Marketable Securities

6 Months Ended

Jun. 28, 2014

Marketable Securities [Abstract]

Marketable Securities

(3)  Marketable Securities

The Company’s marketable securities are all classified as available-for-sale.  FASB has established three levels of inputs that may be used to measure fair value:

Level 1  Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level 2  Observable inputs, other than Level 1 inputs in active markets, that are observable either directly

or indirectly; and

Level 3  Unobservable inputs for which there is little or no market data, which require the reporting entity

to develop its own assumptions.

The Company’s marketable securities valued using Level 1 inputs include highly liquid equity securities, for which quoted market prices are available.  The Company’s bond portfolio is valued using Level 2 inputs.  The Company’s bonds are valued using a combination of pricing for similar securities, recently executed transactions, cash flow models with yield curves and other pricing models utilizing observable inputs, which are considered Level 2 inputs.

For Level 2 investment valuation, the Company utilizes standard pricing procedures of its investment brokerage firm(s) which include various third party pricing services.  These procedures also require specific price monitoring practices as well as pricing review reports, valuation oversight and pricing challenge procedures to maintain the most accurate representation of investment fair market value.  In addition, the Company engaged an independent firm to value a sample of the Company’s municipal bond holdings in order to validate the investment’s assigned fair value.

The Company accrues interest on its bond portfolio throughout the life of each bond held.  Dividends from the equity securities are recognized as received.  Both interest and dividends are recognized in “Investment Income” on the Company’s Consolidated Statements of Income.

Marketable securities, as of June 28, 2014 and December 28, 2013, consisted of:

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
June 28, 2014	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities	$	1,198	$	6,934	$	-	$	8,132
Level 2
Municipal bonds		55,282		1,803		(104)		56,981
	$	56,480	$	8,737	$	(104)	$	65,113

			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
December 28, 2013	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities	$	970	$	7,239	$	-	$	8,209
Level 2
Municipal bonds		55,431		686		(1,233)		54,884
	$	56,401	$	7,925	$	(1,233)	$	63,093

Maturities of marketable securities classified as available-for-sale at June 28, 2014, were as follows:

		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	3,935	$	3,965
Due after one year through five years		39,405		40,822
Due after five years through ten years		11,942		12,194
Equity securities		1,198		8,132
	$	56,480	$	65,113