Investment Securities and Certificates of Deposit

9 Months Ended

Sep. 30, 2019

Investments, Debt and Equity Securities [Abstract]

Investment Securities and Certificates of Deposit

The Company's Investment Securities and Certificates of Deposit as of September 30, 2019 and December 31, 2018 were as follows:



	September 30, 2019								December 31, 2018
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt Securities	$	114,361	$	93	$	—	$	114,454	$	1,622	$	10	$	—	$	1,632
Equity Securities	666		—		188		478		666		—		410		256
Debt Securities Carried by Broker-Dealers	228,184		1,500		3		229,681		147,009		954		—		147,963
Investment Funds	60,172		3,454		—		63,626		56,296		402		1,922		54,776
Total Investment Securities (carried at fair value)	$	403,383	$	5,047	$	191	$	408,239	$	205,593	$	1,366	$	2,332	$	204,627

Certificates of Deposit (carried at contract value)							211,861								100,000

Total Investment Securities and Certificates of Deposit							$	620,100							$	304,627

Scheduled maturities of the Company's available-for-sale debt securities as of September 30, 2019 and December 31, 2018 were as follows:



	September 30, 2019				December 31, 2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	112,945	$	113,000	$	391	$	391
Due after one year through five years	1,416		1,454		1,231		1,241
Total	$	114,361	$	114,454	$	1,622	$	1,632

Since the Company has the ability and intent to hold available-for-sale securities until a recovery of fair value is equal to an amount approximating its amortized cost, which may be at maturity, and has not incurred credit losses on its securities, it does not consider such unrealized loss positions to be other-than-temporarily impaired at September 30, 2019.

Debt Securities

Debt Securities are classified as available-for-sale securities within Investment Securities on the Unaudited Condensed Consolidated Statements of Financial Condition. These securities are stated at fair value with unrealized gains and losses included in Accumulated Other Comprehensive Income (Loss) and realized gains and losses included in earnings. The Company had net realized gains (losses) of ($3) and ($9) for the three and nine months ended September 30, 2019, respectively, and $9 and ($26) for the three and nine months ended September 30, 2018, respectively.

Equity Securities

Equity Securities are carried at fair value with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized and unrealized gains (losses) of $30 and $223 for the three and nine months ended September 30, 2019, respectively, and $114 and ($92) for the three and nine months ended September 30, 2018, respectively.

Debt Securities Carried by Broker-Dealers

EGL and other broker-dealers invest in fixed income portfolios consisting primarily of U.S. Treasury bills, municipal bonds and other debt securities. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations, as required for broker-dealers in securities. The Company had net realized and unrealized gains (losses) of ($55) and $459 for the three and nine months ended September 30, 2019, respectively, and ($207) and ($242) for the three and nine months ended September 30, 2018, respectively.

Investment Funds

The Company invests in a portfolio of exchange-traded funds and mutual funds as an economic hedge against the Company's deferred cash compensation program. See Note 16 for further information. These securities are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized and unrealized gains of $532 and $9,231 for the three and nine months ended September 30, 2019, respectively, and $3,004 and $4,120 for the three and nine months ended September 30, 2018, respectively.

Futures

In April 2019, the Company entered into three month futures contracts on a stock index fund with a notional amount of $14,815 for $680, as an economic hedge against the Company's deferred cash compensation program. These contracts settled in June 2019. In accordance with ASC 815, "Derivatives and Hedging," ("ASC 815") these contracts are carried at fair value, with changes in fair value recorded in Other Revenue, Including Interest and Investments, on the Unaudited Condensed Consolidated Statements of Operations. The Company had net realized gains of $59 for the nine months ended September 30, 2019.

Certificates of Deposit

At September 30, 2019, the Company held certificates of deposit of $211,861 with certain banks with original maturities of six months or less when purchased.

At December 31, 2018, the Company held certificates of deposit of $100,000 with certain banks with original maturities of six months or less when purchased. These certificates of deposit matured during the first quarter of 2019.