| FAIR VALUE OF FINANCIAL INSTRUMENTS |
NOTE 9. FAIR VALUE OF FINANCIAL INSTRUMENTS The following table presents the carrying value and estimated fair value of the Company’s financial instruments not carried at fair value on the consolidated balance sheets at March 31, 2022 and December 31, 2021 (in thousands): | | | | | | | | | | | | | | | March 31, 2022 | | December 31, 2021 | | | Carrying Value | | Estimated Fair Value | | Carrying Value | | Estimated Fair Value | Cash and Cash Equivalents - Level 1 | | $ | 9,450 | | $ | 9,450 | | $ | 8,615 | | $ | 8,615 | Restricted Cash - Level 1 | | $ | 26,385 | | $ | 26,385 | | $ | 22,734 | | $ | 22,734 | Commercial Loan and Master Lease Investments - Level 2 | | $ | 21,830 | | $ | 21,922 | | $ | 39,095 | | $ | 39,109 | Long-Term Debt - Level 2 | | $ | 298,079 | | $ | 301,902 | | $ | 278,273 | | $ | 288,000 |
To determine estimated fair values of the financial instruments listed above, market rates of interest, which include credit assumptions, were used to discount contractual cash flows. The estimated fair values are not necessarily indicative of the amount the Company could realize on disposition of the financial instruments. The use of different market assumptions or estimation methodologies could have a material effect on the estimated fair value amounts. The following table presents the fair value of assets measured on a recurring basis by level as of March 31, 2022 and December 31, 2021 (in thousands). See Note 17, “Interest Rate Swaps” for further disclosure related to the Company’s interest rate swaps. | | | | | | | | | | | | | | | | | | Fair Value at Reporting Date Using | | | Fair Value | | Quoted Prices in Active Markets for Identical Assets (Level 1) | | Significant Other Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | March 31, 2022 | | | | | | | | | | | | | Cash Flow Hedge - 2026 Term Loan Interest Rate Swap (1) | | $ | 2,984 | | $ | — | | $ | 2,984 | | $ | — | Cash Flow Hedge - 2026 Term Loan Interest Rate Swap (2) | | $ | 929 | | $ | — | | $ | 929 | | $ | — | Cash Flow Hedge - 2027 Term Loan Interest Rate Swap (3) | | $ | 5,616 | | $ | — | | $ | 5,616 | | $ | — | Investment Securities | | $ | 38,587 | | $ | 38,587 | | $ | — | | $ | — | December 31, 2021 | | | | | | | | | | | | | Cash Flow Hedge - 2026 Term Loan Interest Rate Swap (1) | | $ | 727 | | $ | — | | $ | 727 | | $ | — | Cash Flow Hedge - 2026 Term Loan Interest Rate Swap (2) | | $ | 240 | | $ | — | | $ | 240 | | $ | — | Cash Flow Hedge - 2027 Term Loan Interest Rate Swap (3) | | $ | 550 | | $ | — | | $ | 550 | | $ | — | Investment Securities | | $ | 41,037 | | $ | 41,037 | | $ | — | | $ | — |
(1) | Effective March 10, 2021, the Company redesignated the interest rate swap, entered into as of August 31, 2020, to fix LIBOR and achieve a fixed interest rate of 0.22% plus the applicable spread on the $50.0 million 2026 Term Loan, hereinafter defined. |
(2) | Effective August 31, 2021, the Company utilized an interest rate swap to fix LIBOR and achieve a fixed interest rate of 0.77% plus the applicable spread on the remaining $15.0 million outstanding principal balance on the 2026 Term Loan, hereinafter defined. |
(3) | Effective November 5, 2021 the Company redesignated the interest rate swap, entered into as of March 31, 2020, to fix LIBOR and achieve a fixed interest rate of 0.73% plus the applicable spread on the $100.0 million 2027 Term Loan, hereinafter defined. |
No assets were measured on a non-recurring basis as of March 31, 2022 or December 31, 2021.
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