Note 10 - Investments in Marketable Securities

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

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

Note 10 – 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. Any credit related decline in fair market values of our available for sale debt securities are recorded in our results of operations through an allowance for credit losses. 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 11 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, 2020				December 31, 2019
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investments available for sale:
Marketable equity securities	$	30,176	$	111,873	$	30,176	$	152,453
Restricted investments available for sale:
Corporate debt securities		63,446		67,478		63,414		65,653
Asset-based securities		46,851		47,682		54,451		55,185
U.S. Treasury securities		13,208		13,937		13,379		13,410
State and municipal securities		12,546		12,943		12,922		13,158
	$	166,227	$	253,913	$	174,342	$	299,859

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

	September 30, 2020						December 31, 2019
	Shares		Cost		Fair Value		Shares		Cost		Fair Value
NHI Common Stock		1,630,642	$	24,734	$	98,279		1,630,642	$	24,734	$	132,865

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, 2020				December 31, 2019
	Cost		Fair Value		Cost		Fair Value
Maturities:
Within 1 year	$	22,860	$	22,795	$	15,726	$	15,767
1 to 5 years		82,046		85,640		88,314		90,408
6 to 10 years		31,145		33,605		40,126		41,231
	$	136,051	$	142,040	$	144,166	$	147,406

Gross unrealized gains related to marketable equity securities are $81,804,000 and $122,290,000 as of September 30, 2020 and December 31, 2019, respectively. Gross unrealized losses related to marketable equity securities are $107,000 and $13,000 as of September 30, 2020 and December 31, 2019, respectively. For the three months and nine months ended September 30, 2020, the Company recognized net unrealized losses of $241,000 and $40,580,000, respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations. 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 statements of operations.

Gross unrealized gains related to available for sale marketable debt securities are $6,727,000 and $3,407,000 as of September 30, 2020 and December 31, 2019, respectively. Gross unrealized losses related to available for sale marketable debt securities are $738,000 and $167,000 as of September 30, 2020 and December 31, 2019, respectively. The Company’s unrealized losses in our available for sale marketable debt securities were determined to be non-credit related.

The Company has not recognized any credit related impairments for the nine months ending September 30, 2020 and 2019.

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.

Proceeds from the sale of available for sale marketable debt securities during the nine months ended September 30, 2020 and 2019 were $28,004,000 and $41,272,000, respectively. Investment gains of $135,000 and $117,000 were realized on these sales during the nine months ended September 30, 2020 and 2019, respectively. No sales were reported for marketable equity securities for the nine months ended September 30, 2020 and 2019, respectively.