NOTE C – INVESTMENT SECURITIES

We have classified our investment securities as marketable securities held to maturity and available for sale. The FASB defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the FASB has established

three

levels of inputs that

may

be used to measure fair value:

Level

Observable inputs such as quoted prices in active markets for identical assets or liabilities;

Level

Observable inputs, other than Level

inputs in active markets, that are observable either directly or indirectly; and

Level

Unobservable inputs for which there is little or

market data, which require the reporting entity to develop its own assumptions.

Our marketable securities held to maturity and available for sale consist primarily of investments in mutual funds, preferred stock and corporate bonds. The fair values of mutual funds are based on quoted market prices in active markets and are classified within Level

of the fair value hierarchy. The fair values of preferred stock, corporate bonds and certificates of deposits are based on quoted prices for identical or similar instruments in markets that are

not

active. As a result, preferred stock, corporate bonds and certificates of deposits are classified within Level

of the fair value hierarchy.

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities held to maturity at

September 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	136,933	$	28	$	1,520	$	135,441
Certificates of Deposit		2,880		-		7		2,873
Total marketable securities held to maturity	$	139,813	$	28	$	1,527	$	138,314

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities available for sale at

September 29, 2018

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	8,978	$	-	$	295	$	8,683
Preferred Stock		15,680		380		-		16,060
Total marketable securities available for sale	$	24,658	$	380	$	295	$	24,743

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The mutual funds presently generate income of

4.5

% per year. We have invested

$16

million in Fixed-to-Floating Perpetual Preferred Stock which generates fixed income to call dates in

2019,

2020

and

2025

and then income is based on a spread above LIBOR if the securities are

not

called. The annual yield from these investments is presently

5.3%,

of which

50%

not

subject to income tax. The mutual funds and the Fixed-to-Floating Perpetual Preferred Stock investment securities do

not

have contractual maturities; however, we classify them as long term assets as it is our intent to hold them for a period of over

one

year, although we

may

sell some or all of them depending on presently unanticipated needs for liquidity or market conditions. We have invested

$135

million in corporate bonds which generate fixed income to maturity dates in

2018

through

2021,

with

$74

million maturing prior to the end of our fiscal year

2020.

The bonds presently generate income of about

2.6%

per year based on purchase price. Our expectation is that we will hold the corporate bonds to their maturity dates and redeem them at our amortized cost.

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities held to maturity at

September 30, 2017

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	114,101	$	424	$	155	$	114,370
Certificates of Deposit		5,920		18		1		5,937
Total marketable securities held to maturity	$	120,021	$	442	$	156	$	120,307

The amortized cost, unrealized gains and losses, and fair market values of our marketable securities available for sale at

September 30, 2017

are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	13,003	$	77	$	240	$	12,840
Preferred Stock		16,791		711		82		17,420
Total marketable securities available for sale	$	29,794	$	788	$	322	$	30,260

The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at

September 29, 2018

and

September 30, 2017

are summarized as follows:

	September 29, 2018				September 30, 2017

			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(in thousands)
Due in one year or less	$	21,048	$	21,001	$	59,113	$	59,194
Due after one year through five years		118,765		117,314		60,908		61,113
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	139,813	$	138,315	$	120,021	$	120,307
Less current portion		21,048		21,001		59,113		59,194
Long term held to maturity securities	$	118,765	$	117,314	$	60,908	$	61,113

Proceeds from the sale and redemption of marketable securities were

$75,302,000,

$22,997,000

and

$13,224,000

in the years ended

September 29, 2018,

September 30, 2017

and

September 24, 2016

respectively; with a loss of

$140,000

2018,

a gain of

$14,000

2017

and a loss of

$661,000

recorded in

2016.

We use the specific identification method to determine the cost of securities sold.