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, 2017

Investments, Debt and Equity Securities [Abstract]

4.	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, 2017									December 31, 2016
	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	$	65,457	$	—	$	(92	)	$	65,365	$	24,987	$	—	$	(30	)	$	24,957
U.S. government sponsored entities		7,034		—		(8	)		7,026		2,497		—		—			2,497
Corporate debt securities		10,422		—		—			10,422		—		—		—			—

	$	82,913	$	—	$	(100	)	$	82,813	$	27,484	$	—	$	(30	)	$	27,454

Long-term investments:
U.S. treasuries	$	10,062	$	12	$	(99	)	$	9,975	$	40,865	$	—	$	(229	)	$	40,636
U.S. government sponsored entities		5,372		—		(45	)		5,327		12,618		—		(58	)		12,560
Corporate debt securities		22,503		358		(29	)		22,832		17,841		74		(165	)		17,750
Asset-backed securities and other		7,281		39		(10	)		7,310		6,557		18		(46	)		6,529

	$	45,218	$	409	$	(183	)	$	45,444	$	77,881	$	92	$	(498	)	$	77,475

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


	September 30, 2017					December 31, 2016
	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
Less than 12 months	$	(172	)	$	72,509	$	(491	)	$	86,105

12 months or longer	$	(111	)	$	21,354	$	(37	)	$	721

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Gross realized gains ⁽¹⁾	$	1	$	16	$	2	$	36

Gross realized losses ⁽¹⁾	$	—	$	—	$	—	$	(155	)

⁽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 on the specific identification method.

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 capital requirements, anticipated credit deterioration, duration management or when a security no longer meets the criteria of the Company’s investment policy.

As of September 30, 2017, 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 it will be required to sell the investment before recovery of the investment’s cost basis.

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


	September 30, 2017				December 31, 2016
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due in one year or less	$	82,913	$	82,813	$	27,484	$	27,454
Due after one year through five years		23,572		23,556		57,309		57,144
Due after five years through ten years		15,166		15,370		14,992		14,841
Due after ten years		6,480		6,518		5,580		5,490

	$	128,131	$	128,257	$	105,365	$	104,929

Weighted average contractual maturity		2.6 years				3.5 years

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