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Note 7 - Financial Instruments

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Financial Instruments Disclosure [Text Block]

7. FINANCIAL INSTRUMENTS

Investments—Trading

Investments-trading consisted of the following.

INVESTMENTS - TRADING

(Dollars in Thousands)

		June 30, 2024				December 31, 2023
Certificates of deposit		$	216			$	-
Corporate bonds and redeemable preferred stock			48,197				53,657
Derivatives			1,438				7,470
Equity securities			930				928
Municipal bonds			17,169				20,572
Residential mortgage loans			1,542				3,113
RMBS			7				9
U.S. government agency debt securities			10,678				6,567
U.S. government agency MBS and CMOs			42,547				88,000
U.S. Treasury securities			255				1,012
Investments-trading		$	122,979			$	181,328

Substantially all of the Company's investments-trading serve as collateral for the Company's margin loan payable. See note 6.

Trading Securities Sold, Not Yet Purchased

Trading securities sold, not yet purchased consisted of the following.

TRADING SECURITIES SOLD, NOT YET PURCHASED

(Dollars in Thousands)

		June 30, 2024				December 31, 2023
Corporate bonds and redeemable preferred stock		$	22,673			$	24,355
Derivatives			438				6,719
Equity securities			67				393
U.S. government agency debt securities			1				-
U.S. government agency MBS and CMOs			95				-
U.S. Treasury securities			24,445				34,284
Trading securities sold, not yet purchased		$	47,719			$	65,751

The Company manages its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. See note 5 for realized and unrealized gains recognized on investments-trading.

Other Investments, at Fair Value

Other investments, at fair value consisted of the following.

OTHER INVESTMENTS, AT FAIR VALUE

(Dollars in Thousands)

		June 30, 2024				December 31, 2023
Equity securities		$	8,372			$	38,038
Equity derivatives			876				1,447
Restricted equity securities			10,893				2,054
Corporate bonds and redeemable preferred stock			519				506
Fair value receivables			8,821				9,541
Interests in SPVs			2,629				12,609
CREO JV			5,086				4,783
U.S. Insurance JV			2,851				3,107
Residential mortgage loans			284				132
Other investments, at fair value		$	40,331			$	72,217

As of June 30, 2024, $2,284 of equity securities, $804 of equity derivatives, and $2,538 of the fair value receivables represented long positions related to share forward arrangements ("SFAs") entered into by the Company. As of December 31, 2023, $26,079 of unrestricted equity securities, $1,447 of equity derivatives, and $6,278 of the fair value receivables represented long positions related to SFAs entered into by the Company. See note 9.

Fair value receivables represent receivables (including receivables that are convertible into equity shares) from various counterparties in connection with the Company's advisory and SFA business. These receivables are carried at fair value.

Interests in SPVs represents consideration the Company has received for services provided by CCM, rather than cash. The SPVs hold convertible notes receivable interests in the counterparties. The Company does not consolidate the SPVs and carries its interests in the SPVs at fair value. See note 9 for discussion of the determination of fair value.

A total of $821 and $946 of the amounts shown as other investments, at fair value above served as collateral for the Company's margin loan payable as of June 30, 2024 and December 31, 2023, respectively. See note 6.

Other Investments Sold, Not Yet Purchased, at Fair Value

Other investments sold, not yet purchased, at fair value consisted of the following.

OTHER INVESTMENTS SOLD, NOT YET PURCHASED, AT FAIR VALUE

(Dollars in Thousands)

		June 30, 2024				December 31, 2023
Equity securities		$	580			$	97
Share forward liabilities			7,010				24,645
Other investments sold, not yet purchased, at fair value		$	7,590			$	24,742

Share forward liabilities represent derivative positions related to SFAs entered into by the Company. See description of SFAs in note 9.