XML 27 R15.htm IDEA: XBRL DOCUMENT v3.6.0.2
SECURITIES
 3 Months Ended
Dec. 31, 2016
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
SECURITIES

The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale and held to maturity securities at December 31, 2016 and September 30, 2016 are presented below.

Available For Sale
 
 
GROSS

 
GROSS

 
 
At December 31, 2016
AMORTIZED
COST

 
UNREALIZED
GAINS

 
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Small business administration securities
78,396

 
1,104

 
(52
)
 
79,448

Non-bank qualified obligations of states and political subdivisions
740,723

 
3,432

 
(6,172
)
 
737,983

Asset-backed securities
118,085

 
791

 
(729
)
 
118,147

Mortgage-backed securities
543,698

 
497

 
(9,256
)
 
534,939

Total debt securities
1,480,902

 
5,824

 
(16,209
)
 
1,470,517

Common equities and mutual funds
856

 
406

 
(8
)
 
1,254

Total available for sale securities
$
1,481,758

 
$
6,230

 
$
(16,217
)
 
$
1,471,771


At September 30, 2016
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Trust preferred securities
$
14,935

 
$
—

 
$
(1,957
)
 
$
12,978

Small business administration securities
78,431

 
2,288

 
—

 
80,719

Non-bank qualified obligations of states and political subdivisions
668,628

 
30,141

 
(97
)
 
698,672

 Asset-backed securities
117,487

 
73

 
(745
)
 
116,815

Mortgage-backed securities
555,036

 
4,382

 
(478
)
 
558,940

Total debt securities
1,434,517

 
36,884

 
(3,277
)
 
1,468,124

Common equities and mutual funds
755

 
373

 
(3
)
 
1,125

Total available for sale securities
$
1,435,272

 
$
37,257

 
$
(3,280
)
 
$
1,469,249


Held to Maturity
 
 
GROSS

 
GROSS

 
 
At December 31, 2016
AMORTIZED
COST

 
UNREALIZED
GAINS

 
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
20,352

 
$
45

 
$
(278
)
 
$
20,119

Non-bank qualified obligations of states and political subdivisions
458,259

 
1,326

 
(5,072
)
 
454,513

Mortgage-backed securities
126,365

 
—

 
(1,896
)
 
124,469

Total held to maturity securities
$
604,976

 
$
1,371

 
$
(7,246
)
 
$
599,101

At September 30, 2016
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
20,626

 
$
355

 
$
(44
)
 
$
20,937

Non-bank qualified obligations of states and political subdivisions
465,469

 
11,744

 
(11
)
 
477,202

Mortgage-backed securities
133,758

 
708

 
(31
)
 
134,435

Total held to maturity securities
$
619,853

 
$
12,807

 
$
(86
)
 
$
632,574



Included in securities available for sale are trust preferred securities as follows:

During the first quarter of fiscal 2017, the Company sold all trust preferred securities.

At September 30, 2016
 
 
 
 
 
 
 
 
     
Issuer
Amortized Cost
 
Fair Value
 
Unrealized
Gain (Loss)
 
S&P
Credit Rating
 
Moody's
Credit Rating
 
(Dollars in Thousands)
 
 
 
  
Key Corp. Capital I
$
4,987

 
$
4,189

 
$
(798
)
 
BB+
 
Baa2
Huntington Capital Trust II SE
4,981

 
4,077

 
(904
)
 
BB
 
Baa2
PNC Capital Trust
4,968

 
4,712

 
(256
)
 
BBB-
 
Baa1
Total
$
14,936

 
$
12,978

 
$
(1,958
)
 
 
 
  

 

Management has implemented a process to identify securities with potential credit impairment that are other-than-temporary.  This process involves evaluation of the length of time and extent to which the fair value has been less than the amortized cost basis, review of available information regarding the financial position of the issuer, monitoring the rating, watch, and outlook of the security, monitoring changes in value, cash flow projections, and the Company’s intent to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost which, in some cases, may extend to maturity.  To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

For all securities considered temporarily impaired, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost, which may occur at maturity.  The Company believes it will collect all principal and interest due on all investments with amortized cost in excess of fair value and considered only temporarily impaired.

Generally accepted accounting principles require that, at acquisition, an enterprise classify debt securities into one of three categories: Available for sale (“AFS”), Held to Maturity (“HTM”) or trading. AFS securities are carried at fair value on the consolidated statements of financial condition, and unrealized holding gains and losses are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income (“AOCI”). HTM debt securities are measured at amortized cost. Both AFS and HTM are subject to review for other-than-temporary impairment. The Company did not have any trading securities at December 31, 2016 or September 30, 2016.
Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2016 and September 30, 2016, were as follows:

Available For Sale
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At December 31, 2016
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
   Small business administration securities
$
28,331

 
$
(52
)
 
$
—

 
$
—

 
$
28,331

 
$
(52
)
Non-bank qualified obligations of states and political subdivisions
396,493

 
(6,002
)
 
2,561

 
(170
)
 
399,054

 
(6,172
)
Asset-backed securities
50,481

 
(729
)
 
