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Financial Instruments | 9 Months Ended
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Sep. 30, 2020
Investments All Other Investments [Abstract] |
Financial Instruments | Note 6. Financial Instruments Available-For-Sale Debt Securities - In connection with certain services provided by our payroll operations, we collect funds from our clients’ accounts in advance of paying client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires all investments carry an investment grade rating at the time of initial investment. These investments, primarily consisting of corporate and municipal bonds and US treasury bills, are classified as available-for-sale and are included in the “Funds held for clients” line item on the accompanying Consolidated Balance Sheets. The par value of these investments totaled $29.4 million and $58.9 million at September 30, 2020 and December 31, 2019, respectively, and had maturity or callable dates ranging from October 2020 through November 2024. At September 30, 2020, unrealized losses on the securities totaling $0.1 million have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments. The following table summarizes activities related to these investments for the nine months ended September 30, 2020 and the twelve months ended December 31, 2019 (in thousands):
|  | Nine Months Ended |  |  | Twelve Months Ended |
|  | September 30, 2020 |  |  | December 31, 2019 |
Fair value at beginning of period |  | $ | 60,659 |  |  | $ | 56,556 |
Purchases |  |  | 3,447 |  |  |  | 27,216 |
Redemptions |  |  | (22,078 | ) |  |  | (1,686 | )
Maturities |  |  | (10,889 | ) |  |  | (22,272 | )
Decrease in bond premium |  |  | (750 | ) |  |  | (460 | )
Fair market value adjustment |  |  | 2 |  |  |  | 1,305 |
Fair value at end of period |  | $ | 30,391 |  |  | $ | 60,659 |
In addition to the available-for-sale securities discussed above, we also held certified deposits and other depository assets in the amount of $2.5 million at December 31, 2019. We did not have any depository items at September 30, 2020. Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2018 credit facility, or the forecasted acquisition of such liability. We do not purchase or hold any derivative instruments for trading or speculative purposes. In March 2020, we entered into a new interest rate swap with a notional amount of $50 million and a fixed interest rate of 0.885%. Effective June 26, 2020, we terminated an existing interest rate swap with the notional value of $25 million, fixed interest rate of 1.30% and an expiration date of October 2020. Refer to the Annual Report on Form 10-K for the year ended December 31, 2019 for further discussion on our interest rate swaps. As of September 30, 2020, we have four interest rate swaps outstanding. Under the terms of the interest rate swaps, we pay interest at a fixed rate of interest plus applicable margin as stated in the agreement, and receive interest that varies with the one-month LIBOR. The notional value, fixed rate of interest and expiration date of each interest rate swap as of September 30, 2020 was (i) $10 million – 1.120% - February 2021, (ii) $20 million – 1.770% - May 2022, (iii) $15 million – 2.640% - June 2023 and (iv) $50 million - 0.885% - April 2025. Refer to Note 7. Fair Value Measurements, for additional disclosures regarding fair value measurements. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at September 30, 2020 and December 31, 2019 (in thousands):
|  | September 30, 2020
|  | Notional |  |  | Fair |  |  |
|  | Amount |  |  | Value |  |  | Balance Sheet Location
Interest rate swaps |  | $ | 10,000 |  |  | $ | (37 | ) |  | Other current liability
Interest rate swaps |  | $ | 85,000 |  |  | $ | (2,878 | ) |  | Other non-current liabilities
|  | December 31, 2019
|  | Notional |  |  | Fair |  |  |
|  | Amount |  |  | Value |  |  | Balance Sheet Location
Interest rate swap |  | $ | 25,000 |  |  | $ | 66 |  |  | Other current assets
Interest rate swaps |  | $ | 45,000 |  |  | $ | (591 | ) |  | Other non-current liabilities
The following table summarizes the effects of the interest rate swaps on the accompanying Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019 (in thousands):
|  | Loss Recognized in AOCL, net of tax |  |  | (Loss) Gain Reclassified from AOCL into Expense |
|  | Three Months Ended |  |  | Three Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Interest rate swap |  | $ | (136 | ) |  | $ | (194 | ) |  | $ | (293 | ) |  | $ | 98 |
|  | Nine Months Ended |  |  | Nine Months Ended |
|  | September 30, |  |  | September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Interest rate swap |  | $ | (1,796 | ) |  | $ | (1,351 | ) |  | $ | (676 | ) |  | $ | 371 |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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- References No definition available. + Details
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