, 2018, respectively. For the three months and nine months ended September 30, 2019, the Company recognized net unrealized gains of $9,312,000 and $16,096,000, respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statement of operations. For the three and nine months ended September 30, 2018, the Company recognized net unrealized gains of $3,486,000 and $417,000, respectively, for the change in market value of the marketable equity securities in the interim condensed consolidated statements of operations.

Gross unrealized gains related to available for sale debt securities are $3,568,000 and $335,000 as of September 30, 2019 and December 31, 2018, respectively. Gross unrealized losses related to available for sale debt securities are $110,000 and $3,809,000 as of September 30, 2019 and December 31, 2018, respectively.

For the marketable securities in gross unrealized loss positions, (a) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (b) the Company expects that the contractual principal and interest will be received on the investment securities. As a result, the Company recognized no other-than-temporary impairment during the nine months ended September 30, 2019 or for the year ended December 31, 2018.

Proceeds from the sale of available for sale debt securities during the nine months ended September 30, 2019 and 2018 were $41,272,000 and $4,539,000, respectively. Investment gains of $117,000 and $18,000 were realized on these sales during the nine months ended September 30, 2019 and 2018, respectively. No sales were reported for marketable equity securities for the nine months ended September 30, 2019 and 2018, respectively.