The Company’s marketable securities are all classified as available-for-sale within “Current Assets” in the Company’s Consolidated Balance Sheets. 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 municipal bond portfolio is valued using Level 2 inputs. The Company’s municipal 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 advisory firm which includes 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.

The Company accrues interest on its bond portfolio throughout the life of each bond held. Dividends from the equity securities are recognized as received. Interest, dividends and unrealized gains and losses on equity securities are recognized in “Investment income and interest expense” on the Company’s Consolidated Statements of Income. The Company recognized investment income of $3.1 million in the second quarter of 2020, which included an unrealized loss in equity securities of $91 thousand. In the thirteen weeks ending June 29, 2019, the Company recognized investment income of $1.1 million, which included unrealized gains in equity securities of $223 thousand. In the twenty-six weeks ending June 27, 2020, the Company recognized investment losses of $934 thousand, which included unrealized losses in equity securities of $2 million. In the twenty-six weeks ending June 29, 2019, the Company recognized investment income of $4 million, which included unrealized gains in equity securities of $848 thousand.



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
June 27, 2020	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	7,188
Level 2
Municipal bonds	$	86,445	$	4,535	$	(912)		90,068
	$	86,445	$	4,535	$	(912)	$	97,256



			Gross		Gross
(dollars in thousands)	Amortized		Unrealized		Unrealized		Fair
December 28, 2019	Cost		Holding Gains		Holding Losses		Value
Available-for-sale:
Level 1
Equity securities							$	9,201
Level 2
Municipal bonds	$	52,264	$	2,091	$	(18)		54,337
	$	52,264	$	2,091	$	(18)	$	63,538

Maturities of marketable securities classified as available-for-sale at June 27, 2020, were as follows:
‎


		Amortized		Fair
(dollars in thousands)		Cost		Value
Available-for-sale:
Due within one year	$	8,072	$	8,108
Due after one year through five years		33,173		34,491
Due after five years through ten years		45,200		47,469
	$	86,445	$	90,068

The Company also maintains a non-qualified supplemental executive retirement plan for certain of its associates which allows them to defer income to future periods. Participants in the plans earn a return on their deferrals based on mutual fund investments. The Company chooses to invest in the underlying mutual fund investments to offset the liability associated with the non-qualified deferred compensation plans. Such investments are reported on the Company’s Consolidated Balance Sheets as “SERP investment,” are classified as trading securities and are measured at fair value using Level 1 inputs with gains and losses included in “Investment income and interest expense” on the Company’s Consolidated Statements of Income. The changes in the underlying liability to the associates are recorded in “Other income (expense).”