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SECURITIES | 12 Months Ended
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Sep. 30, 2020
Investments, Debt and Equity Securities [Abstract] |
SECURITIES | SECURITIES The amortized cost, gross unrealized gains and losses and estimated fair values of available for sale ("AFS") and held to maturity ("HTM") debt securities are presented below.
(Dollars in Thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
At September 30, 2020 |  |  |  |  |  |  |
Debt securities AFS |  |  |  |  |  |  |
SBA securities | $ | 159,722 |  |  | $ | 5,391 |  |  | $ | (158) |  |  | $ | 164,955 |
Obligation of states and political subdivisions | 825 |  |  | 16 |  |  | — |  |  | 841 |
Non-bank qualified obligations of states and political subdivisions | 314,819 |  |  | 8,978 |  |  | (23) |  |  | 323,774 |
Asset-backed securities | 329,139 |  |  | 2,015 |  |  | (6,229) |  |  | 324,925 |
Mortgage-backed securities | 439,879 |  |  | 14,567 |  |  | (839) |  |  | 453,607 |
Total debt securities AFS | $ | 1,244,384 |  |  | $ | 30,967 |  |  | $ | (7,249) |  |  | $ | 1,268,102 |
(Dollars in Thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
At September 30, 2019 |  |  |  |  |  |  |
Debt securities AFS |  |  |  |  |  |  |
SBA securities | $ | 182,327 |  |  | $ | 3,655 |  |  | $ | — |  |  | $ | 185,982 |
Obligation of states and political subdivisions | 858 |  |  | 16 |  |  | — |  |  | 874 |
Non-bank qualified obligations of states and political subdivisions | 396,430 |  |  | 5,030 |  |  | (903) |  |  | 400,557 |
Asset-backed securities | 305,603 |  |  | 262 |  |  | (3,331) |  |  | 302,534 |
Mortgage-backed securities | 378,670 |  |  | 5,731 |  |  | (1,855) |  |  | 382,546 |
Total debt securities AFS | 1,263,888 |  |  | 14,694 |  |  | (6,089) |  |  | 1,272,493 |
(Dollars in Thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
At September 30, 2020 |  |  |  |  |  |  |
Debt securities HTM |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | 87,183 |  |  | $ | 1,040 |  |  | $ | (29) |  |  | $ | 88,194 |
Mortgage-backed securities | 5,427 |  |  | 124 |  |  | — |  |  | 5,551 |
Total HTM securities | $ | 92,610 |  |  | $ | 1,164 |  |  | $ | (29) |  |  | $ | 93,745 |
(Dollars in Thousands) | Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized (Losses) |  | Fair Value
At September 30, 2019 |  |  |  |  |  |  |
Debt securities HTM |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | 127,582 |  |  | $ | 108 |  |  | $ | (1,403) |  |  | $ | 126,287 |
Mortgage-backed securities | 7,182 |  |  | 14 |  |  | (13) |  |  | 7,183 |
Total HTM securities | $ | 134,764 |  |  | $ | 122 |  |  | $ | (1,416) |  |  | $ | 133,470 |
Management has implemented processes to identify securities that could potentially have a credit impairment that is other-than-temporary. This process can include, but is not limited to, evaluating the length of time and extent to which the fair value has been less than the amortized cost basis, reviewing available information regarding the financial position of the issuer, interest or dividend payment status, monitoring the rating of the security, monitoring changes in value, and projecting cash flows. Management also determines whether the Company intends 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 basis 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 collection will occur for 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: AFS, 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 had no trading securities at September 30, 2020 or 2019. Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position, were as follows:
| LESS THAN 12 MONTHS |  | OVER 12 MONTHS |  | TOTAL
(Dollars in Thousands) | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses)
At September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Debt securities AFS |  |  |  |  |  |  |  |  |  |  |
SBA securities | $ | 32,257 |  |  | $ | (102) |  |  | $ | 9,875 |  |  | $ | (56) |  |  | $ | 42,132 |  |  | $ | (158) |
Non-bank qualified obligations of states and political subdivisions | 6,265 |  |  | (6) |  |  | 3,103 |  |  | (17) |  |  | 9,368 |  |  | (23) |
Asset-backed securities | 106,474 |  |  | (1,089) |  |  | 178,686 |  |  | (5,140) |  |  | 285,160 |  |  | (6,229) |
Mortgage-backed securities | 138,338 |  |  | (839) |  |  | — |  |  | — |  |  | 138,338 |  |  | (839) |
Total debt securities AFS | $ | 283,334 |  |  | $ | (2,036) |  |  | $ | 191,664 |  |  | $ | (5,213) |  |  | $ | 474,998 |  |  | $ | (7,249) |
| LESS THAN 12 MONTHS |  | OVER 12 MONTHS |  | TOTAL
