Note C - Investment Securities

12 Months Ended

Sep. 30, 2023

Notes to Financial Statements

Fair Value Disclosures [Text Block]

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 1 Observable inputs 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 and corporate bonds are based on quoted prices for identical or similar instruments in markets that are not active. As a result, preferred stock and corporate bonds are classified within Level 2 of the fair value hierarchy.

As of September 30, 2023, the Company held no held to maturity investment securities or marketable securities available for sale.

As of the end of fiscal 2023, the Company did not hold any mutual fund investments. However, during the fiscal year, the mutual funds held sought current income with an emphasis on maintaining low volatility and overall moderate duration. The mutual funds generated income of about 6.8% in the fiscal year. As of the end of fiscal 2023, the Company was not invested in Fixed-to-Floating Perpetual Preferred Stock. However, during the fiscal year, the Company held investments in Fixed-to-Floating Perpetual Preferred Stock which generated fixed income to call dates in 2025 and then income was based on a spread above LIBOR if the securities were not called. The annual yield from these investments was 6.1% in the fiscal year, of which 50% is not subject to income tax. As of the end of fiscal 2023, the Company held no held to maturity investment securities. However, during the fiscal year, the Company was invested in corporate bonds which generated fixed income to maturity dates in 2023. The bonds generated income of about 1.7% in the fiscal year based on purchase price.

As of September 30, 2023, the Company had no held to maturity marketable securities. The amortized cost, unrealized gains and losses, and fair market values of our marketable securities held to maturity at September 24, 2022 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Corporate Bonds	$	4,011	$	-	$	21	$	3,990
Total marketable securities held to maturity	$	4,011	$	-	$	21	$	3,990

As of September 30, 2023, the Company had no available for sale marketable securities. The amortized cost, unrealized gains and losses, and fair market values of our marketable securities available for sale at September 24, 2022 are summarized as follows:

			Gross		Gross		Fair
	Amortized		Unrealized		Unrealized		Market
	Cost		Gains		Losses		Value
	(in thousands)
Mutual Funds	$	3,588	$	-	$	742	$	2,846
Preferred Stock		2,816		46		-		2,862
Total marketable securities available for sale	$	6,404	$	46	$	742	$	5,708

As of September 30, 2023, the Company had no held to maturity securities. The amortized cost and fair value of the Company’s held to maturity securities by contractual maturity at September 24, 2022 are summarized as follows:

			Fair
	Amortized		Market
	Cost		Value
Due in one year or less	$	4,011	$	3,990
Due after one year through five years		-		-
Due after five years through ten years		-		-
Total held to maturity securities	$	4,011	$	3,990
Less current portion		4,011		3,990
Long term held to maturity securities	$	-	$	-

Proceeds from the sale and redemption of marketable securities were $9.7 million, $12.0 million, and $60.9 million in the years ended September 30, 2023, September 24, 2022, and September 25, 2021, respectively; with a loss of $0.7 million in 2023, a gain of $0.3 million in 2022 and a gain of $0.2 million in 2021. We use the specific identification method to determine the cost of securities sold. Unrealized gains of $0.7 million and $0.3 million were recorded in 2023 and 2022, respectively.