Note D - Marketable Equity Securities

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE D: MARKETABLE EQUITY SECURITIES

The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income.

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note J.

The following table sets forth market value, cost, and unrealized gains on equity securities as of September 30, 2020 and December 31, 2019.

	September 30, 2020			December 31, 2019
	(in thousands)
Fair market value	$	25,157		$	29,521
Cost		26,551			24,156
Unrealized (loss) / gain	$	(1,394	)	$	5,365

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of September 30, 2020 and December 31, 2019.

	September 30, 2020			December 31, 2019
	(in thousands)
Gross unrealized gains	$	5,310		$	7,808
Gross unrealized losses		6,704			2,443
Net unrealized (loss) / gain	$	(1,394	)	$	5,365

The following table shows the Company’s net realized gains during the three and nine months ending on September 30, 2020 and 2019, respectively, on certain marketable equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020			2019
	(in thousands, except per share data)
Sales proceeds	$	-	$	883	$	861		$	1,645
Cost of securities sold		-		557		1,466			805
Realized gain / (loss)	$	-	$	326	$	(605	)	$	840

For the quarter ended September 30, 2020, the Company recognized dividends received of approximately $314,000 in non-operating income in its condensed consolidated statements of operations. For the quarter ended September 30, 2019, the Company recognized dividends received of approximately $348,000 in non-operating income in its condensed consolidated statements of operations.

For the nine months ended September 30, 2020, the Company recognized dividends received of approximately $946,000 in non-operating income in its condensed consolidated statements of operations. For the nine months ended September 30, 2019, the Company recognized dividends received of approximately $931,000 in non-operating income in its condensed consolidated statements of operations.

The Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of September 30, 2020, and December 31, 2019, the Company had outstanding borrowings of approximately $12,705,000 and $7,474,000, respectively, under its margin account. Margin account borrowings are used for the purchase of marketable equity securities and as a source of short-term liquidity and are included in accrued expenses and other liabilities on our balance sheets.

Our marketable equity securities portfolio had a net unrealized pre-tax loss in market value of approximately $498,000 during the third quarter of 2020, and a net unrealized pre-tax gain in market value of approximately $133,000 during the third quarter of 2019, which were reported as non-operating income for the respective periods.