Marketable Securities

6 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

ASC Topic 320, “Investments – Debt and Equity Securities,” requires that an enterprise classify all debt securities as either held-to-maturity, trading or available-for-sale. The Company classifies its securities as available-for-sale and therefore is required to adjust securities to fair value at each reporting date. All costs and both realized and unrealized gains and losses on securities are determined on a specific identification basis. The following is a summary of available-for-sale securities at:



($ in thousands)		June 30, 2020				December 31, 2019
Marketable Securities:	Fair Value Hierarchy	Cost		Fair Value		Cost		Fair Value
Certificates of deposit
with unrealized losses for less than 12 months		$	—	$	—	$	251	$	250
with unrealized losses for more than 12 months		—		—		—		—
with unrealized gains		1,799		1,815		1,799		1,806
Total Certificates of deposit	Level 1	1,799		1,815		2,050		2,056
U.S. Treasury and agency notes
with unrealized losses for less than 12 months		—		—		6,485		6,479
with unrealized losses for more than 12 months		—		—		—		—
with unrealized gains		14,630		14,688		14,413		14,434
Total U.S. Treasury and agency notes	Level 2	14,630		14,688		20,898		20,913
Corporate notes
with unrealized losses for less than 12 months		1,583		1,582		1,004		1,002
with unrealized losses for more than 12 months		—		—		—		—
with unrealized gains		7,202		7,233		13,082		13,106
Total Corporate notes	Level 2	8,785		8,815		14,086		14,108
Municipal notes
with unrealized losses for less than 12 months		—		—		—		—
with unrealized losses for more than 12 months		—		—		—		—
with unrealized gains		2,000		2,005		1,999		2,007
Total Municipal notes	Level 2	2,000		2,005		1,999		2,007
		$	27,214	$	27,323	$	39,033	$	39,084

The Company adopted ASU No. 2016-13, "Financial Instruments — Credit Losses (Topic 326)" on January 1, 2020 prospectively. Under ASC Topic 326-30, the Company is now required to use an allowance approach when recognizing credit loss for available-for-sale debt securities, measured as the difference between the security's amortized cost basis and the amount expected to be collected over the security's lifetime. Under this approach, at each reporting date, the Company records impairment related to credit losses through earnings offset with an allowance for credit losses, or ACL.

At June 30, 2020, the fair market value of marketable securities was $109,000 above their cost basis. The Company’s gross unrealized holding gains equaled $110,000 and gross unrealized holding losses equaled $1,000. As of June 30, 2020, the adjustment to accumulated other comprehensive loss reflected an improvement in market value of $58,000, including estimated taxes of $16,000.

The Company elected to exclude applicable accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities, and separately present the accrued interest receivable balance per ASC Topic 326-30-50-3A. The accrued interest receivables balance totaled $125,000 as of June 30, 2020, and was included within the Other Assets line item of the Consolidated Balance Sheets. The Company elected not to measure an allowance for credit losses on accrued interest receivable as an allowance on possible uncollectible accrued interest receivable is recorded in a timely manner.

U.S. Treasury and agency notes

The unrealized losses on the Company's investments in U.S. Treasury and agency notes at December 31, 2019 were caused by relative changes in interest rates since the time of purchase. The contractual cash flows for these securities are guaranteed by U.S. government agencies. The unrealized losses on these debt security holdings are a function of changes in investment spreads and interest rate movements and not changes in credit quality. As of December 31, 2019, the Company did not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities before recovery of their cost basis. Therefore, these investments did not require an ACL as of December 31, 2019.

Corporate notes

The contractual terms of those investments do not permit the issuers to settle the securities at a price less than the amortized cost basis of the investments.The unrealized losses on Corporate notes are a function of changes in investment spreads and interest rate movements and not changes in credit quality. The Company expects to recover the entire amortized cost basis of these securities. As of June 30, 2020, the Company did not intend to sell these securities and it is not more-likely-than-not that the Company would be required to sell these securities before recovery of their cost basis. Therefore, these investments did not require an ACL as of June 30, 2020.

The following tables summarize the maturities, at par, of marketable securities as of:



	June 30, 2020
($ in thousands)	2020		2021		Total
Certificates of deposit	$	1,799	$	—	$	1,799
U.S. Treasury and agency notes	13,821		802		14,623
Corporate notes	6,800		1,950		8,750
Municipal notes	2,000		—		2,000
	$	24,420	$	2,752	$	27,172



	December 31, 2019
($ in thousands)	2020		2021		Total
Certificates of deposit	$	2,049	$	—	$	2,049
U.S. Treasury and agency notes	20,393		502		20,895
Corporate notes	13,685		400		14,085
Municipal notes	2,000		—		2,000
	$	38,127	$	902	$	39,029

The Company’s investments in corporate notes are with companies that have an investment grade rating from Standard & Poor’s as of June 30, 2020.