8. Fair Value Measurements

 

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

The tables below present, by level within the fair value hierarchy, financial assets and liabilities measured at fair value on a recurring basis for the periods indicated. As required by Topic 820, financial assets and financial liabilities are classified in their entirety based on the lowest level of input that is significant to the respective fair value measurement.

 

   As of December 31, 2025 
   Level 1   Level 2   Level 3   Total 
Assets                
Cash and securities segregated for regulatory purposes                
U.S. government securities  $34,601,000   $
   $
    —
   $34,601,000 
                     
Securities owned, at fair value                    
U.S. government securities  $16,654,000   $
   $
   $16,654,000 
Certificates of deposit   
    113,000    
    113,000 
Equity securities   3,001,000    94,000    
    3,095,000 
Total Securities owned, at fair value  $19,655,000   $207,000   $
   $19,862,000 
                     
Liabilities                    
Securities sold, not yet purchased, at fair value                    
Equity securities  $150,000   $
   $
   $150,000 
Corporate bonds   
    1,000    
    1,000 
Options   68,000    
    
    68,000 
Total Securities sold, not yet purchased, at fair value  $218,000   $1,000   $
   $219,000 

 

   As of December 31, 2024 
   Level 1   Level 2   Level 3   Total 
Assets                
Cash and securities segregated for regulatory purposes                    
U.S. government securities  $68,758,000   $
   $
    —
   $68,758,000 
                     
Securities owned, at fair value                    
U.S. government securities  $20,086,000   $
   $
   $20,086,000 
Certificates of deposit   
    112,000    
    112,000 
Corporate bonds   
    2,000    
    2,000 
Options   58,000    
    
    58,000 
Equity securities   1,055,000    72,000    
    1,127,000 
Total Securities owned, at fair value  $21,199,000   $186,000   $
   $21,385,000 
                     
Liabilities                    
Securities sold, not yet purchased, at fair value                    
Equity securities  $1,000   $
   $
   $1,000 
Options   25,000              25,000 
Total Securities sold, not yet purchased, at fair value  $26,000   $
   $
   $26,000 

The Company had U.S. government securities with the market values and maturity dates for the periods indicated below:

 

   As of December 31, 2025 
Maturing in 2026  $44,135,000 
Maturing in 2027   7,028,000 
Accrued interest   92,000 
Total Market value  $51,255,000 

 

   As of December 31, 2024 
Maturing in 2025  $80,739,000 
Maturing in 2026   8,019,000 
Accrued interest   86,000 
Total Market value  $88,844,000 

 

Financial Assets and Liabilities Not Carried at Fair Value

 

Financial assets and liabilities not measured at fair value are recorded at carrying value, which approximates fair value either due to their short-term nature, or in the case of long-term assets or liabilities, management has determined the difference in the carrying value and fair value is immaterial. The tables below represents financial instruments in which the ending balances as of December 31, 2025 and 2024 are not carried at fair value in the statements of financial condition:

 

   As of December 31, 2025 
   Carrying Value   Fair Value   Level 1   Level 2   Level 3 
Financial assets, not measured at fair value                    
Cash and cash equivalents  $22,408,000   $22,408,000   $22,408,000   $
   $
    —
 
Cash – segregated for regulatory purposes   151,007,000    151,007,000    151,007,000    
    
 
Securities borrowed   408,495,000    408,495,000    
    408,495,000    
 
Receivables from customers   73,465,000    73,465,000    
    73,465,000    
 
Receivables from non-customers   1,773,000    1,773,000    
    1,773,000    
 
Receivables from broker-dealers and clearing organizations   6,801,000    6,801,000    
    6,801,000    
 
Other receivables   4,522,000    4,522,000    
    4,522,000    
 
Deposits with broker-dealers and clearing organizations   5,503,000    5,503,000    
    5,503,000    
 
Total financial assets, not measured at fair value  $673,974,000   $673,974,000   $173,415,000   $500,559,000   $
 
                          
Financial liabilities, not measured at fair value                         
Securities loaned  $407,258,000   $407,258,000   $
   $407,258,000   $
 
Payables to customers   237,193,000    237,193,000    
    237,193,000    
 
Payables to non-customers   7,000    7,000    
    7,000    
 
Drafts payable   2,829,000    2,829,000    
    2,829,000    
 
Payables to broker-dealers and clearing organizations   769,000    769,000    
    769,000    
 
Debt   9,139,000    9,139,000    
    9,139,000    
 
Contract termination liability   819,000    819,000    
    819,000    
 
Total financial liabilities, not measured at fair value  $658,014,000   $658,014,000   $
   $658,014,000   $
 
   As of December 31, 2024 
   Carrying Value   Fair Value   Level 1   Level 2   Level 3 
Financial assets, not measured at fair value                    
Cash and cash equivalents  $32,629,000   $32,629,000   $32,629,000   $
   $
    —
 
Cash – segregated for regulatory purposes   135,829,000    135,829,000    135,829,000    
    
 
Securities borrowed   139,040,000    139,040,000    
    139,040,000    
 
Receivables from customers   84,367,000    84,367,000    
    84,367,000    
 
Receivables from non-customers   607,000    607,000    
    607,000    
 
Receivables from broker-dealers and clearing organizations   3,920,000    3,920,000    
    3,920,000    
 
Other receivables   2,744,000    2,744,000    
    2,744,000    
 
Deposits with broker-dealers and clearing organizations   4,227,000    4,227,000    
    4,227,000    
 
Total financial assets, not measured at fair value  $403,363,000   $403,363,000   $168,458,000   $234,905,000   $
 
                          
Financial liabilities, not measured at fair value                         
Securities loaned  $184,962,000   $184,962,000   $
   $184,962,000   $
 
Payables to customers   227,129,000    227,129,000    
    227,129,000    
 
Payables to non-customers   3,297,000    3,297,000    
    3,297,000    
 
Drafts payable   1,331,000    1,331,000    
    1,331,000    
 
Payables to broker-dealers and clearing organizations   444,000    444,000    
    444,000    
 
Long-term debt   4,228,000    4,228,000    
    4,228,000    
 
Contract termination liability   2,567,000    2,567,000    
    2,567,000    
 
Total financial liabilities, not measured at fair value  $ 423,958,000   $ 423,958,000   $
   $ 423,958,000   $
 

Historical Timeline

Fiscal YearFiled
2025Mar 30, 2026Showing above
2024Mar 31, 2025
2023May 10, 2024
2022Mar 29, 2023
2021Mar 30, 2022
2020Mar 10, 2021
2019Mar 27, 2020

About Fair Value Disclosures

Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.

Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.