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Marketable Securities
 3 Months Ended
Mar. 31, 2012
Marketable Securities [Abstract]  
MARKETABLE SECURITIES

(2) MARKETABLE SECURITIES

Marketable securities consist of U.S. Treasury notes and bonds, U.S. Government Agency notes and bonds and bank guaranteed variable rate demand notes (VRDN). At the time of purchase, we classify our marketable securities as either trading securities or available-for-sale securities, depending on the intent at that time. As of March 31, 2012, the marketable securities were comprised solely of trading securities. Trading securities are carried at fair value with unrealized gains and losses recognized as a component of interest income in the condensed consolidated statements of income. The fair values of marketable securities at March 31, 2012 were determined based on valuations provided by a third-party pricing service, as derived from such services’ pricing models, and are considered Level 1 and Level 2 measurements, depending on the nature of the investment. Level 1 valuations are based on quoted prices in active markets that are accessible at the measure date for identical assets or liabilities. Level 2 valuations are based on observable market-based inputs other than quoted prices in active markets for identical assets. The level of management judgment required in establishing fair value for Level 1 investments is minimal. Similarly, there is little subjectivity or judgment required for Level 2 investments that are valued using valuation models that are standard across the industry and where all parameter inputs are quoted in active markets. Inputs to the models may include, but are not limited to, reported trades, executable bid and ask prices, broker/dealer quotations, prices or yields of securities with similar characteristics, benchmark curves or information pertaining to the issuer, as well as industry and economic events.

The following table summarizes the fair value of our marketable securities, by type, as of March 31, 2012 based on the categories described above:

 

                         
    Level 1     Level 2     Total  

U.S. Treasury notes and bonds

   $ 1,995,383     $ —       $ 1,995,383  

Mortgage-backed securities – variable rate

     1,560,266       1,659,451       3,219,717  

Agency notes and bonds – fixed rate

     995,659       —         995,659  

SBA loan pools – variable rate

     —         1,095,863       1,095,863  

Municipal bonds – VRDN

     8,695,000       —         8,695,000  
   

 

 

    

 

 

    

 

 

  
    $ 13,246,308     $ 2,755,314     $ 16,001,622