—

 
—

 
50,481

 
(729
)
Mortgage-backed securities
473,394

 
(8,333
)
 
34,794

 
(923
)
 
508,188

 
(9,256
)
Total debt securities
948,699

 
(15,116
)
 
37,355

 
(1,093
)
 
986,054

 
(16,209
)
Common equities and mutual funds
—

 
—

 
120

 
(8
)
 
120

 
(8
)
Total available for sale securities
$
948,699

 
$
(15,116
)
 
$
37,475

 
$
(1,101
)
 
$
986,174

 
$
(16,217
)

 
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At September 30, 2016
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Trust preferred securities
$
—

 
$
—

 
$
12,978

 
$
(1,957
)
 
$
12,978

 
$
(1,957
)
Non-bank qualified obligations of states and political subdivisions
8,481

 
(58
)
 
2,688

 
(39
)
 
11,169

 
(97
)
Asset-backed securities
89,403

 
(745
)
 
—

 
—

 
89,403

 
(745
)
Mortgage-backed securities
54,065

 
(230
)
 
36,979

 
(248
)
 
91,044

 
(478
)
Total debt securities
151,949

 
(1,033
)
 
52,645

 
(2,244
)
 
204,594

 
(3,277
)
Common equities and mutual funds
—

 
—

 
125

 
(3
)
 
125

 
(3
)
Total available for sale securities
$
151,949

 
$
(1,033
)
 
$
52,770

 
$
(2,247
)
 
$
204,719

 
$
(3,280
)

Held To Maturity
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At December 31, 2016
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
14,552

 
$
(230
)
 
$
2,236

 
$
(48
)
 
$
16,788

 
$
(278
)
Non-bank qualified obligations of states and political subdivisions
356,031

 
(5,072
)
 
—

 
—

 
356,031

 
(5,072
)
Mortgage-backed securities
124,469

 
(1,896
)
 
—

 
—

 
124,469

 
(1,896
)
Total held to maturity securities
$
495,052

 
$
(7,198
)
 
$
2,236

 
$
(48
)
 
$
497,288

 
$
(7,246
)
 
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At September 30, 2016
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
2,909

 
$
(13
)
 
$
2,256

 
$
(31
)
 
$
5,165

 
$
(44
)
Non-bank qualified obligations of states and political subdivisions
1,294

 
(11
)
 
—

 
—

 
1,294

 
(11
)
Mortgage-backed securities
20,061

 
(31
)
 
—

 
—

 
20,061

 
(31
)
Total held to maturity securities
$
24,264

 
$
(55
)
 
$
2,256

 
$
(31
)
 
$
26,520

 
$
(86
)


At December 31, 2016, the investment portfolio included securities with current unrealized losses which have existed for longer than one year.  All of these securities are considered to be acceptable credit risks.  Because the declines in fair value were due to changes in market interest rates, not in estimated cash flows, and the Company does not intend to sell these securities (has not made a decision to sell) and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may occur at maturity, no other-than-temporary impairment was recorded at December 31, 2016.

The amortized cost and fair value of debt securities by contractual maturity are shown below.  Certain securities have call features which allow the issuer to call the security prior to maturity.  Expected maturities may differ from contractual maturities in mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.  Therefore, mortgage-backed securities are not included in the maturity categories in the following maturity summary.  The expected maturities of certain Small Business Administration and certain asset-backed securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation. However, certain prepayment penalties may apply.

Available For Sale
AMORTIZED
COST

 
FAIR
VALUE

 
At December 31, 2016
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
13,248

 
13,386

Due after five years through ten years
408,123

 
410,652

Due after ten years
515,833

 
511,540

 
937,204

 
935,578

Mortgage-backed securities
543,698

 
534,939

Common equities and mutual funds
856

 
1,254

Total available for sale securities
$
1,481,758

 
$
1,471,771

 
AMORTIZED
COST

 
FAIR
VALUE

At September 30, 2016
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
17,370

 
17,897

Due after five years through ten years
426,034

 
446,771

Due after ten years
436,077

 
444,516

 
879,481

 
909,184

Mortgage-backed securities
555,036

 
558,940

Common equities and mutual funds
755

 
1,125

Total available for sale securities
$
1,435,272

 
$
1,469,249

Held To Maturity
AMORTIZED
COST

 
FAIR
VALUE

 
At December 31, 2016
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
341

 
$
341

Due after one year through five years
12,648

 
12,618

Due after five years through ten years
157,174

 
156,228

Due after ten years
308,448

 
305,445

 
478,611

 
474,632

Mortgage-backed securities
126,365

 
124,469

Total held to maturity securities
$
604,976

 
$
599,101


 
AMORTIZED
COST

 
FAIR
VALUE

At September 30, 2016
(Dollars in Thousands)
Due in one year or less
$
472

 
$
471

Due after one year through five years
12,502

 
12,696

Due after five years through ten years
157,944

 
163,806

Due after ten years
315,177

 
321,166

 
486,095

 
498,139

Mortgage-backed securities
133,758

 
134,435

Total held to maturity securities
$
619,853

 
$
632,574