Barrett Business Services, Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Fair Value Measurement (Tables)

Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2020

Summary of Investments Measured at Fair Value on Recurring Basis

The following table summarizes the Company’s investments at September 30, 2020 and December 31, 2019 measured at fair value on a recurring basis (in thousands):

	September 30, 2020							December 31, 2019
			Gross							Gross
			Unrealized							Unrealized
			Gains			Recorded				Gains			Recorded
	Cost		(Losses)			Basis		Cost		(Losses)			Basis
Current:
Cash equivalents:
Money market funds	$	32,723	$	—		$	32,723	$	35,526	$	—		$	35,526
Discount notes		9,998		1			9,999		—		—			—
Total cash equivalents		42,721		1			42,722		35,526		—			35,526
Investments:
Corporate bonds		36,732		558			37,290		53,493		156			53,649
Asset backed securities		36,950		(330	)		36,620		14,017		(13	)		14,004
U.S. government agency securities		7,399		791			8,190		7,408		282			7,690
Mortgage backed securities		4,465		13			4,478		2,737		1			2,738
U.S. treasuries		100		1			101		4,500		9			4,509
Total investments		85,646		1,033			86,679		82,155		435			82,590
Restricted cash and investments ⁽¹⁾:
Corporate bonds		95,881		4,461			100,342		98,481		1,931			100,412
Mortgage backed securities		52,650		2,481			55,131		62,930		837			63,767
Money market funds		32,879		3			32,882		29,046		—			29,046
U.S. government agency securities		25,697		2,514			28,211		27,885		642			28,527
Commercial paper		5,998		1			5,999		—		—			—
Supranational bonds		4,773		29			4,802		4,770		30			4,800
U.S. treasuries		4,760		31			4,791		16,906		21			16,927
Mutual funds		4,712		—			4,712		3,466		—			3,466
Municipal bonds		4,062		14			4,076		—		—			—
Asset backed securities		270		5			275		303		—			303
Total restricted cash and investments		231,682		9,539			241,221		243,787		3,461			247,248
Total investments	$	360,049	$	10,573		$	370,622	$	361,468	$	3,896		$	365,364

(1) Included in restricted cash and investments within the condensed consolidated balance sheets is restricted cash of $94.4 million and $197.0 million as of September 30, 2020 and December 31, 2019, respectively, which is excluded from the table above. Restricted cash and investments are classified as current and noncurrent on the balance sheets based on the nature of the restriction.

Summary of Assets Measured at Fair Value on Recurring Basis

The following table summarizes the Company’s investments at September 30, 2020 and December 31, 2019 measured at fair value on a recurring basis by fair value hierarchy level (in thousands):

	September 30, 2020										December 31, 2019
	Total										Total
	Recorded										Recorded
	Basis		Level 1		Level 2		Level 3		Other ⁽¹⁾		Basis		Level 1		Level 2		Level 3		Other ⁽¹⁾
Cash equivalents:
Money market funds	$	32,723	$	—	$	—	$	—	$	32,723	$	35,526	$	—	$	—	$	—	$	35,526
Discount notes		9,999		—		9,999		—		—		—		—		—		—		—
Investments:
Corporate bonds		37,290		—		37,290		—		—		53,649		—		53,649		—		—
Asset backed securities		36,620		—		36,620		—		—		14,004		—		14,004		—		—
U.S. government agency securities		8,190		—		8,190		—		—		7,690		—		7,690		—		—
Mortgage backed securities		4,478		—		4,478		—		—		2,738		—		2,738		—		—
U.S. treasuries		101		—		101		—		—		4,509		—		4,509		—		—
Restricted cash and investments:						—
Corporate bonds		100,342		—		100,342		—		—		100,412		—		100,412		—		—
Mortgage backed securities		55,131		—		55,131		—		—		63,767		—		63,767		—		—
Money market funds		32,882		—		—		—		32,882		29,046		—		—		—		29,046
U.S. government agency securities		28,211		—		28,211		—		—		28,527		—		28,527		—		—
Commercial paper		5,999		—		5,999		—		—		—		—		—		—		—
Supranational bonds		4,802		—		4,802		—		—		4,800		—		4,800		—		—
U.S. treasuries		4,791		—		4,791		—		—		16,927		—		16,927		—		—
Mutual funds		4,712		4,712		—		—		—		3,466		3,466		—		—		—
Municipal bonds		4,076		—		4,076		—				—		—		—		—		—
Asset backed securities		275		—		275		—		—		303		—		303		—		—
Total investments	$	370,622	$	4,712	$	300,305	$	—	$	65,605	$	365,364	$	3,466	$	297,326	$	—	$	64,572

(1) Investments in money market funds measured at fair value using the net asset value per share practical expedient are not subject to hierarchy level classification disclosure. The Company invests in money market funds that seek to maintain a stable net asset value. These investments include commingled funds that comprise high-quality short-term securities representing liquid debt and monetary instruments where the redemption value is likely to be the fair value. Redemption is permitted daily without written notice.

Summary of Contractual Maturities of Available for Sale Securities

The following table summarizes the contractual maturities of the Company’s available-for-sale securities at September 30, 2020. Actual maturities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

	September 30, 2020
(In thousands)	Less than 1 Year		Between 1 to 5 Years		Between 5 to 10 Years		After 10 Years		Total
Corporate bonds	$	41,077	$	62,479	$	34,076	$	—	$	137,632
Money market funds		65,605		—		—		—		65,605
Asset backed securities		—		286		—		36,609		36,895
U.S. government agency securities		1,018		14,646		20,737		—		36,401
Discount notes		9,999		—		—		—		9,999
Commercial paper		5,999		—		—		—		5,999
U.S. treasuries		3,330		1,562		—		—		4,892
Supranational bonds		4,802		—		—		—		4,802
Municipal bonds		—		4,076		—		—		4,076
Total	$	131,830	$	83,049	$	54,813	$	36,609	$	306,301