XML 23 R11.htm IDEA: XBRL DOCUMENT
v3.24.2.u1

SECURITIES | 9 Months Ended
--- | ---
Jun. 30, 2024
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
Debt Securities AFS |  |  |  |
At June 30, 2024 |  |  |  |
Corporate securities | $ | 25,000 |  | $ | — |  | $ | (5,375) |  | $ | 19,625 |
SBA securities | 90,960 |  | — |  | (7,389) |  | 83,571 |
Obligations of states and political subdivisions | 502 |  | — |  | (36) |  | 466 |
Non-bank qualified obligations of states and political subdivisions | 252,583 |  | 8 |  | (36,424) |  | 216,167 |
Asset-backed securities | 211,421 |  | 418 |  | (4,679) |  | 207,160 |
Mortgage-backed securities | 1,420,440 |  | 3 |  | (221,972) |  | 1,198,471 |
Total debt securities AFS | $ | 2,000,906 |  | $ | 429 |  | $ | (275,875) |  | $ | 1,725,460 |
At September 30, 2023 |  |  |  |
Corporate securities | $ | 25,000 |  | $ | — |  | $ | (6,750) |  | $ | 18,250 |
SBA securities | 95,549 |  | — |  | (10,307) |  | 85,242 |
Obligations of states and political subdivisions | 2,368 |  | — |  | (79) |  | 2,289 |
Non-bank qualified obligations of states and political subdivisions | 269,396 |  | — |  | (42,673) |  | 226,723 |
Asset-backed securities | 255,384 |  | 234 |  | (9,419) |  | 246,199 |
Mortgage-backed securities | 1,495,636 |  | — |  | (270,111) |  | 1,225,525 |
Total debt securities AFS | $ | 2,143,333 |  | $ | 234 |  | $ | (339,339) |  | $ | 1,804,228 |
Debt Securities HTM |  |  |  |
At June 30, 2024 |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | 31,970 |  | $ | — |  | $ | (3,521) |  | $ | 28,449 |
Mortgage-backed securities | 2,056 |  | — |  | (268) |  | 1,788 |
Total debt securities HTM | $ | 34,026 |  | $ | — |  | $ | (3,789) |  | $ | 30,237 |
At September 30, 2023 |
Non-bank qualified obligations of states and political subdivisions | $ | 34,415 |  | $ | — |  | $ | (4,844) |  | $ | 29,571 |
Mortgage-backed securities | 2,176 |  | — |  | (322) |  | 1,854 |
Total debt securities HTM | $ | 36,591 |  | $ | — |  | $ | (5,166) |  | $ | 31,425 |
Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous loss position, were as follows:
| LESS THAN 12 MONTHS |  | OVER 12 MONTHS |  | TOTAL
(Dollars in thousands) | Fair Value | Gross Unrealized (Losses) |  | Fair Value | Gross Unrealized (Losses) |  | Fair Value | Gross Unrealized (Losses)
Debt Securities AFS |  |  |  |  |  |  |  |
At June 30, 2024 |  |  |  |  |  |  |  |
Corporate securities | $ | — |  | $ | — |  |  | $ | 19,625 |  | $ | (5,375) |  |  | $ | 19,625 |  | $ | (5,375) |
SBA securities | — |  | — |  |  | 83,571 |  | (7,389) |  |  | 83,571 |  | (7,389) |
Obligations of state and political subdivisions | — |  | — |  |  | 466 |  | (36) |  |  | 466 |  | (36) |
Non-bank qualified obligations of states and political subdivisions | — |  | — |  |  | 214,139 |  | (36,424) |  |  | 214,139 |  | (36,424) |
Asset-backed securities | — |  | — |  |  | 94,518 |  | (4,679) |  |  | 94,518 |  | (4,679) |
Mortgage-backed securities | 2,635 |  | (42) |  |  | 1,194,791 |  | (221,930) |  |  | 1,197,426 |  | (221,972) |
Total debt securities AFS | $ | 2,635 |  | $ | (42) |  |  | $ | 1,607,110 |  | $ | (275,833) |  |  | $ | 1,609,745 |  | $ | (275,875) |
At September 30, 2023 |  |  |  |  |  |  |  |
Corporate securities | $ | — |  | $ | — |  |  | $ | 18,250 |  | $ | (6,750) |  |  | $ | 18,250 |  | $ | (6,750) |
SBA securities | 22,327 |  | (1,919) |  |  | 62,915 |  | (8,388) |  |  | 85,242 |  | (10,307) |
Obligations of state and political subdivisions | — |  | — |  |  | 2,289 |  | (79) |  |  | 2,289 |  | (79) |
Non-bank qualified obligations of states and political subdivisions | 5,010 |  | (83) |  |  | 221,714 |  | (42,590) |  |  | 226,723 |  | (42,673) |
Asset-backed securities | 46,528 |  | (224) |  |  | 115,608 |  | (9,195) |  |  | 162,136 |  | (9,419) |
Mortgage-backed securities | 18,311 |  | (944) |  |  | 1,207,214 |  | (269,167) |  |  | 1,225,525 |  | (270,111) |
Total debt securities AFS | $ | 92,176 |  | $ | (3,170) |  |  | $ | 1,627,990 |  | $ | (336,169) |  |  | $ | 1,720,165 |  | $ | (339,339) |
Debt Securities HTM |  |  |  |  |  |  |  |
At June 30, 2024 |  |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | — |  | $ | — |  |  | $ | 28,449 |  | $ | (3,521) |  |  | $ | 28,449 |  | $ | (3,521) |
Mortgage-backed securities | — |  | — |  |  | 1,788 |  | (268) |  |  | 1,788 |  | (268) |
Total debt securities HTM | $ | — |  | $ | — |  |  | $ | 30,237 |  | $ | (3,789) |  |  | $ | 30,237 |  | $ | (3,789) |
At September 30, 2023 |  |  |  |  |  |  |  |
Non-bank qualified obligations of states and political subdivisions | $ | — |  | $ | — |  |  | $ | 29,571 |  | $ | (4,844) |  |  | $ | 29,571 |  | $ | (4,844) |
Mortgage-backed securities | — |  | — |  |  | 1,854 |  | (322) |  |  | 1,854 |  | (322) |
Total debt securities HTM | $ | — |  | $ | — |  |  | $ | 31,425 |  | $ | (5166) |  |  | $ | 31,425 |  | $ | (5,166) |
The decrease in the fair value of investment securities balances when comparing June 30, 2024 to September 30, 2023 was primarily driven by principal pay downs during the nine months. At June 30, 2024, there were 193 securities AFS in an unrealized loss position. All of the mortgage-backed securities ("MBS") in an unrealized loss position at June 30, 2024 were government guaranteed. Management assessed each investment security with unrealized losses for credit loss and determined all unrealized losses on these securities were due to adverse market conditions and/or change in interest rates versus credit loss. As part of that assessment, management evaluated and concluded that it is more-likely-than-not that the Company will not be required and does not intend to sell any of the securities prior to recovery of the amortized cost. At June 30, 2024, there was no allowance for credit losses ("ACL") for debt securities AFS or debt securities HTM. 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 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.
