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Fair Value Measurements

9 Months Ended

Dec. 26, 2020

The book value and estimated fair value of our financial instruments were as follows (in thousands):


	December 26, 2020				March 28, 2020
	Book Value		Estimated Fair Value		Book Value		Estimated Fair Value
Available-for-sale debt securities	$	16,673	$	16,673	$	14,774	$	14,774
Marketable equity securities	13,987		13,987		9,829		9,829
Non-marketable equity investments	21,791		21,791		21,536		21,536
Consumer loans receivable	81,592		96,313		82,304		97,395
Interest rate lock commitment derivatives	77		77		164		164
Forward loan sale commitment derivatives	(195)		(195)		(1,011)		(1,011)
Commercial loans receivable	39,746		38,300		46,565		46,819
Secured financings and other	(12,987)		(12,493)		(14,953)		(15,592)

See Note 19, Fair Value Measurements and the Fair Value of Financial Instruments caption in Note 1, Summary of Significant Accounting Policies in the Form 10-K for more information on the methodologies we use in determining fair value.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):


	December 26, 2020
	Total		Level 1		Level 2		Level 3

Residential mortgage-backed securities (1)	$	5,237	$	—	$	5,237	$	—
State and political subdivision debt securities (1)	6,306		—		6,306		—
Corporate debt securities (1)	5,130		—		5,130		—
Marketable equity securities (2)	13,987		13,987		—		—
Interest rate lock commitment derivatives (3)	77		—		—		77
Forward loan sale commitment derivatives (3)	(195)		—		—		(195)
Mortgage servicing rights (4)	831		—		—		831


	March 28, 2020
	Total		Level 1		Level 2		Level 3
Residential mortgage-backed securities (1)	$	5,443	$	—	$	5,443	$	—
State and political subdivision debt securities (1)	4,370		—		4,370		—
Corporate debt securities (1)	4,961		—		4,961		—
Marketable equity securities (2)	9,829		9,829		—		—
Interest rate lock commitment derivatives (3)	164		—		—		164
Forward loan sale commitment derivatives (3)	(1,011)		—		—		(1,011)
Mortgage servicing rights (4)	1,225		—		—		1,225

(1)Unrealized gains or losses on investments are recorded in Accumulated other comprehensive income at each measurement date.

(2)Unrealized gains or losses on investments are recorded in earnings at each measurement date.

(3)Gains or losses on derivatives are recorded in earnings through Cost of sales.

(4)Changes in the fair value of mortgage servicing rights are recorded in earnings through Net revenue.

No transfers between Level 1, Level 2 or Level 3 occurred during the nine months ended December 26, 2020.

Financial instruments for which fair value is disclosed but not required to be recognized in the balance sheet on a recurring basis are summarized below (in thousands):


	December 26, 2020
	Total		Level 1		Level 2		Level 3
Loans held for investment	$	59,167	$	—	$	—	$	59,167
Loans held for sale	23,223		—		—		23,223
Construction advances	13,923		—		—		13,923
Commercial loans receivable	38,300		—		—		38,300
Secured financings and other	(12,493)		—		(12,493)		—
Non-marketable equity investments	21,791		—		—		21,791


	March 28, 2020
	Total		Level 1		Level 2		Level 3
Loans held for investment	$	68,503	$	—	$	—	$	68,503
Loans held for sale	15,492		—		—		15,492
Construction advances	13,400		—		—		13,400
Commercial loans receivable	46,819		—		—		46,819
Secured financings and other	(15,592)		—		(15,592)		—
Non-marketable equity investments	21,536		—		—		21,536

No impairment charges were recorded during the nine months ended December 26, 2020.

Mortgage Servicing. Mortgage Servicing Rights ("MSRs") are the rights to receive a portion of the interest coupon and fees collected from the mortgagors for performing specified mortgage servicing activities, which consist of collecting loan payments, remitting principal and interest payments to investors, managing escrow accounts, performing loss mitigation activities on behalf of investors and otherwise administering the loan servicing portfolio. MSRs are initially recorded at fair value. Changes in fair value subsequent to the initial capitalization are recorded in earnings.


	December 26, 2020			March 28, 2020
Number of loans serviced with MSRs	4,663			4,688
Weighted average servicing fee (basis points)	31.81			31.12
Capitalized servicing multiple	44.23		%	67.19		%
Capitalized servicing rate (basis points)	14.07			20.91
Serviced portfolio with MSRs (in thousands)	$	590,433		$	585,777
MSRs (in thousands)	$	831		$	1,225

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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