Note 7 - Financial Instruments

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

7. FINANCIAL INSTRUMENTS

Investments—Trading

Investments-trading consisted of the following.

INVESTMENTS - TRADING

(Dollars in Thousands)

	March 31, 2024		December 31, 2023
Corporate bonds and redeemable preferred stock	$	44,611	$	53,657
Derivatives		2,768		7,470
Equity securities		644		928
Municipal bonds		20,169		20,572
Residential mortgage loans		1,554		3,113
RMBS		8		9
U.S. government agency debt securities		8,615		6,567
U.S. government agency MBS and CMOs		86,264		88,000
U.S. Treasury securities		1,270		1,012
Investments-trading	$	165,903	$	181,328

Substantially all of the Company's investments-trading serve as collateral for the Company's margin loan payable.  See note 6.

Trading Securities Sold, Not Yet Purchased

Trading securities sold, not yet purchased consisted of the following.

TRADING SECURITIES SOLD, NOT YET PURCHASED

(Dollars in Thousands)

	March 31, 2024		December 31, 2023
Corporate bonds and redeemable preferred stock	$	20,994	$	24,355
Derivatives		2,382		6,719
Equity securities		143		393
U.S. government agency debt securities		114		-
U.S. government agency MBS and CMOs		1		-
U.S. Treasury securities		33,481		34,284
Trading securities sold, not yet purchased	$	57,115	$	65,751

The Company manages its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. See note 5 for realized and unrealized gains recognized on investments-trading.

Other Investments, at Fair Value

Other investments, at fair value consisted of the following.

OTHER INVESTMENTS, AT FAIR VALUE

(Dollars in Thousands)

	March 31, 2024		December 31, 2023
Equity securities	$	27,773	$	38,038
Equity derivatives		956		1,447
Restricted equity securities		7,743		2,054
Corporate bonds and redeemable preferred stock		522		506
Fair value receivables		9,824		9,541
Interests in SPVs		4,111		12,609
CREO JV		5,362		4,783
U.S. Insurance JV		3,111		3,107
Residential mortgage loans		131		132
Other investments, at fair value	$	59,533	$	72,217

As of March 31, 2024, $16,186 of  equity securities, $883 of equity derivatives, and $3,056 of the fair value receivables represented long positions related to share forward arrangements ("SFAs") entered into by the Company. As of   December 31, 2023, $26,079 of unrestricted equity securities, $1,447 of equity derivatives, and $6,278 of the fair value receivables represented long positions related to SFAs entered into by the Company.  See note 9. 

Fair value receivables represent receivables (including receivables that are convertible into equity shares) from various counterparties in connection with the Company's advisory business. These receivables are carried at fair value.

Interests in SPVs represents interests the Company has received in SPVs as consideration for services provided by CCM, rather than cash.  The SPVs hold convertible notes receivable interests in the counterparties.  The Company does not consolidate the SPVs and carries its interests in the SPVs at fair value.  See note 9 for discussion of the determination of fair value.

A total of $883 and $946 of the amounts shown as other investments, at fair value above served as collateral for the Company's margin loan payable as of  March 31, 2024 and December 31, 2023, respectively.  See note 6.  

Other Investments Sold, Not Yet Purchased, at Fair Value

Other investments, sold not yet purchased, at fair value consisted of the following.

OTHER INVESTMENTS SOLD, NOT YET PURCHASED, AT FAIR VALUE

(Dollars in Thousands)

	March 31, 2024		December 31, 2023
Equity securities	$	3,371	$	97
Share forward liabilities		16,846		24,645
Other investments sold, not yet purchased, at fair value	$	20,217	$	24,742

Share forward liabilities represent derivative positions related to SFAs entered into by the Company.  See description of SFAs in note 9.