Fair Value Measurements
 12 Months Ended
Jan. 30, 2016
Fair Value Measurements  
Fair Value Measurements

 

(4)Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market at the measurement date. Fair value is established according to a hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

 

Level 1:  Unadjusted quoted prices in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

 

Level 2:  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

 

Level 3:  Unobservable inputs are used when little or no market data is available. Level 3 inputs are given the lowest priority in the fair value hierarchy.

 

As of January 30, 2016, the Company’s investment securities are classified as held-to-maturity since the Company has the intent and ability to hold the investments to maturity.  Such securities are carried at amortized cost plus accrued interest and consist of the following (in thousands):

 

 

 

Amortized 
Cost

 

Gross 
Unrealized 
Gains

 

Gross
Unrealized
Losses

 

Fair Market
Value

 

Short-term:

 

 

 

 

 

 

 

 

 

Bank certificates of deposit (Level 2)

 

$
20,978

 

$

—

 

$

—

 

$
20,978

 

Obligations of states and municipalities (Level 2)

 
2,930

 
2

 

—

 
2,932

 

Obligations of the U. S. Treasury (Level 1)

 
8,763

 
3

 
(1

)
8,765

 

 

 

 

 

 

 

 

 

 

 

 

 

$
32,671

 

$
5

 

$
(1

)

$
32,675

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term:

 

 

 

 

 

 

 

 

 

Obligations of the U. S. Treasury (Level 1)

 

$
20,002

 

$
33

 

$
(7

)

$
20,028

 

Bank certificates of deposit (Level 2)

 
10,888

 

—

 

—

 
10,888

 

 

 

 

 

 

 

 

 

 

 

 

 

$
30,890

 

$
33

 

$
(7

)

$
30,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The amortized cost and fair market value of investment securities as of January 30, 2016 by contractual maturity are as follows (in thousands):

 

 

 

Amortized
Cost

 

Fair 
Market
Value

 

Mature in one year or less

 

$
32,671 

 

$
32,675 

 

Mature after one year through five years

 
30,890 

 
30,916 

 

 

 

 

 

 

 

 

 

$
63,561 

 

$
63,591 

 

 

 

 

 

 

 

 

 

 

As of January 31, 2015, the Company’s investment securities were classified as held-to-maturity and consisted of the following (in thousands):

 

 

 

Amortized 
Cost

 

Gross
Unrealized
Gains

 

Gross
Unrealized 
Losses

 

Fair Market
Value

 

Short-term:

 

 

 

 

 

 

 

 

 

Bank certificates of deposit (Level 2)

 
4,996 

 

$

—

 

$

—

 

$
4,996 

 

Obligations of states and municipalities (Level 2)

 
2,074 

 

—

 

—

 
2,074 

 

Obligations of the U. S. Treasury (Level 1)

 
8,780 

 
9 

 

—

 
8,789 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
15,850 

 

$
9 

 

$

—

 

$
15,859 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term:

 

 

 

 

 

 

 

 

 

Obligations of the U. S. Treasury (Level 1)

 

$
7,543 

 

$
24 

 

$

—

 

$
7,567 

 

Bank certificates of deposit (Level 2)

 
14,904 

 

—

 

—

 
14,904 

 

 

 

 

 

 

 

 

 

 

 

 

 

$
22,447 

 

$
24 

 

$

—

 

$
22,471 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The amortized cost and fair market value of investment securities as of January 31, 2015 by contractual maturity were as follows (in thousands):

 

 

 

Amortized
Cost

 

Fair 
Market 
Value

 

Mature in one year or less

 

$
15,850 

 

$
15,859 

 

Mature after one year through five years

 
22,447 

 
22,471 

 

 

 

 

 

 

 

 

 

$
38,297 

 

$
38,330 

 

 

 

 

 

 

 

 

 

 

There were no changes among the levels in the three fiscal years ended January 30, 2016.

 

Fair market values of Level 2 investments are determined by management with the assistance of a third party pricing service.  Since quoted prices in active markets for identical assets are not available, these prices are determined by the third party pricing service using observable market information such as quotes from less active markets and quoted prices of similar securities.