(Dollars in Thousands) | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses)
At September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Debt securities AFS |  |  |  |  |  |  |  |  |  |  |
SBA securities | $ | 10,262 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 10,262 |  |  | $ | — |
Non-bank qualified obligations of states and political subdivisions | 66,326 |  |  | (177) |  |  | 55,428 |  |  | (726) |  |  | 121,754 |  |  | (903) |
Asset-backed securities | 158,176 |  |  | (1,823) |  |  | 93,259 |  |  | (1,508) |  |  | 251,435 |  |  | (3,331) |
Mortgage-backed securities | 1,713 |  |  | (1) |  |  | 89,634 |  |  | (1,854) |  |  | 91,347 |  |  | (1,855) |
Total debt securities AFS | $ | 236,477 |  |  | $ | (2,001) |  |  | $ | 238,321 |  |  | $ | (4,088) |  |  | $ | 474,798 |  |  | $ | (6,089) |
| LESS THAN 12 MONTHS |  | OVER 12 MONTHS |  | TOTAL
(Dollars in Thousands) | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses)
At September 30, 2020 |  |  |  |  |  |  |  |  |  |  |
Debt securities HTM |  |  |  |  |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | 7,397 |  |  | $ | (9) |  |  | $ | 3,637 |  |  | $ | (20) |  |  | $ | 11,034 |  |  | $ | (29) |
Total debt securities HTM | $ | 7,397 |  |  | $ | (9) |  |  | $ | 3,637 |  |  | $ | (20) |  |  | $ | 11,034 |  |  | $ | (29) |
| LESS THAN 12 MONTHS |  | OVER 12 MONTHS |  | TOTAL
(Dollars in Thousands) | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses) |  | Fair Value |  | Unrealized (Losses)
At September 30, 2019 |  |  |  |  |  |  |  |  |  |  |
Debt securities HTM |  |  |  |  |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | 5,967 |  |  | $ | (6) |  |  | $ | 109,368 |  |  | $ | (1,397) |  |  | $ | 115,335 |  |  | $ | (1,403) |
Mortgage-backed securities | 1,471 |  |  | — |  |  | 1,803 |  |  | (13) |  |  | 3,274 |  |  | (13) |
Total debt securities HTM | $ | 7,438 |  |  | $ | (6) |  |  | $ | 111,171 |  |  | $ | (1,410) |  |  | $ | 118,609 |  |  | $ | (1,416) |
At September 30, 2020 and 2019, the Company's investment portfolio included securities with current unrealized losses that have existed for longer than one year. All of these securities are considered to be acceptable credit risks. Because (i) the declines in fair value were due to changes in market interest rates, not in estimated cash flows, (ii) the Company does not intend or has not made a decision to sell these securities and (iii) 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 September 30, 2020 or 2019. 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 MBS because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, MBS are not included in the maturity categories in the following maturity summary. The expected maturities of certain SBA securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation. However, certain prepayment penalties may apply.
Securities AFS at Fair Value |  |  |
(Dollars in Thousands) | Amortized Cost |  | Fair Value
At September 30, 2020 |  |  |
Due in one year or less | $ | 1,385 |  |  | $ | 1,398 |
Due after one year through five years | 20,805 |  |  | 21,769 |
Due after five years through ten years | 32,441 |  |  | 34,025 |
Due after ten years | 749,874 |  |  | 757,303 |
| 804,505 |  |  | 814,495 |
Mortgage-backed securities | 439,879 |  |  | 453,607 |
Total securities AFS, at fair value | $ | 1,244,384 |  |  | $ | 1,268,102 |
(Dollars in Thousands) | Amortized Cost |  | Fair Value
At September 30, 2019 |  |  |
Due in one year or less | $ | — |  |  | $ | — |
Due after one year through five years | 16,749 |  |  | 17,143 |
Due after five years through ten years | 50,263 |  |  | 51,840 |
Due after ten years | 818,206 |  |  | 820,964 |
| 885,218 |  |  | 889,947 |
Mortgage-backed securities | 378,670 |  |  | 382,546 |
Total securities AFS, at fair value | $ | 1,263,888 |  |  | $ | 1,272,493 |
Securities HTM at Fair Value |  |  |
(Dollars in Thousands) | Amortized Cost |  | Fair Value
At September 30, 2020 |  |  |
Due after ten years | $ | 87,183 |  |  | $ | 88,194 |
| 87,183 |  |  | 88,194 |
Mortgage-backed securities | 5,427 |  |  | 5,551 |
Total securities HTM, at cost | $ | 92,610 |  |  | $ | 93,745 |
(Dollars in Thousands) | Amortized Cost |  | Fair Value
At September 30, 2019 |  |  |
Due after ten years | $ | 127,582 |  |  | $ | 126,287 |
| 127,582 |  |  | 126,287 |
Mortgage-backed securities | 7,182 |  |  | 7,183 |
Total securities HTM, at cost | $ | 134,764 |  |  | $ | 133,470 |
Activity related to the sale of securities available for sale is summarized below.
