Investment Securities

12 Months Ended

Dec. 31, 2011

Investment Securities

Investment Securities

4.     Investment Securities

        Investment securities at December 31, 2011 and 2010 are as follows:

2011	Amortized cost		Unrealized gains		Unrealized losses		Fair value
	(in thousands)
Available for sale securities:
Mortgage-backed securities	$	9		2		-		11
Municipal bonds		2,549		-		(13)		2,536
Corporate bonds		45,893		170		(89)		45,974
Affiliated mutual funds		51,456		2,738		(5,379)		48,815
	$	99,907		2,910		(5,481)		97,336
Trading securities:
Mortgage-backed securities								63
Municipal bonds								500
Corporate bonds								17,319
Common stock								37
Affiliated mutual funds								20,242
								38,161
Total investment securities								135,497

2010	Amortized cost		Unrealized gains		Unrealized losses		Fair value
	(in thousands)
Available for sale securities:
U.S. treasury bills(1)	$	56,961						56,961
Mortgage-backed securities		10		2		-		12
Municipal bonds		2,729		-		(185)		2,544
Affiliated mutual funds		28,633		5,662		(37)		34,258
	$	88,333		5,664		(222)		93,775
Trading securities:
Commercial paper								4,997
U.S. treasury bills(1)								60,958
Mortgage-backed securities								73
Municipal bonds								487
Corporate bonds								50
Common stock								201
Affiliated mutual funds								32,070
								98,836
Total investment securities								192,611

(1)

U.S. treasury bills at December 31, 2010 had maturities of less than 180 days at the date of purchase.

        A summary of available for sale debt securities and affiliated mutual funds with fair values below carrying values at December 31, 2011 is as follows:

	Less than 12 months				12 months or longer				Total
	Fair value		Unrealized losses		Fair value		Unrealized losses		Fair value		Unrealized losses
	(in thousands)
Municipal bonds	$	-		-		2,536		(13)		2,536		(13)
Corporate bonds		16,769		(89)		-		-		16,769		(89)
Affiliated mutual funds		36,801		(5,362)		209		(17)		37,010		(5,379)
Total temporarily impaired securities	$	53,570		(5,451)		2,745		(30)		56,315		(5,481)

        Based upon our assessment of these municipal bonds, corporate bonds and affiliated mutual funds, the time frame investments have been in a loss position, our intent to hold affiliated mutual funds until they have recovered and our history of holding bonds until maturity, we determined that a write-down was not necessary at December 31, 2011.

        During the first quarter of 2009, we recorded a pre-tax charge of $3.7 million to reflect the "other than temporary" decline in value of certain of the Company's investments in affiliated mutual funds as the fair value of these investments had been below cost for an extended period. This charge is recorded in investment and other income in the consolidated statement of income for 2009.

        Mortgage-backed securities, municipal bonds and corporate bonds accounted for as available for sale and held as of December 31, 2011 mature as follows:

	Amortized cost		Fair value
	(in thousands)
Within one year	$	14,680		14,619
After one year but within 10 years		32,770		32,913
After 10 years		1,001		989
	$	48,451		48,521

        Mortgage-backed securities, municipal bonds and corporate bonds accounted for as trading and held as of December 31, 2011 mature as follows:

	Fair value
	(in thousands)
Within one year	$	5,081
After one year but within 10 years		12,738
After 10 years		63
	$	17,882

        Investment securities with fair values of $55.7 million, $45.1 million and $24.7 million were sold during 2011, 2010 and 2009, respectively. During 2011, net realized gains of $2.3 million and $1.4 million were recognized from the sale of $22.1 million in available for sale securities and the sale of $33.6 million in trading securities, respectively. During 2010, net realized gains of $2.9 million and $2.9 million were recognized from the sale of $24.2 million in available for sale securities and the sale of $20.9 million in trading securities, respectively. During 2009, net gains of $2.6 million and $126 thousand were recognized from the sale of $14.7 million in available for sale securities and the sale of $10.0 million in trading securities, respectively.

        The aggregate carrying amount of our equity method investments, classified in other assets, was $5.6 million and $6.9 million at December 31, 2011 and 2010, respectively. At December 31, 2011, our investments consist of limited partnership interests in venture capital funds.

        Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of the asset. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset. An individual investment's fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized as follows:

• •

  Level 1 — Investments are valued using quoted prices in active markets for identical securities at the reporting date.

  •

  Level 2 — Investments are valued using other significant observable inputs, including quoted prices in active markets for similar securities.

  •

  Level 3 — Investments are valued using significant unobservable inputs, including the Company's own assumptions in determining the fair value of investments.

        Assets classified as Level 2 can have a variety of observable inputs, including, but not limited to, benchmark yields, reported trades, broker quotes, benchmark securities and bid/offer quotations. These observable inputs are collected and utilized, primarily by an independent pricing service, in different evaluated pricing approaches depending upon the specific asset to determine a value. Securities' values classified as Level 3 are primarily determined through the use of a single quote (or multiple quotes) from dealers in the securities using proprietary valuation models. These quotes involve significant unobservable inputs, and thus the related securities are classified as Level 3 securities.

        The following tables summarize our investment securities as of December 31, 2011 and 2010 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs:

2011	Level 1		Level 2		Level 3		Total
	(in thousands)
Mortgage-backed securities	$	-		74		-		74
Municipal bonds		-		3,036		-		3,036
Corporate bonds		-		63,293		-		63,293
Common stock		37		-		-		37
Affiliated mutual funds		69,057		-		-		69,057
Total	$	69,094	$	66,403	$	-	$	135,497

2010	Level 1		Level 2		Level 3		Total
	(in thousands)
Commercial paper	$	4,997		-		-		4,997
U.S. treasury bills		117,919		-		-		117,919
Mortgage-backed securities		-		85				85
Municipal bonds		-		3,031		-		3,031
Corporate bonds		-		50		-		50
Common stock		201		-		-		201
Affiliated mutual funds		66,328		-		-		66,328
Total	$	189,445	$	3,166	$	-	$	192,611