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Note 8 - Investments, Including Investments Accounted for Using the Equity Method | 9 Months Ended
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Sep. 30, 2019
Notes to Financial Statements |
Investment [Text Block] | NOTE 8. I NVESTMENTS , INCLUDING INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD Short-term Investments Short-term investments consist of certificates of deposit, U.S. Treasury securities, and a corporate bond and are primarily held by UCS . All short-term investments are classified as held to maturity and mature in less than twelve months. The certificates of deposit are carried at cost. For the nine months ended September 30, 2019 , gains on redemptions of U.S. Treasury notes held to maturity were $1,935.
|  | September 30, |  |  | December 31, |
|  | 2019 |  |  | 2018 |
Certificates of deposit |  | $ | 1,158,928 |  |  | $ | 1,378,666 |
U.S. Treasury notes and corporate bond |  |  | 5,212,991 |  |  |  | 4,872,398 |
Total |  | $ | 6,371,919 |  |  | $ | 6,251,064 |
Marketable Equity Securities During the nine months ended September 30, 2019 , we began investing in marketable equity securities. Our marketable equity securities are publicly traded stocks measured at fair value using quoted prices for identical assets in active markets and classified as Level 1 within the fair value hierarchy. Our marketable equity securities are held by UCS and Boston Omaha. Marketable equity securities as of September 30, 2019 are as follows:
|  |  |  |  |  | Gross |  |  |  |  |
|  |  |  |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gain (Loss) |  |  | Value |
Marketable equity securities, September 30, 2019 |  | $ | 49,941,567 |  |  | $ | 2,925,116 |  |  | $ | 52,866,683 |
U.S. Treasury Securities Available for Sale We classify our investments in debt securities that we intend to hold for indefinite periods of time as “available for sale.” Our securities available for sale are carried at fair value in the balance sheet. Because we have elected the fair value option for these securities, unrealized holding gains and losses during the period are included in earnings. Interest income is recognized at the coupon rate. Securities available for sale are as follows:
|  |  |  |  |  | Gross |  |  |  |  |
|  |  |  |  |  | Unrealized |  |  | Fair |
|  | Cost |  |  | Gain (Loss) |  |  | Value |
U.S. Treasury notes, September 30, 2019 |  | $ | 75,156,283 |  |  | $ | (61,056 | ) |  | $ | 75,095,227 |
U.S. Treasury notes, December 31, 2018 |  | $ | 86,728,590 |  |  | $ | 116,796 |  |  | $ | 86,845,386 |
Long-term Investments Long-term investments consist of certificates of deposit having maturity dates in excess of twelve months, U.S. Treasury securities, and certain equity investments. The certificates of deposit and U.S. Treasury securities have maturity dates ranging from 2020 through 2023. We have the intent and the ability to hold the certificates of deposit and U.S. Treasury securities to maturity. Certificates of deposit and U.S. Treasury securities are stated at carrying value which approximates fair value and are held by UCS. Long-term investments consist of the following:
|  | September 30, |  |  | December 31, |
|  | 2019 |  |  | 2018 |
U.S. Treasury securities, held to maturity |  | $ | 1,474,937 |  |  | $ | 2,902,004 |
Certificates of deposit |  |  | 687,779 |  |  |  | 317,178 |
Preferred stock |  |  | 104,019 |  |  |  | 104,019 |
Non-voting preferred units of Dream Finders Holdings, LLC |  |  | 12,000,000 |  |  |  | - |
Non-voting common units of Dream Finders Holdings, LLC |  |  | 10,000,000 |  |  |  | 10,000,000 |
Voting common stock of CB&T Holding Corporation |  |  | 19,058,485 |  |  |  | 19,058,485 |
Total |  | $ | 43,325,220 |  |  | $ | 32,381,686 |
Equity Investments On May 31, 2018, we invested $19,058,485 in voting common stock of CB&T Holding Corporation, which we refer to as “CB&T,” the privately held parent company of Crescent Bank & Trust. Our investment represents 14.99% of CB&T’s outstanding common stock. CB&T is a closely held corporation, whose majority ownership rests with one family. In late December 2017, we invested $10 million in non-voting common units of Dream Finders Holdings LLC, which we refer to as “DFH”, the parent company of Dream Finders Homes, LLC, a national home builder with operations in Florida, Texas, Georgia, Colorado and the greater northern Virginia and Maryland areas. Our non-voting common units investment represents an approximately 5% ownership stake in the company. In May 2019, our subsidiary BOC DFH, LLC invested an additional $12 million in DFH through the purchase of preferred units. DFH is required to pay to us a mandatory preferred return of at least 14% per annum on such preferred units and 25% of our preferred units are convertible, at our option, into non-voting common units after May 29, 2020 and the remaining preferred units are convertible, at our option, into non-voting common units after May 29, 2021. The mandatory 14% preferred return increases if the preferred units purchased are not redeemed or converted within one year of purchase. Also, we obtain additional beneficial conversion terms if the preferred units are not redeemed by May 29, 2021. During January 2018, we exchanged our convertible note receivable from Breezeway Homes, Inc., which we refer to as “Breezeway,” for 31,227 shares of preferred stock. The preferred stock is noncumulative and has a dividend rate of $.2665 per share, should dividends be declared. The preferred stock has one vote per share and is convertible into whole shares of common stock, determined according to the conversion formula contained in Breezeway’s amended and restated articles of incorporation. In addition, our investment provides us with a multi-year right to sell insurance and/or warranty products through Breezeway's software platform to its customers. We reviewed our investments as of September 30, 2019 and concluded that no impairment to the carrying value was required. Investment in Unconsolidated Affiliates We have various investments in equity method affiliates, whose businesses are in real estate, real estate services, and asset management. Our interest in these affiliates ranges from 7.15% to 30%. Two of the investments in affiliates, Logic Real Estate Companies, LLC and 24 th Street Holding Company, LLC, having a combined carrying amount of $614,593 on September 30, 2019 , are managed by a member of our board of directors. The following table is a reconciliation of our investments in equity affiliates as presented in investments in unconsolidated affiliates on our consolidated balance sheets:
|  | September 30, |  |  | December 31, |
|  | 2019 |  |  | 2018 |
Beginning of period |  | $ | 568,713 |  |  | $ | 952,128 |
Additional investment in unconsolidated affiliate |  |  | 225,978 |  |  |  | 40,399 |
Distributions received |  |  | (503,431 | ) |  |  | (816,201 | )
Loss on investment in affiliate |  |  | - |  |  |  | (107,630 | )
Equity in income of unconsolidated affiliates |  |  | 323,333 |  |  |  | 500,017 |
End of period |  | $ | 614,593 |  |  | $ | 568,713 |
The loss on investment in affiliate is related to the wind-down of TAG SW 1, LLC, which occurred during 2018 .

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