MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2011

MARKETABLE SECURITIES

NOTE C – MARKETABLE SECURITIES

The Company classifies its securities as available-for-sale and therefore is required to adjust securities to fair value at each reporting date. All costs and both realized and unrealized gains and losses on securities are determined on a specific identification basis.

The following is a summary of available-for-sale securities at September 30, 2011 and December 31, 2010:

($ in thousands)	2011				2010
	Cost		Estimated Fair Value		Cost		Estimated Fair Value
Marketable Securities:
Certificates of deposit
with unrecognized losses for less than 12 months	$	1,186	$	1,177	$	1,040	$	1,034
with unrecognized losses for more than 12 months	$	100	$	100	$	—	$	—
with unrecognized gains		6,017		6,066		4,338		4,392
Total Certificates of deposit		7,303		7,343		5,378		5,426
US Treasury and agency notes
with unrecognized losses for less than 12 months		811		811		12,500		12,441
with unrecognized losses for more than 12 months		1,006		1,006		124		124
with unrecognized gains		21,303		21,446		7,211		7,342
Total US Treasury and agency notes		23,120		23,263		19,835		19,907
Corporate notes
with unrecognized losses for less than 12 months		9,674		9,513		5,135		5,077
with unrecognized losses for more than 12 months		525		512		—		—
with unrecognized gains		17,740		18,081		12,526		12,952
Total Corporate notes		27,939		28,106		17,661		18,029
Municipal notes
with unrecognized losses for less than 12 months		1,936		1,920		2,588		2,543
with unrecognized losses for more than 12 months		133		129		—		—
with unrecognized gains		6,597		6,766		3,038		3,080
Total Municipal notes		8,666		8,815		5,626		5,623
	$	67,028	$	67,527	$	48,500	$	48,985

We evaluate our securities for other-than-temporary impairment based on the specific facts and circumstances surrounding each security valued below its cost. Factors considered include the length of time the securities have been valued below cost, the financial condition of the issuer, industry reports related to the issuer, the severity of any decline, our intention not to sell the security, and our assessment as to whether it is not more likely than not that we will be required to sell the security before a recovery of its amortized cost basis. We then segregate the loss between the amounts representing a decrease in cash flows expected to be collected, or the credit loss, which is recognized through earnings, and the balance of the loss which is recognized through other comprehensive income.

At September 30, 2011, the fair market value of investment securities exceeded the cost basis by $499,000. The cost basis includes any other-than-temporary impairments that have been recorded for the securities. None have been recorded at September 30, 2011. The Company has determined that any unrealized losses in the portfolio are temporary as of September 30, 2011. The Company believes that market factors such as, changes in interest rates, liquidity discounts, and premiums required by market participants rather than an adverse change in cash flows or a fundamental weakness in credit quality of the issuer have led to the temporary declines in value. In the future based on changes in the economy, credit markets, financial condition of issuers, or market interest rates, this could change.

As of September 30, 2011, the adjustment to accumulated other comprehensive income (loss) in consolidated equity for the temporary change in the value of securities reflects an increase in the market value of available-for-sale securities of $14,000, which includes estimated taxes of $5,000.

As of September 30, 2011, the Company’s gross unrealized holding gains equal $700,000 and gross unrealized holding losses equal $201,000. On September 30, 2011, the average maturity of certificates of deposits was 2.38 years, the average maturity of U.S. Treasury and agency securities was 2.24 years, the average maturity of corporate notes was 2.61 years and the average maturity of municipal notes was 2.80 years. Currently, the Company has no securities with a remaining term to maturity of greater than five years.

The following tables summarize the maturities, at par, of marketable securities by year:

(in thousands)
At September 30, 2011	2011		2012		2013		2014		2015		Total
Certificates of deposit	$	1,634	$	1,536	$	1,168	$	982	$	1,784	$	7,104
U.S. Treasury and agency notes		3,248		4,734		9,785		3,701		1,538	$	23,006
Corporate notes		1,062		3,450		10,440		8,423		3,684	$	27,059
Municipal notes		350		910		2,505		3,945		725	$	8,435
	$	6,294	$	10,630	$	23,898	$	17,051	$	7,731	$	65,604

(in thousands)
At December 31, 2010	2011		2012		2013		2014		2015		Total
Certificates of deposit	$	2,234	$	1,547	$	1,168	$	286	$	—	$	5,235
U.S. Treasury and agency notes		3,516		4,734		8,535		1,969		980		19,734
Corporate notes		3,203		3,200		7,348		2,804		600		17,155
Municipal notes		930		910		1,750		1,840		—		5,430
	$	9,883	$	10,391	$	18,801	$	6,899	$	1,580	$	47,554

All of our securities are valued using level one indicators. Level one indicators are quoted market prices for the same or equivalent securities. The Company’s investments in corporate notes are with companies that have an investment grade rating from Standard & Poor’s.