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SECURITIES
 6 Months Ended
Mar. 31, 2018
Investments, Debt and Equity Securities [Abstract]  
SECURITIES
SECURITIES

During the first quarter of fiscal 2018, the Company early adopted Accounting Standard Update ("ASU") 2017-12, "Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities." Due to the early adoption of the ASU, the Company transferred $204.7 million of investment securities and $101.3 million of MBS from HTM to AFS during the first quarter of fiscal 2018. This change allows for enhanced balance sheet management and provides the opportunity for more liquidity, should it be needed.
The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale and held to maturity securities at March 31, 2018 and September 30, 2017 are presented below.
Available For Sale
 
 
 
 
 
 
 
At March 31, 2018
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Small business administration securities
52,313

 
50

 
(266
)
 
52,097

Obligations of states and political subdivisions
14,508

 
62

 
(173
)
 
14,397

Non-bank qualified obligations of states and political subdivisions
1,219,989

 
4,502

 
(18,125
)
 
1,206,366

Asset-backed securities
142,305

 
2,007

 
(161
)
 
144,151

Mortgage-backed securities
671,649

 
—

 
(16,759
)
 
654,890

Total debt securities
2,100,764

 
6,621

 
(35,484
)
 
2,071,901

Common equities and mutual funds
1,347

 
505

 
(1
)
 
1,851

Total available for sale securities
$
2,102,111

 
$
7,126

 
$
(35,485
)
 
$
2,073,752

At September 30, 2017
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Small business administration securities
57,046

 
825

 
—

 
57,871

Non-bank qualified obligations of states and political subdivisions
938,883

 
14,983

 
(3,037
)
 
950,829

Asset-backed securities
94,451

 
2,381

 
—

 
96,832

Mortgage-backed securities
588,918

 
1,259

 
(3,723
)
 
586,454

Total debt securities
1,679,298

 
19,448

 
(6,760
)
 
1,691,986

Common equities and mutual funds
1,009

 
436

 
—

 
1,445

Total available for sale securities
$
1,680,307

 
$
19,884

 
$
(6,760
)
 
$
1,693,431



Held to Maturity
 
 
 
 
 
 
 
At March 31, 2018
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
3,934

 
$
17

 
$
(25
)
 
$
3,926

Non-bank qualified obligations of states and political subdivisions
222,684

 
68

 
(8,189
)
 
214,563

Mortgage-backed securities
8,393

 
—

 
(332
)
 
8,061

Total held to maturity securities
$
235,011

 
$
85

 
$
(8,546
)
 
$
226,550


At September 30, 2017
AMORTIZED
COST

 
GROSS
UNREALIZED
GAINS

 
GROSS
UNREALIZED
(LOSSES)

 
FAIR
VALUE

 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
19,247

 
$
157

 
$
(36
)
 
$
19,368

Non-bank qualified obligations of states and political subdivisions
430,593

 
4,744

 
(2,976
)
 
432,361

Mortgage-backed securities
113,689

 
—

 
(1,233
)
 
112,456

Total held to maturity securities
$
563,529

 
$
4,901

 
$
(4,245
)
 
$
564,185



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 the Company 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 the Company determines 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.

GAAP requires 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 March 31, 2018 or September 30, 2017.

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 March 31, 2018 and September 30, 2017, were as follows:

Available For Sale
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At March 31, 2018
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Small business administration securities
$
42,418

 
$
(266
)
 
$
—

 
$
—

 
$
42,418

 
$
(266
)
Obligations of states and political subdivisions
8,469

 
(173
)
 
—

 
—

 
8,469

 
(173
)
Non-bank qualified obligations of states and political subdivisions
770,431

 
(17,356
)
 
15,650

 
(769
)
 
786,081

 
(18,125
)
Asset-backed securities
49,063

 
(161
)
 
—

 
—

 
49,063

 
(161
)
Mortgage-backed securities
374,252

 
(6,233
)
 
280,638

 
(10,526
)
 
654,890

 
(16,759
)
Total debt securities
1,244,633

 
(24,189
)
 
296,288

 
(11,295
)
 
1,540,921

 
(35,484
)
Common equities and mutual funds
1,850

 
(1
)
 
—

 
—

 
1,850

 
(1
)
Total available for sale securities
$
1,246,483

 
$
(24,190
)
 
$
296,288

 
$
(11,295
)
 
