Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement

v3.23.3
Fair Value Measurement
9 Months Ended
Sep. 30, 2023
Fair Value Measurement  
Fair Value Measurement

3.    Fair Value Measurement

The fair value measurement level within the fair value hierarchy of an asset or liability is based on the lowest level of any input that is significant to the fair market value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following table sets forth by Level, within the fair value hierarchy, the Company’s assets at fair value as of September 30, 2023:

    

Level 1

    

Level 2

    

Level 3

    

Total

Stocks and ETFs

$

$

1,932,270

$

$

1,932,270

Mutual funds

15,599,486

15,599,486

Debt securities

18,699,251

 

813,650

 

19,512,901

Total liquid investments

$

34,298,737

$

2,745,920

$

$

37,044,657

Real estate owned

$

$

$

3,481,177

$

3,481,177

The following table sets forth by Level, within the fair value hierarchy, the Company’s assets at fair value as of December 31, 2022:

    

Level 1

    

Level 2

    

Level 3

    

Total

Stocks and ETF’s

$

3,282,659

$

1,446,065

 

$

$

4,728,724

Mutual funds

 

14,850,839

 

 

 

14,850,839

Debt securities

 

3,880,045

 

1,116,854

 

 

4,996,899

Total liquid investments

$

22,013,543

$

2,562,919

 

$

$

24,576,462

Real estate owned

 

 

$

5,216,149

$

5,216,149

Following is a description of the methodologies used for assets measured at fair value:

Stocks and ETFs (level 1 and 2): Valued at the closing price reported in the active market in which the individual securities are traded.

Mutual funds (level 1 and 2): Valued at the daily closing price reported by the fund. Mutual funds held by the Company are open-end mutual funds that are registered with the U.S. Securities and Exchange Commission. These funds are required to publish their daily net asset values and to transact at that price. The mutual funds held by the Company are deemed to be actively traded.

Debt securities (level 2): Valued at the closing price reported in the active market in which the individual securities are traded.

Real estate owned (level 3): The Company estimates fair values of real estate owned using market information such as recent sales contracts, appraisals, recent sales, assessed values or discounted cash value models.

See Note 6 for the roll forward of real estate owned – Level 3 assets.

Impact of Fair Value of AFS Securities on OCI

The carrying value of the Company’s financial instruments approximates fair value generally due to the relative short-term nature of such instruments. Other financial assets and financial liabilities have fair value that approximate their carrying value.

Pursuant to ASC 326-30-50-4 and 50-5, the Company is required to disclose investment securities that have been in a continuous unrealized loss position for 12 months or more as of the balance sheet date. As of September 30, 2023 and December 31, 2022, the Company had a continuous unrealized losses over 12 months in Available-For-Sale debt securities (AFS’s) of approximately $834,000 and approximately $531,000, respectively. The Company reviewed several factors to assess the credit quality of the debt instruments including, but not limited to, current cash position, operating cash flow, and corporate earnings as of the most recently filed financial statements. As such, as of September 30, 2023, the Company has concluded no such allowance for credit losses regarding AFS’s debt securities was deemed necessary.

The following table presents the impact of the Company’s AFS’s - debt securities included in Other Comprehensive Income (OCI) for the three and nine months ended September 30, 2023:

Three Months Ended

Nine months Ended

September 30, 

September 30, 

2023

2022

2023

2022

OCI from AFS securities:

    

  

    

  

    

  

    

  

Unrealized (losses) on AFS securities at beginning of period

$

(376,078)

$

(425,972)

$

(561,490)

$

(476,016)

Unrealized gain (losses) on securities available-for-sale – debt securities

 

(83,606)

 

(131,569)

 

101,806

 

(81,525)

Change in OCI from AFS securities

 

(83,606)

 

(131,569)

 

101,806

 

(81,525)

Balance at end of period

$

(459,684)

$

(557,541)

$

(459,684)

$

(557,541)

The following table presents the Company’s Level 3 Investments of Real Estate Owned as of September 30, 2023 and December 31, 2022:

    

Nine Months Ended

    

Twelve Months Ended

September 30, 2023

December, 31, 2022

Real Estate Owned at the beginning of period

$

5,216,149

$

6,559,010

Principal basis transferred to Real Estate Owned

 

1,186,663

 

1,376,733

Charges and/or improvements

 

214,642

 

126,443

Proceeds from sale of Real Estate Owned

 

(2,636,410)

 

(2,090,880)

Impairment

 

(612,500)

 

(799,909)

Gain on sale of Real Estate Owned

 

112,633

 

44,752

Balance at end of period

$

3,481,177

$

5,216,149