NOTE D: MARKETABLE EQUITY SECURITIES

The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in Non-operating income.

Marketable equity securities are carried at fair value, with gains and losses in fair market value included in the determination of net income. The fair value of marketable equity securities is determined based on quoted market prices in active markets, as described in Note J below.

The following table sets forth market value, cost, and unrealized gains on equity securities as of

September 30, 2019

and

December 31, 2018.

	September 30, 2019		December 31, 2018
	(in thousands)
Fair market value	$	28,759	$	27,549
Cost		25,198		25,602
Unrealized gain	$	3,561	$	1,947

The following table sets forth the gross unrealized gains and losses on the Company’s marketable securities as of

September 30, 2019

and

December 31, 2018.

	September 30, 2019		December 31, 2018
	(in thousands)
Gross unrealized gains	$	7,023	$	5,668
Gross unrealized losses		3,462		3,721
Net unrealized gains	$	3,561	$	1,947

The following table shows the Company’s net realized gains during the

three

and

nine

months ending on

September 30

2019

and

2018,

respectively, on certain marketable equity securities.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2019		2018		2019		2018
	(in thousands, except per share data)
Sales proceeds	$	883	$	-	$	1,645	$	-
Cost of securities sold		557		-		805		-
Realized gain	$	326	$	-	$	840	$	-

Realized gain, net of taxes	$	252	$	-	$	651	$	-

For the quarter ended

September 30, 2019,

the Company recognized dividends received of approximately

$348,000

in non-operating income in its statements of operations. For the quarter ended

September 30, 2018,

the Company recognized dividends received of approximately

$308,000

in non-operating income in its statements of operations.

For the

nine

months ended

September 30, 2019,

the Company recognized dividends received of approximately

$931,000

in non-operating income in its statements of operations. For the

nine

months ended

September 30, 2018,

the Company recognized dividends received of approximately

$780,000

in non-operating income in its statements of operations.

The market value of the Company’s equity securities are periodically used as collateral against any outstanding margin account borrowings. As of

September 30, 2019

and

December 31, 2018,

the Company had outstanding borrowings of approximately

$8,992,000

and

$11,281,000,

respectively, under its margin account. Margin account borrowings are used for the purchase of marketable equity securities and as a source of short-term liquidity and are included in Accrued expenses and other liabilities on our balance sheets.

Our marketable equity securities portfolio had a net unrealized pre-tax gain in market value of approximately

$133,000

during the

third

quarter of

2019,

and a net unrealized pre-tax gain in market value of approximately

$586,000

during the

third

quarter of

2018,

which were reported as Non-operating income for the respective periods.