XML 60 R17.htm IDEA: XBRL DOCUMENT v3.22.4
Investment Securities
 12 Months Ended
Dec. 31, 2022
Investments, Debt and Equity Securities [Abstract]  
Investment Securities INVESTMENT SECURITIES
Investment securities at fair value consisted of the following:
December 31, 2022December 31, 2021
Debt securities available for sale$81,643 $103,906 
Equity securities at fair value:
     Marketable equity securities12,724 19,560 
     Mutual funds invested in debt securities22,069 23,221 
     Long-term investment securities at fair value (1)
28,919 32,089 
     Total equity securities at fair value63,712 74,870 
Total investment securities at fair value145,355 178,776 
Less:
     Long-term investment securities at fair value (1)
28,919 32,089 
Current investment securities at fair value$116,436 $146,687 
Long-term investment securities at fair value (1)
$28,919 $32,089 
Equity-method investments16,040 20,984 
     Total long-term investments$44,959 $53,073 
Equity securities at cost: (2)
     Other equity securities at cost$2,755 $5,200 
_____________________________
(1)     These assets are measured at net asset value (“NAV”) as a practical expedient under ASC 820.
(2)     These assets are without readily determinable fair values that do not qualify for the NAV practical expedient and are included in Other assets on the consolidated balance sheets.
Net gains recognized on investment securities were as follows:
Year Ended December 31,
202220212020
Net (losses) gains recognized on equity securities at fair value$(5,011)$9,615 $2,123 
Net gains recognized on debt and equity securities available for sale6 45 110 
Impairment expense(2,975)(276)(415)
Net gains recognized on investment securities$(7,980)$9,384 $1,818 
(a) Debt Securities Available for Sale:
The components of debt securities available for sale at December 31, 2022 were as follows:
CostGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Marketable debt securities$81,629 $14 $— $81,643 
The table below summarizes the maturity dates of debt securities available for sale at December 31, 2022.
Investment Type:
Fair ValueUnder 1 Year1 Year up to 5 YearsMore than 5 Years
U.S. Government securities$779 $779 $— $— 
Corporate securities53,814 33,165 20,649 — 
U.S. mortgage-backed securities27,050 10,103 16,947 — 
Total debt securities available for sale by maturity dates
$81,643 $44,047 $37,596 $— 
The components of debt securities available for sale at December 31, 2021 were as follows:
CostGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair
Value
Marketable debt securities$103,838 $68 $— $103,906 
There were no available-for-sale debt securities with continuous unrealized losses for less than 12 months and 12 months or greater at December 31, 2022 and 2021, respectively.
Gross realized gains and losses recognized on debt securities available for sale were as follows:
Year Ended December 31,
202220212020
Gross realized gains on sales$8 $108 $329 
Gross realized losses on sales(2)(63)(219)
Net gains recognized on debt securities available for sale$6 $45 $110 
Impairment expense$(2,975)$(276)$(415)
Although management generally does not have the intent to sell any specific securities at the end of the period, in the ordinary course of managing the Company’s investment securities portfolio, management may sell securities prior to their maturities for a variety of reasons, including diversification, credit quality, yield and liquidity requirements.
(b) Equity Securities at Fair Value:
The following is a summary of unrealized and realized net gains and losses recognized in net income on equity securities at fair value for the years ended December 31, 2022, 2021 and 2020, respectively:
Year Ended December 31,
202220212020
Net (losses) gains recognized on equity securities $(5,011)$9,615 $2,123 
Less: Net gains (losses) recognized on equity securities sold1,198 7,534 (121)
Net unrealized (losses) gains recognized on equity securities still held at the reporting date$(6,209)$2,081 $2,244 
The Company’s mutual funds invested in debt securities are classified as Level 1 under the fair value hierarchy disclosed in Note 18. Their fair values are based on quoted prices for identical assets in active markets or inputs that are based upon quoted prices for similar instruments in active markets. The Company has unfunded commitments of $514 related to long-term investment securities at fair value as of December 31, 2022.
The Company received cash distributions of $4,971 as of December 31, 2022, all of which were classified as investing cash inflows. The Company received cash distributions of $11,642 as of December 31, 2021, of which $11,509 were classified as investing cash inflows. The Company received cash distributions of $32,676 as of December 31, 2020, of which $32,572 were classified as investing cash inflows.
(c) Equity Securities Without Readily Determinable Fair Values That Do Not Qualify for the NAV Practical Expedient
Equity securities without readily determinable fair values that do not qualify for the NAV practical expedient consisted of investments in various limited liability companies at December 31, 2022 and 2021, respectively. The total carrying value of these investments was $2,755 and $5,200 and was included in “Other assets” on the consolidated balance sheets at December 31, 2022 and 2021, respectively. No impairment or other adjustments related to observable price changes in orderly transactions for identical or similar investments were identified for the years ended December 31, 2022, 2021 and 2020, respectively.
(d) Equity-Method Investments:
Equity-method investments consisted of the following:
 December 31, 2022December 31, 2021
Mutual and hedge funds$16,040 $20,984 
At December 31, 2022, the Company’s ownership percentages in the mutual and hedge funds accounted for under the equity method ranged from 6.45% to 38.34%. The Company’s ownership percentage in these investments meets the threshold for equity-method accounting.
On February 14, 2020, Ladenburg Thalmann Financial Services Inc. (“LTS”) was acquired pursuant to a cash tender offer of $3.50 per outstanding common share and, in connection therewith, the Company received proceeds of $53,169 in exchange for the Company’s 15,191,205 common shares of LTS. The Company also tendered 240,000 shares of LTS 8% Series A Cumulative Redeemable Preferred Stock (Liquidation Preference $25.00 Per Share) for redemption and received an additional $6,009 in March 2020.
Equity in (losses) earnings from investments were:
Year Ended December 31,
 202220212020
Mutual fund and hedge funds$(4,995)$2,675 $2,844 
Ladenburg Thalmann Financial Services Inc. — — 53,424 
Equity in (losses) earnings from investments$(4,995)$2,675 $56,268 
The Company received $51 and $50 in dividends from one of its equity-method investments that were reinvested back into the fund in 2022 and 2021, respectively. The Company received total cash distributions of $54,089 ($53,901, net of reinvested dividends) from the Company’s equity-method investments in 2020. The cash distributions of $53,901 in 2020 were classified as operating cash inflows.
(e) Combined Financial Statements for Unconsolidated Subsidiaries Accounted for on Equity Method
Pursuant to Rule 4-08(g), the following summarized financial data for unconsolidated subsidiaries includes information for the mutual fund and hedge funds.
December 31,
2022		December 31,
2021
Investment securities$299,389 $493,705 
Cash and cash equivalents2,860 44,644 
Other assets87,507 14,151 
    Total assets$389,756 $552,500 
Other liabilities$159,246 $214,607 
    Total liabilities159,246 214,607 
Partners’ capital230,510 337,893 
      Total liabilities and partners’ capital$389,756 $552,500 
Year Ended December 31,
202220212020
Investment income$3,209 $1,574 $1,779 
Expenses13,272 12,873 9,300 
    Net investment loss(10,063)(11,299)(7,521)
Total net realized gain and net change in unrealized depreciation from investments(84,466)48,342 123,381 
Net increase in partners’ capital resulting from operations$(94,529)$37,043 $115,860