Investment Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 2020

Investment Securities and Fair Value Measurements

Investment Securities

Investment securities classified as available-for-sale consisted of the following at December 31, 2020 and 2019 (in thousands):


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Agency securities	$	17,104	$	29	$	(1)	$	17,132

Treasury securities	17,847		47		—		17,894
Total available-for-sale investment securities	$	34,951	$	76	$	(1)	$	35,026


	December 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Corporate bonds	$	9,597	$	18	$	(1)	$	9,614
Agency securities	11,101		17		—		11,118
Treasury securities	14,222		12		(1)		14,233
Total available-for-sale investment securities	$	34,920	$	47	$	(2)	$	34,965

At December 31, 2019, the unrealized losses on investment securities which have been in a net loss position for twelve months or greater were not material. These unrealized losses are considered temporary and there were no impairments considered to be "other-than-temporary" based on our evaluation of available evidence, which includes our intent to hold these investments to maturity or a recovery of the cost basis.

At December 31, 2020 and 2019, the contractual maturities of our investments did not exceed 36 months. The fair values of available-for-sale investments, by remaining contractual maturity, are as follows (in thousands):


	December 31, 2020				December 31, 2019
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due in one year or less	$	28,197	$	28,256	$	22,846	$	22,876
Due after one year through three years	6,754		6,770		12,074		12,089
Total available-for-sale investment securities	$	34,951	$	35,026	$	34,920	$	34,965

During the years ended December 31, 2020 and 2019, we had sales and maturities (which include calls) of investment securities, as follows (in thousands):


	Year Ended December 31, 2020
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	6	$	—	$	4,006	$	5,600
Agency securities	25		—		7,878		1,900

Treasury securities	4		(2)		4,827		19,830
	$	35	$	(2)	$	16,711	$	27,330


	Year Ended December 31, 2019
	Gross Realized Gains		Gross Realized Losses		Gross Proceeds from Sales		Gross Proceeds from Maturities
Corporate bonds	$	—	$	(1)	$	2,750	$	11,350
Agency securities	6		—		—		3,625

Treasury securities	—		—		—		685

	$	6	$	(1)	$	2,750	$	15,660

For the years ended December 31, 2020, 2019 and 2018 we received interest income net of the amortization and accretion of the premium and discount of $0.3 million, $0.6 million, and $1.0 million, respectively.

Fair Value Measurements

Recurring Fair Value Measurements

Financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables present our financial assets and liabilities measured at fair value on a recurring basis at December 31, 2020 and 2019, by level within the fair value hierarchy (in thousands):


	December 31, 2020
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	4,749	$	—	$	—	$	4,749
Treasury securities	97,433		—		—		97,433
Available-for-sale investment securities:

Agency securities	—		17,132		—		17,132

Treasury securities	17,894		—		—		17,894
Total	$	120,076	$	17,132	$	—	$	137,208


	December 31, 2019
	Level 1		Level 2		Level 3		Total Fair Value
Cash equivalents:
Money market funds	$	337	$	—	$	—	$	337

Available-for-sale investment securities:
Corporate bonds	—		9,614		—		9,614
Agency securities	—		11,118		—		11,118

Treasury securities	14,233		—		—		14,233
Total	$	14,570	$	20,732	$	—	$	35,302

The carrying amounts of cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities approximate fair value because of the short maturity of these items.

As of December 31, 2019, the estimated fair value of the $50.0 million term loan issued by Wells Fargo Bank, National Association ("Wells Fargo"), as administrative agent, and the lenders that are parties thereto ("Term Loan") and the $50.0 million revolving credit facility made available to us by Wells Fargo and the lenders that are parties thereto ("Revolving Facility," and, together with the Term Loan, the "Credit Facility"), approximated their carrying values due to the variable interest rates. We considered the fair value of the Credit Facility to be Level 2 measurements as these debt instruments were not actively traded. We carried the Term Loan at face value less the unamortized discount. Refer to Note 10, Long-Term Debt, of our Consolidated Financial Statements for more information about our since-terminated Credit Facility.

There were no changes to our valuation techniques used to measure asset and liability fair values on a recurring basis during the year ended December 31, 2020. The valuation techniques for the financial assets in the tables above are as follows:

Cash Equivalents

At December 31, 2020 and 2019, cash equivalents include cash invested in money market funds and treasury securities with a maturity of three months or less. Fair value is based on market prices for identical assets.

Available-for-Sale Investment Securities

Fair value for our Level 1 investment securities is based on market prices for identical assets. Our Level 2 securities were priced by a pricing vendor. The pricing vendor utilizes the most recent observable market information in pricing these securities or, if specific prices are not available for these securities, other observable inputs like market transactions involving comparable securities are used.

Non-Recurring Fair Value Measurements

Certain assets, including goodwill, intangible assets and our note receivable with SecureDocs, Inc., are also subject to measurement at fair value on a non-recurring basis using Level 3 measurement, but only when they are deemed to be impaired. For the years ended December 31, 2020, 2019 and 2018, no impairments were identified on those assets required to be measured at fair value on a non-recurring basis.