Note 11

3 Months Ended

Dec. 26, 2020

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 December 26, 2020 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds		42,881		606		15		43,472
Total marketable securities held to maturity	$	42,881	$	606	$	15	$	43,472

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at December 26, 2020 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	3,588	$	-	$	672	$	2,916
Preferred Stock		10,751		206		139		10,818
Total marketable securities available for sale	$	14,339	$	206	$	811	$	13,734

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 2021 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 2021 through 2023, with $41 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 26, 2020 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
			(in thousands)
Corporate Bonds		68,078		1,015		32		69,061
Total marketable securities held to maturity	$	68,078	$	1,015	$	32	$	69,061

The amortized cost, unrealized gains and losses, and fair market values of our investment securities available for sale at September 26, 2020 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
			(in thousands)
Mutual Funds	$	3,588	$	-	$	738	$	2,850
Preferred Stock		11,596		116		586		11,126
Total marketable securities available for sale	$	15,184	$	116	$	1,324	$	13,976

The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at December 26, 2020 and September 26, 2020 are summarized as follows:

	December 26, 2020				September 26, 2020
			Fair				Fair
	Amortized		Market		Amortized		Market
	Cost		Value		Cost		Value
	(in thousands)
Due in one year or less	$	34,286	$	34,745	$	51,151	$	51,815
Due after one year through five years		8,595		8,727		16,927		17,246
Due after five years through ten years		-		-		-		-
Total held to maturity securities	$	42,881	$	43,472	$	68,078	$	69,061
Less current portion		34,286		34,745		51,151		51,815
Long term held to maturity securities	$	8,595	$	8,727	$	16,927	$	17,246

Proceeds from the redemption and sale of marketable securities were $26,148,000 in the three months ended December 26, 2020 and $18,782,000 in the three ended December 28, 2019, respectively. Losses of $78,000 and $11,000 were recorded in the three months ended December 26, 2020 and December 28, 2019, respectively, which included unrealized gains on marketable securities of $603,000 and $71,000 in the three months ended December 26, 2020 and December 28, 2019, respectively. We use the specific identification method to determine the cost of securities sold.

Total marketable securities held to maturity as of December 26, 2020 with credit ratings of AAA/AA/A had an amortized cost basis totaling $16,866,000 and those with credit ratings of BBB/BB/B had an amortized cost basis totaling $26,015,000. This rating information was obtained December 31, 2020.