4. Investment Securities

Investment securities at September 30, 2014 and December 31, 2013 were as follows:

	Amortized		Unrealized	Unrealized
September 30, 2014	cost		gains	losses		Fair value
	(in thousands)
Available for sale securities:
Affiliated mutual funds	$	158,779	3,547	(2,043	)	160,283
	$	158,779	3,547	(2,043	)	160,283

Trading securities:
Mortgage-backed securities						33
Common stock						64
Affiliated mutual funds						83,541
						83,638

Total investment securities						$	243,921

	Amortized		Unrealized	Unrealized
December 31, 2013	cost		gains	losses		Fair value
	(in thousands)
Available for sale securities:
Mortgage-backed securities	$	8	1	—		9
Corporate bonds	14,568		61	—		14,629
Affiliated mutual funds	87,710		5,899	(957	)	92,652
	$	102,286	5,961	(957	)	107,290

Trading securities:
Mortgage-backed securities						37
Municipal bonds						501
Corporate bonds						9,412
Common stock						60
Affiliated mutual funds						84,048
						94,058

Total investment securities						$	201,348

Purchases of trading securities during the nine months ended September 30, 2014 were $129.5 million. Sales and maturities of trading securities were $115.2 million for the same period.

A summary of available for sale affiliated mutual funds with fair values below carrying values at September 30, 2014 and December 31, 2013 was as follows:

	Less than 12 months				12 months or longer			Total
			Unrealized		Fair	Unrealized		Fair	Unrealized
September 30, 2014	Fair value		losses		value	losses		value	losses
	(in thousands)
Affiliated mutual funds	$	97,124	(2,016	)	1,189	(27	)	98,313	(2,043	)
Total temporarily impaired securities	$	97,124	(2,016	)	1,189	(27	)	98,313	(2,043	)

	Less than 12 months				12 months or longer			Total
			Unrealized		Fair	Unrealized		Fair	Unrealized
December 31, 2013	Fair value		losses		value	losses		value	losses
	(in thousands)
Affiliated mutual funds	$	29,598	(939	)	213	(18	)	29,811	(957	)
Total temporarily impaired securities	$	29,598	(939	)	213	(18	)	29,811	(957	)

Based upon our assessment of these affiliated mutual funds, the time frame the funds have been in a loss position, and our intent to hold affiliated mutual funds until they have recovered, we determined that a write-down was not necessary at September 30, 2014.

Mortgage-backed securities accounted for as trading and held as of September 30, 2014 mature in 2022.

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 that are significant to the overall valuation. The three-level hierarchy of inputs is summarized as follows:

· Level 1 — Investments are valued using quoted prices in active markets for identical securities.

· 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. 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. The fair value of municipal bonds is measured based on pricing models that take into account, among other factors, information received from market makers and broker/dealers, current trades, bid-wants lists, offerings, market movements, the callability of the bond, state of issuance and benchmark yield curves. The fair value of corporate bonds is measured using various techniques, which consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads and fundamental data relating to the issuer.

The value of securities classified as Level 3 is 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 September 30, 2014 and December 31, 2013 that are recognized in our consolidated balance sheets using fair value measurements based on the differing levels of inputs.

September 30, 2014	Level 1		Level 2	Level 3	Total
	(in thousands)
Mortgage-backed securities	$	—	33	—	33
Common stock	64		—	—	64
Affiliated mutual funds	243,824		—	—	243,824
Total	$	243,888	33	—	243,921

December 31, 2013	Level 1		Level 2	Level 3	Total
	(in thousands)
Mortgage-backed securities	$	—	46	—	46
Municipal bonds	—		501	—	501
Corporate bonds	—		24,041	—	24,041
Common stock	60		—	—	60
Affiliated mutual funds	176,700		—	—	176,700
Total	$	176,760	24,588	—	201,348