Note 10 - Investments in Marketable Securities

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

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

Note 10 – Investments in Marketable Securities

Our investments in marketable equity securities are carried at fair value with the changes in unrealized gains and losses recognized in our results of operations at each measurement date. Our investments in marketable debt securities are classified as available for sale securities and carried at fair value with the unrealized gains and losses recognized through accumulated other comprehensive income at each measurement date. Any credit related decline in fair market values of our available for sale debt securities are recorded in our results of operations through an allowance for credit losses. Realized gains and losses from securities sales are recognized in results of operations upon disposition of the securities using the specific identification method on a trade date basis. Refer to Note 11 for a description of the Company's methodology for determining the fair value of marketable securities.

Marketable securities consist of the following (in thousands):

	September 30, 2022				December 31, 2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Investments available for sale:
Marketable equity securities	$	30,176	$	107,655	$	30,176	$	113,108
Corporate debt securities		15,457		14,912		19,038		18,843
Asset-backed securities		501		490		1,481		1,469
U.S. Treasury securities		9,464		9,157		15,082		14,998
Restricted investments available for sale:
Marketable equity securities		24,851		20,341		25,442		26,958
Corporate debt securities		60,262		56,273		60,816		62,936
Asset-based securities		26,855		24,746		32,918		33,301
U.S. Treasury securities		43,083		38,149		33,052		32,630
State and municipal securities		4,908		4,704		7,700		7,923
	$	215,557	$	276,427	$	225,705		312,166

Included in the marketable equity securities are the following (in thousands, except share amounts):

	September 30, 2022						December 31, 2021
	Shares		Cost		Fair Value		Shares		Cost		Fair Value
NHI Common Stock		1,630,642	$	24,734	$	92,180		1,630,642	$	24,734	$	93,713

The amortized cost and estimated fair value of debt securities classified as available for sale, by contractual maturity, are as follows (in thousands):

	September 30, 2022				December 31, 2021
	Cost		Fair Value		Cost		Fair Value
Maturities:
Within 1 year	$	39,584	$	38,955	$	32,718	$	32,843
1 to 5 years		78,047		72,953		95,293		96,937
6 to 10 years		42,899		36,523		41,580		41,835
Over 10 years		-		-		496		485
	$	160,530	$	148,431	$	170,087	$	172,100

Gross unrealized gains related to marketable equity securities are $77,991,000 and $85,394,000 as of September 30, 2022 and December 31, 2021, respectively. Gross unrealized losses related to marketable equity securities are $5,022,000 and $946,000 as of September 30, 2022 and December 31, 2021, respectively. For the three months ended September 30, 2022 and 2021, the Company recognized net unrealized losses of $11,056,000 and $23,797,000, respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations. For the nine months ended September 30, 2022 and 2021, the Company recognized a net unrealized losses of $11,479,000 and a net unrealized loss of $23,227,000, respectively, for the changes in fair market value of the marketable equity securities in the interim condensed consolidated statements of operations.

Gross unrealized gains related to available for sale marketable debt securities are $0 and $3,189,000 as of September 30, 2022 and December 31, 2021, respectively. Gross unrealized losses related to available for sale marketable debt securities are $12,099,000 and $1,176,000 as of September 30, 2022 and December 31, 2021, respectively. As of  September 30, 2022, a total of 52 debt securities with a total market value of $45,367,000 have been in an unrealized loss position for greater than 12 months.

The Company’s unrealized losses in our available for sale marketable debt securities were determined to be non-credit related. The Company has not recognized any credit related impairments for the nine months ended  September 30, 2022 and 2021.

For the marketable securities in gross unrealized loss positions, (a) it is more likely than not that the Company will not be required to sell the investment securities before recovery of the unrealized losses, and (b) the Company expects that the contractual principal and interest will be received on the investment securities.

Proceeds from the sale of marketable securities during the nine months ended September 30, 2022 and 2021 were $38,114,000 and $89,129,000, respectively. Investment losses of $756,000 and investment gains of $941,000 were realized on these sales during the nine months ended September 30, 2022 and 2021, respectively.