Investments

3 Months Ended

Mar. 31, 2022

Investments, Debt and Equity Securities [Abstract]

6. INVESTMENTS

Debt Securities and Other Investments

The following debt securities and other investments were included on the Condensed Consolidated Balance Sheet and recorded at fair value:


	As of March 31, 2022
	Amortized		Gross Unrealized					Fair
(In thousands)	Cost		Gains		Losses			Value
Corporate bonds	$	9,299	$	1	$	(206	)	$	9,094
Municipal fixed-rate bonds		1,684		—		(37	)		1,647
Asset-backed bonds		318		—		(11	)		307
Mortgage/Agency-backed bonds		4,703		1		(142	)		4,562
U.S. government bonds		14,000		—		(446	)		13,554
Foreign government bonds		411		—		(17	)		394
Available-for-sale debt securities held at fair value	$	30,415	$	2	$	(859	)	$	29,558


	As of December 31, 2021
	Amortized		Gross Unrealized					Fair
(In thousands)	Cost		Gains		Losses			Value
Corporate bonds	$	10,776	$	6	$	(35	)	$	10,747
Municipal fixed-rate bonds		1,553		2		(4	)		1,551
Asset-backed bonds		322		3		(3	)		322
Mortgage/Agency-backed bonds		4,754		15		(33	)		4,736
U.S. government bonds		12,251		12		(92	)		12,171
Foreign government bonds		543		—		(4	)		539
Available-for-sale debt securities held at fair value	$	30,199	$	38	$	(171	)	$	30,066

The contractual maturities related to debt securities and other investments were as follows:


	As of March 31, 2022
(In thousands)	Corporate bonds		Municipal fixed-rate bonds		Asset- backed bonds		Mortgage/ Agency- backed bonds		U.S. government bonds		Foreign government bonds
Less than one year	$	295	$	269	$	—	$	1,050	$	979	$	—
One to two years		5,965		1,265		—		479		4,800		—
Two to three years		2,596		113		—		289		7,106		394
Three to five years		238		—		49		371		669		—
Five to ten years		—		—		—		915		—		—
More than ten years		—		—		258		1,458		—		—
Total	$	9,094	$	1,647	$	307	$	4,562	$	13,554	$	394

Actual maturities may differ from contractual maturities as some borrowers have the right to call or prepay obligations with or without call or prepayment penalties.

Realized gains and losses on sales of debt securities are computed under the specific identification method. The following table presents the gross realized gains and losses related to our debt securities:


	Three Months Ended
	March 31,
(In thousands)	2022			2021
Gross realized gain on debt securities	$	12		$	87
Gross realized loss on debt securities		(40	)		(16	)
Total (loss) gain recognized, net	$	(28	)	$	71

Income generated from available-for-sale debt securities was recorded as interest and dividend income in the Condensed Consolidated Statements of (Loss) Income. No allowance for credit losses was recorded for the three months ended March 31, 2022 and 2021 related to available-for-sale debt securities. The Company’s investment policy provides limitations for issuer concentration, which limits, at the time of purchase, the concentration in any one issuer to 5% of the market value of our total investment portfolio. The Company did not purchase any available-for-sale debt security with credit deterioration during the three months ended March 31, 2022.

Marketable Equity Securities

Our marketable equity securities consist of publicly traded stock, interests in funds and certain other investments measured at fair value or cost (where appropriate).

The Company has an equity investment which does not have a readily determinable fair value, and is recorded using the measurement alternative. Under the measurement alternative, equity investments that do not have a readily determinable fair value can be recorded at cost less impairment, if any, adjusted for observable price changes for an identical or similar investment. The carrying value of the equity investment as of March 31, 2022 and December 31, 2021 was $1.0 million. During the year ended December 31, 2021, impairment charges totaling $0.4 million, were recorded related to the equity investment. As of March 31 2022, cumulative impairment charges totaling $2.4 million were recorded related to the equity investment. There were no impairment charges during the three months ended March 31, 2022 and 2021. During the year ended December 31, 2021, an unsecured loan totaling $0.5 million was converted to equity which increased the Company's carrying value of the equity investment.

The Company has a secured note receivable as of March 31, 2022 and December 31, 2021 which totaled $0.4 million and is included in long term investments on the Consolidated Balance Sheets. During the year ended December 31, 2021, an impairment charge of $0.5 million was recognized against the secured note receivable. There were no impairment charges during the three months ended March 31, 2022 and 2021.

Realized and unrealized gains and losses related to marketable equity securities were as follows:


	Three Months Ended
	March 31,
(In thousands)	2022			2021
Realized (loss) gain on equity securities sold	$	(25	)	$	24
Unrealized (loss) gain on equity securities held		(3,362	)		901
Total (loss) gain recognized, net	$	(3,387	)	$	925

Income generated from marketable equity securities was recorded as interest and dividend income in the Condensed Consolidated Statements of (Loss) Income. U.S. GAAP establishes a three-level valuation hierarchy based upon observable and unobservable inputs for fair value measurement of financial instruments:

• Level 1 – Observable outputs; values based on unadjusted quoted prices for identical assets or liabilities in an active market;

• Level 2 – Significant inputs that are observable; values based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly;

• Level 3 – Significant unobservable inputs; values based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs could include information supplied by investees.

The Company’s cash equivalents and investments held at fair value are categorized into this hierarchy as follows:


			Fair Value Measurements as of March 31, 2022 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	457	$	457	$	—	$	—
Available-for-sale debt securities
Corporate bonds		9,094		—		9,094		—
Municipal fixed-rate bonds		1,647		—		1,647		—
Asset-backed bonds		307		—		307		—
Mortgage/Agency-backed bonds		4,562		—		4,562		—
U.S. government bonds		13,554		13,554				—
Foreign government securities		394		—		394		—
Marketable equity securities
Marketable equity securities – various industries		11,143		11,143		—		—
Deferred compensation plan assets		26,081		26,081		—		—
Total	$	67,239	$	51,235	$	16,004	$	—


			Fair Value Measurements as of December 31, 2021 Using
(In thousands)	Fair Value		Quoted Prices in Active Market for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents
Money market funds	$	652	$	652	$	—	$	—
Available-for-sale debt securities
Corporate bonds		10,747		—		10,747		—
Municipal fixed-rate bonds		1,551		—		1,551		—
Asset-backed bonds		322		—		322		—
Mortgage/Agency-backed bonds		4,736		—		4,736		—
U.S. government bonds		12,171		12,171		—		—
Foreign government bonds		539		—		539		—
Marketable equity securities
Marketable equity securities – various industries		12,606		12,606		—		—
Deferred compensation plan assets		26,935		26,935		—		—
Total	$	70,259	$	52,364	$	17,895	$	—

The fair value of our Level 2 securities is calculated using a weighted average market price for each security. Market prices are obtained from a variety of industry standard data providers, large financial institutions and other third-party sources. These multiple market prices are used as inputs into a distribution-curve-based algorithm to determine the daily market value of each security.

The fair value of Level 3 securities is calculated based on unobservable inputs. Quantitative information with respect to unobservable inputs consists of third-party valuations performed in accordance with ASC 820 – Fair Value Measurement. Inputs used in preparing the third-party valuation included the following assumptions, among others: estimated discount rates and fair market yields.