SECURITIES

9 Months Ended

Jun. 30, 2020

Investments, Debt and Equity Securities [Abstract]

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 June 30, 2020
Debt securities AFS
SBA securities	$	165,299	$	5,109	$	(141)	$	170,267
Obligations of states and political subdivisions	826		17		—		843
Non-bank qualified obligations of states and political subdivisions	327,423		4,803		(902)		331,324
Asset-backed securities	334,075		1,575		(12,505)		323,145
Mortgage-backed securities	325,025		13,381		(156)		338,250
Total debt securities AFS	$	1,152,648	$	24,885	$	(13,704)	$	1,163,829


(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
Obligations 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 June 30, 2020
Debt securities HTM
Non-bank qualified obligations of states and political subdivisions	$	98,205	$	133	$	(1,016)	$	97,322
Mortgage-backed securities	6,382		128		—		6,510
Total debt securities HTM	$	104,587	$	261	$	(1,016)	$	103,832


(Dollars in Thousands)	Amortized Cost		Gross Unrealized Gain		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 debt securities HTM	$	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 and 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 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 June 30, 2020 or September 30, 2019.

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, 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 June 30, 2020
Debt securities AFS
SBA securities	$	34,402	$	(141)	$	—	$	—	$	34,402	$	(141)

Non-bank qualified obligations of states and political subdivisions	46,805		(279)		40,425		(623)		87,230		(902)
Asset-backed securities	103,915		(2,423)		178,986		(10,082)		282,901		(12,505)
Mortgage-backed securities	32,214		(156)		—		—		32,214		(156)
Total debt securities AFS	$	217,336	$	(2,999)	$	219,411	$	(10,705)	$	436,747	$	(13,704)


	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 June 30, 2020
Debt securities HTM
Non-bank qualified obligations of states and political subdivisions	$	—	$	—	$	83,207	$	(1,016)	$	83,207	$	(1,016)

Total debt securities HTM	$	—	$	—	$	83,207	$	(1,016)	$	83,207	$	(1,016)


	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 June 30, 2020, the 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 June 30, 2020.

The amortized cost and fair value of debt securities by contractual maturity are shown below. Certain securities have call features that allow the issuer to call the security prior to maturity. Expected maturities may differ from contractual maturities in mortgage-backed securities ("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	Amortized Cost		Fair Value
(Dollars in Thousands)
At June 30, 2020
Due in one year or less	$	1,130	$	1,133
Due after one year through five years	12,688		13,205
Due after five years through ten years	44,891		47,174
Due after ten years	768,914		764,067
	827,623		825,579
Mortgage-backed securities	325,025		338,250
Total securities AFS, at fair value	$	1,152,648	$	1,163,829


(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	Amortized Cost		Fair Value
(Dollars in Thousands)
At June 30, 2020



Due after ten years	$	98,205	$	97,322
	98,205		97,322
Mortgage-backed securities	6,382		6,510
Total securities HTM, at cost	$	104,587	$	103,832


(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

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 without a readily determinable fair value totaled $11.0 million at June 30, 2020 and $6.5 million at September 30, 2019. Upon conversion to a national bank on April 1, 2020, the Company's wholly-owned subsidiary, MetaBank, 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 MetaBank at June 30, 2020 totaled $20.0 million. These equity securities are 'restricted' in that they can only be owned by member banks. FHLB of Des Moines stock held by MetaBank at June 30, 2020 and September 30, 2019 totaled $11.9 million and $30.9 million, respectively. The decrease in FHLB stock directly correlates with lower short-term borrowings balances at June 30, 2020 compared to September 30, 2019. The Company’s wholly-owned subsidiary, MetaBank, is required by federal law to maintain FHLB stock as a member of FHLB of Des Moines. 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 nine months ended June 30, 2020.