Fair Value Measurements

9 Months Ended

Sep. 30, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 14 – Fair Value Measurements

Certain of the Company’s assets are carried at fair value.  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The Company categorizes its assets and liabilities carried at fair value using a three-level hierarchy for fair value measurements that distinguishes between market participant assumptions developed based on market data obtained from sources independent of the Company (observable inputs) and the Company’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).  The hierarchy for inputs used in determining fair value maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available.  The hierarchy level assigned to the assets and liabilities is based on management’s assessment of the transparency and reliability of the inputs used to estimate the fair values at the measurement date.  The three hierarchy levels are defined as follows:

Level 1—Valuations based on unadjusted quoted market prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs (other than Level 1 prices), such as quoted prices for similar assets or liabilities at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement and involve management judgment.

If the inputs used to measure fair value fall into different levels of the fair value hierarchy, the hierarchy level assigned is based upon the lowest level of input that is significant to the fair value measurement.

The following tables present the fair values of the Company’s assets measured on a recurring basis:

(in thousands)	Total		Level 1		Level 2		Level 3
September 30, 2021
Debt securities:
U.S. Treasury bonds	$	171,743	$	—	$	171,743	$	—
Municipal bonds		1,613,801		—		1,613,801		—
Foreign government bonds		231,375		—		231,375		—
Governmental agency bonds		211,507		—		211,507		—
Governmental agency mortgage-backed securities		5,373,158		—		5,373,158		—
U.S. corporate debt securities		1,022,389		—		1,022,389		—
Foreign corporate debt securities		471,833		—		471,833		—
		9,095,806		—		9,095,806		—
Marketable equity securities:
Preferred stocks		16,944		16,944		—		—
Common stocks		743,814		743,814		—		—
		760,758		760,758		—		—
Total assets	$	9,856,564	$	760,758	$	9,095,806	$	—

(in thousands)	Total		Level 1		Level 2		Level 3
December 31, 2020
Debt securities:
U.S. Treasury bonds	$	80,846	$	—	$	80,846	$	—
Municipal bonds		1,248,808		—		1,248,808		—
Foreign government bonds		199,530		—		199,530		—
Governmental agency bonds		263,922		—		263,922		—
Governmental agency mortgage-backed securities		3,474,618		—		3,474,618		—
U.S. corporate debt securities		680,697		—		680,697		—
Foreign corporate debt securities		406,401		—		406,401		—
		6,354,822		—		6,354,822		—
Marketable equity securities:
Preferred stocks		19,479		19,479		—		—
Common stocks		444,647		444,647		—		—
		464,126		464,126		—		—
Total assets	$	6,818,948	$	464,126	$	6,354,822	$	—

Assets measured at fair value on a non-recurring basis

The Company’s non-marketable equity securities, equity method investments, and certain non-financial assets, such as goodwill, other intangible assets, title plants and other indexes and property and equipment are recorded at fair value at the time an impairment or observable price adjustment occurs.

The Company recognized $165.1 million in unrealized gains during the nine months ended September 30, 2021 resulting from observable price adjustments on its non-marketable equity securities still held at September 30, 2021, which are classified as Level 2.

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not measured at fair value:

	Carrying		Estimated fair value
(in thousands)	Amount		Total		Level 1		Level 2		Level 3
September 30, 2021
Assets:
Cash and cash equivalents	$	1,953,987	$	1,953,987	$	1,953,987	$	—	$	—
Deposits with banks	$	51,119	$	51,235	$	8,362	$	42,873	$	—
Notes receivable, net	$	38,204	$	38,686	$	—	$	—	$	38,686
Secured financings receivable	$	651,048	$	651,048	$	—	$	651,048	$	—
Liabilities:
Secured financings payable	$	593,607	$	593,607	$	—	$	593,607	$	—
Notes and contracts payable	$	1,648,863	$	1,732,520	$	—	$	1,728,170	$	4,350

	Carrying		Estimated fair value
(in thousands)	Amount		Total		Level 1		Level 2		Level 3
December 31, 2020
Assets:
Cash and cash equivalents	$	1,275,466	$	1,275,466	$	1,275,466	$	—	$	—
Deposits with banks	$	45,856	$	45,947	$	6,092	$	39,855	$	—
Notes receivable, net	$	29,912	$	30,279	$	—	$	—	$	30,279
Secured financings receivable	$	748,312	$	748,312	$	—	$	748,312	$	—
Liabilities:
Secured financings payable	$	516,155	$	516,155	$	—	$	516,155	$	—
Notes and contracts payable	$	1,010,756	$	1,131,356	$	—	$	1,125,128	$	6,228