Note 11

9 Months Ended

Jun. 29, 2019

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note 11 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 1	Observable input such as quoted prices in active markets for identical assets or liabilities;
Level 2	Observable inputs, other than Level 1 inputs in active markets, that are observable either directly or indirectly; and
Level 3	Unobservable inputs for which there is little or no market data, which require the reporting entity to develop its own assumptions.

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 1 of the fair value hierarchy.  The fair values of preferred stock, corporate bonds and certificates of deposit 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 deposit are classified within Level 2 of the fair value hierarchy. 

The amortized cost, unrealized gains and losses, and fair market values of our investment securities held to maturity at June 29, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	133,993	$	1,011	$	125	$	134,879
Certificates of Deposit		2,880		5		-		2,885
Total marketable securities held to maturity	$	136,873	$	1,016	$	125	$	137,764

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at June 29, 2019 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	5,549	$	-	$	394	$	5,155
Preferred Stock		15,681		254		58		15,877
Total marketable securities available for sale	$	21,230	$	254	$	452	$	21,032

The mutual funds seek current income with an emphasis on maintaining low volatility and overall moderate duration. The Fixed-to-Floating Perpetual Preferred Stock generate 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 mutual funds and Fixed-to-Floating Perpetual Preferred Stock 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. The corporate bonds generate fixed income to maturity dates in 2019 through 2022, with $112 million maturing within 2 years. 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 investment 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 investment 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 amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at June 29, 2019 and September 29, 2018 are summarized as follows:

	June 29, 2019				September 29, 2018
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
			(in thousands)
Due in one year or less	$	40,809	$	40,895	$	21,048	$	21,001
Due after one year through five years		96,064		96,869		118,765		117,313
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	136,873	$	137,764	$	139,813	$	138,314
Less current portion		40,809		40,895		21,048		21,001
Long term held to maturity securities	$	96,064	$	96,869	$	118,765	$	117,313

Proceeds from the redemption and sale of marketable securities were $6,584,800 and $29,721,000 in the three and nine months ended June 29, 2019 and were $21,964,000 and $51,417,000 in the three and nine months ended June 30, 2018, respectively. Realized losses of $8,000 and $25,000 were recorded in the three and nine months ended June 29, 2019 and realized losses of $35,000 and $32,000 were recorded in the three and nine months ended June 30, 2018, respectively. We use the specific identification method to determine the cost of securities sold. Under new accounting guidance adopted on the first day of this fiscal year, recognized unrealized losses on marketable securities of $118,000 and $385,000 were recorded in the three months and nine months ended June 29, 2019, respectively.