$
1,542,771

 
$
(35,485
)

 
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At September 30, 2017
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Non-bank qualified obligations of states and political subdivisions
280,900

 
(2,887
)
 
5,853

 
(150
)
 
286,753

 
(3,037
)
Mortgage-backed securities
237,897

 
(1,625
)
 
100,287

 
(2,098
)
 
338,184

 
(3,723
)
Total debt securities
518,797

 
(4,512
)
 
106,140

 
(2,248
)
 
624,937

 
(6,760
)
Total available for sale securities
$
518,797

 
$
(4,512
)
 
$
106,140

 
$
(2,248
)
 
$
624,937

 
$
(6,760
)

Held To Maturity
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At March 31, 2018
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
1,682

 
$
(4
)
 
$
1,742

 
$
(21
)
 
$
3,424

 
$
(25
)
Non-bank qualified obligations of states and political subdivisions
133,070

 
(4,468
)
 
76,449

 
(3,721
)
 
209,519

 
(8,189
)
Mortgage-backed securities
—

 
—

 
8,061

 
(332
)
 
8,061

 
(332
)
Total held to maturity securities
$
134,752

 
$
(4,472
)
 
$
86,252

 
$
(4,074
)
 
$
221,004

 
$
(8,546
)
 
LESS THAN 12 MONTHS
 
OVER 12 MONTHS
 
TOTAL
At September 30, 2017
Fair
Value
 
Unrealized
(Losses)
 
Fair
Value
 
Unrealized
(Losses)
 
Fair Value
 
Unrealized
(Losses)
 
(Dollars in Thousands)
Debt securities
 
 
 
 
 
 
 
 
 
 
 
Obligations of states and political subdivisions
$
1,364

 
$
(6
)
 
$
4,089

 
$
(30
)
 
$
5,453

 
$
(36
)
Non-bank qualified obligations of states and political subdivisions
202,018

 
(2,783
)
 
6,206

 
(193
)
 
208,224

 
(2,976
)
Mortgage-backed securities
112,456

 
(1,233
)
 
—

 
—

 
112,456

 
(1,233
)
Total held to maturity securities
$
315,838

 
$
(4,022
)
 
$
10,295

 
$
(223
)
 
$
326,133

 
$
(4,245
)


At March 31, 2018, 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 because 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 securities before recovery of their amortized cost basis, which may occur at maturity, no other-than-temporary impairment was recorded at March 31, 2018.

The amortized cost and fair value of debt securities by contractual maturity as of the dates set forth below 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 housing related municipal securities, Small Business Administration and 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 March 31, 2018
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
100

 
$
100

Due after one year through five years
47,402

 
47,956

Due after five years through ten years
436,528

 
438,149

Due after ten years
945,085

 
930,806

 
1,429,115

 
1,417,011

Mortgage-backed securities
671,649

 
654,890

Common equities and mutual funds
1,347

 
1,851

Total available for sale securities
$
2,102,111

 
$
2,073,752

 
AMORTIZED
COST

 
FAIR
VALUE

At September 30, 2017
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
—

 
$
—

Due after one year through five years
36,586

 
37,674

Due after five years through ten years
347,831

 
358,198

Due after ten years
705,963

 
709,660

 
1,090,380

 
1,105,532

Mortgage-backed securities
588,918

 
586,454

Common equities and mutual funds
1,009

 
1,445

Total available for sale securities
$
1,680,307

 
$
1,693,431

Held To Maturity
AMORTIZED
COST

 
FAIR
VALUE

 
At March 31, 2018
(Dollars in Thousands)
 
 
 
 
Due in one year or less
$
2,267

 
$
2,260

Due after one year through five years
16,641

 
16,572

Due after five years through ten years
22,949

 
22,695

Due after ten years
184,761

 
176,962

 
226,618

 
218,489

Mortgage-backed securities
8,393

 
8,061

Total held to maturity securities
$
235,011

 
$
226,550

 
AMORTIZED
COST

 
FAIR
VALUE

At September 30, 2017
(Dollars in Thousands)
Due in one year or less
$
1,483

 
$
1,480

Due after one year through five years
17,926

 
18,160

Due after five years through ten years
144,996

 
147,832

Due after ten years
285,435

 
284,257

 
449,840

 
451,729

Mortgage-backed securities
113,689

 
112,456

Total held to maturity securities
$
563,529

 
$
564,185