Marcus & Millichap, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Investments in Marketable Securities

Investments in Marketable Securities

9 Months Ended

Sep. 30, 2018

Investments, Debt and Equity Securities [Abstract]

6.	Investments in Marketable Securities

Amortized cost and fair value of marketable securities, available-for-sale, by type of security consisted of the following (in thousands):


	September 30, 2018									December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term investments:
U.S. treasuries	$	106,291	$	—	$	(150	)	$	106,141	$	57,712	$	—	$	(88	)	$	57,624
U.S. government sponsored entities		3,502		—		(17	)		3,485		7,016		—		(8	)		7,008
Corporate debt securities		10,988		—		(13	)		10,975		8,931		—		(3	)		8,928
Asset-backed securities and other		100		—		—			100		—		—		—			—

	$	120,881	$	—	$	(180	)	$	120,701	$	73,659	$	—	$	(99	)	$	73,560

Long-term investments:
U.S. treasuries	$	52,865	$	—	$	(343	)	$	52,522	$	18,111	$	7	$	(164	)	$	17,954
U.S. government sponsored entities		1,603		—		(83	)		1,520		5,306		—		(62	)		5,244
Corporate debt securities		25,374		4		(471	)		24,907		22,505		268		(54	)		22,719
Asset-backed securities and other		6,252		1		(67	)		6,186		6,180		17		(15	)		6,182

	$	86,094	$	5	$	(964	)	$	85,135	$	52,102	$	292	$	(295	)	$	52,099

The amortized cost and fair value of the Company’s investments in available-for-sale securities that have been in a continuous unrealized loss position consisted of the following (in thousands):


	September 30, 2018					December 31, 2017
	Unrealized Loss			Fair Value		Unrealized Loss			Fair Value
Less than 12 months	$	(730	)	$	187,177	$	(158	)	$	63,229

12 months or longer	$	(414	)	$	17,099	$	(236	)	$	44,961

Gross realized gains and gross realized losses from the sales of the Company’s available-for-sale securities consisted of the following (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Gross realized gains ⁽¹⁾	$	—	$	1	$	12	$	2

Gross realized losses ⁽¹⁾	$	—	$	—	$	—	$	—

⁽¹⁾	Recorded in other income (expense), net in the condensed consolidated statements of net and comprehensive income. The cost basis of securities sold were determined based on the specific identification method.

As of September 30, 2018, the Company considers the declines in market value of its marketable securities, available-for-sale to be temporary in nature and does not consider any of its investments other-than-temporarily impaired. The Company typically invests in highly-rated securities, and its investment policy generally limits the amount of credit exposure to any one issuer. The policy generally requires investments to be investment grade, with the primary objective of minimizing the potential risk of principal loss and matching long-term liabilities. When evaluating an investment for other-than-temporary impairment the Company reviews factors such as the length of time and extent to which fair value has been below its cost basis, the financial condition of the issuer and any changes thereto, changes in market interest rates and the Company’s intent to sell, or whether it is more likely than not that it will be required to sell the investment before recovery of the investment’s cost basis. The Company has no current intent to sell, and it is not more likely than not that the Company will be required to sell these investments before recovery of their amortized cost basis, which may be at maturity. The Company may sell certain of its marketable securities, available-for-sale prior to their stated maturities for strategic reasons including, but not limited to, anticipated liquidity and capital requirements, anticipated credit deterioration, duration management or when a security no longer meets the criteria of the Company’s investment policy.

Amortized cost and fair value of marketable securities, available-for-sale, by contractual maturity consisted of the following (in thousands):


	September 30, 2018				December 31, 2017
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	120,881	$	120,701	$	73,659	$	73,560
Due after one year through five years		63,511		63,236		30,644		30,517
Due after five years through ten years		16,451		15,955		15,090		15,200
Due after ten years		6,132		5,944		6,368		6,382

	$	206,975	$	205,836	$	125,761	$	125,659

Weighted average contractual maturity		2.0 years				2.6 years

Actual maturities may differ from contractual maturities because certain borrowers have the right to prepay certain obligations with or without prepayment penalties.