Note D - Marketable Equity Securities

9 Months Ended

Sep. 30, 2021

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, 2021 and December 31, 2020.

	September 30, 2021		December 31, 2020
	(in thousands)
Fair market value	$	36,130	$	27,941
Cost		29,585		25,860
Unrealized gain	$	6,545	$	2,081

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of September 30, 2021 and December 31, 2020.

	September 30, 2021		December 31, 2020
	(in thousands)
Gross unrealized gains	$	10,141	$	7,048
Gross unrealized losses		3,596		4,967
Net unrealized gain	$	6,545	$	2,081

The following table shows the Company’s net realized gains during the three and nine months ending on September 30, 2021 and 2020, respectively, on certain marketable equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
	(in thousands)
Sales proceeds	$	72	$	-	$	1,496	$	861
Cost of securities sold		19		-		560		1,466
Realized gain / (loss)	$	53	$	-	$	936	$	(605	)

For the quarter ended September 30, 2021, the Company recognized dividends received of approximately $335,000 in non-operating income in its condensed consolidated statements of operations. 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 nine months ended September 30, 2021, the Company recognized dividends received of approximately $995,000 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.

The Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of September 30, 2021, and December 31, 2020, the Company had outstanding borrowings of approximately $13,102,000 and $12,705,000, 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 $456,000 during the third quarter of 2021, and a net unrealized pre-tax loss in market value of approximately $498,000 during the third quarter of 2020, which were reported as non-operating income for the respective periods.