Fiscal Year ended | 2020 |  | 2019 |  | 2018
(Dollars in Thousands) |  |  |  |  |
Available For Sale |  |  |  |  |
Proceeds from sales | $ | 4,904 |  |  | $ | 755,616 |  |  | $ | 596,758 |
Gross gains on sales | 51 |  |  | 6,006 |  |  | 2,551 |
Gross losses on sales | — |  |  | 5,277 |  |  | 10,728 |
Net gain (loss) on securities AFS | $ | 51 |  |  | $ | 729 |  |  | $ | (8,177) |
There was no activity related to the sale of securities held to maturity during the fiscal years ended September 30, 2020, 2019, and 2018. Securities with fair values of zero and approximately $21.9 million at September 30, 2020 and 2019, respectively, were pledged as collateral for public funds on deposit. Securities with fair values of zero and approximately $4.8 million at September 30, 2020, and 2019, respectively, were pledged as collateral for individual, trust and estate deposits. Other investments, at cost, include equity securities without a readily determinable fair value, which are included in other assets on the consolidated statement of financial condition, and shares of stock in the Federal Reserve Bank ("FRB") of Minneapolis and the FHLB of Des Moines. Equity Securities Equity securities without a readily determinable fair value totaled $11.0 million at September 30, 2020 and $6.5 million at September 30, 2019. FHLB Stock The Company’s borrowings from the FHLB are secured by a blanket collateral agreement with respect to a percentage of unencumbered loans and the pledge of specific investment securities. Such advances can be made pursuant to several different credit programs, each of which has its own interest rate and range of maturities. The investments in the FHLB stock are required investments related to the Company’s membership in and current borrowings from the FHLB of Des Moines. The investments in the FHLB of Des Moines could be adversely impacted by the financial operations of the FHLB and actions of their regulator, the Federal Housing Finance Agency. The FHLB stock is carried at cost since it is generally redeemable at par value. The carrying value of the stock held at the FHLB was $7.5 million and $30.9 million at September 30, 2020 and 2019, respectively. At fiscal year end 2020 and 2019, the Company pledged securities with fair values of approximately $673.8 million to be used against FHLB advances as needed and $812.2 million against specific FHLB advances, respectively. In addition, a combination of qualifying residential and other real estate loans of approximately $333.8 million and $928.8 million were pledged as collateral at September 30, 2020 and 2019, respectively. Included in Interest and Dividend Income from other investments is $0.8 million, $1.0 million and $1.1 million related to dividend income on FHLB stock for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. FRB Stock Upon conversion to a national bank on April 1, 2020, the Bank is required by federal law to subscribe to capital stock (divided into shares of $100 each) as a member of the FRB of Minneapolis with an amount equal to six per centum of the paid-up capital stock and surplus. One-half of the subscription is paid at time of application, and one-half is subject to call of the Board of Governors of the Federal Reserve System. FRB of Minneapolis stock held by the Bank at September 30, 2020 totaled $19.7 million. These equity securities are 'restricted' in that they can only be owned by member banks. At fiscal year end 2020, the Company pledged securities with fair values of approximately $359.7 million against FRB advances. Included in Interest and Dividend Income from other investments is $0.3 million related to dividend income on FRB stock for the fiscal year ended September 30, 2020. These equity securities are ‘restricted’ in that they can only be sold back to the respective institution from which they were acquired or another member institution at par. Therefore, FRB and FHLB stocks are less liquid than other marketable equity securities, and the fair value approximates cost. The Company evaluates impairment for investments held at cost on at least an annual basis based on the ultimate recoverability of the par value. No impairment was recognized for such investments for the fiscal years ended September 30, 2020, 2019 or 2018.

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