(Dollars in thousands) | At June 30, 2024 |  | At September 30, 2023
Debt Securities AFS | Amortized Cost | Fair Value |  | Amortized Cost | Fair Value
Due in one year or less | $ | 513 |  | $ | 506 |  |  | $ | 5,023 |  | $ | 4,971 |
Due after one year through five years | 20,007 |  | 18,631 |  |  | 11,175 |  | 10,292 |
Due after five years through ten years | 72,379 |  | 63,601 |  |  | 79,139 |  | 66,428 |
Due after ten years | 487,567 |  | 444,251 |  |  | 552,360 |  | 497,012 |
| 580,466 |  | 526,989 |  |  | 647,697 |  | 578,703 |
Mortgage-backed securities | 1,420,440 |  | 1,198,471 |  |  | 1,495,636 |  | 1,225,525 |
Total debt securities AFS | $ | 2,000,906 |  | $ | 1,725,460 |  |  | $ | 2,143,333 |  | $ | 1,804,228 |
Debt Securities HTM |  |  |  |  |
Due after ten years | $ | 31,970 |  | $ | 28,449 |  |  | $ | 34,415 |  | $ | 29,571 |
| 31,970 |  | 28,449 |  |  | 34,415 |  | 29,571 |
Mortgage-backed securities | 2,056 |  | 1,788 |  |  | 2,176 |  | 1,854 |
Total debt securities HTM | $ | 34,026 |  | $ | 30,237 |  |  | $ | 36,591 |  | $ | 31,425 |
Federal Reserve Bank ("FRB") Stock. 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 totaled $19.7 million at June 30, 2024 and September 30, 2023. These equity securities are 'restricted' in that they can only be owned by member banks. Federal Home Loan Bank ("FHLB") Stock. The Company's borrowings from the FHLB are secured by 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 $4.8 million and $8.5 million at June 30, 2024 and at September 30, 2023, respectively. 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 cost approximates fair value. Equity Securities. The Company held $4.3 million and $3.4 million in marketable equity securities within other assets on the Condensed Consolidated Statements of Financial Condition at June 30, 2024 and September 30, 2023, respectively. The Company recognized $0.2 million unrealized losses on marketable equity securities during the nine months ended June 30, 2024 and 2023. No such securities were sold during the nine months ended June 30, 2024. Non-marketable equity securities with a readily determinable fair value totaled $10.5 million and $8.4 million at June 30, 2024 and September 30, 2023, respectively. These securities are held within other assets on the Condensed Consolidated Statements of Financial Condition. The Company recognized $0.6 million in unrealized gains and $0.1 million in unrealized losses during the nine months ended June 30, 2024 and 2023, respectively. No such securities were sold during the nine months ended June 30, 2024. Non-marketable equity securities without readily determinable fair value totaled $13.8 million and $16.2 million at June 30, 2024 and September 30, 2023, respectively, reflecting Company ownership interests in other entities through its Pathward Venture Capital, LLC, a wholly-owned service corporation subsidiary of the Bank that was formed in 2017 for the purpose of making minority equity investments, and other corporate investments. During the quarter ended June 30, 2024, the Company recognized a $2.4 million gain on Visa shares previously carried at cost basis of $0 since 2008. On April 8, 2024, Visa Inc. announced the commencement of an exchange offer for Visa Class B-1 common stock and the Company subsequently tendered its Visa Class B-1 common stock in exchange for a combination of Visa Class C common stock and Visa Class B-2 common stock. After entering the exchange, the Company sold its Visa Class C and Visa Class B-2 common stock in the secondary market. There was one additional such security sold during the nine months ended June 30, 2024 for a $2.5 million gain which is included in gain on sale of other on the Condensed Consolidated Statements of Operations. Equity Securities Impairment. The Company evaluates impairment for investments held at cost on at least an annual basis based on the ultimate recoverability of the par value. All other equity investments, including those under the equity method, are reviewed for other-than-temporary impairment on at least a quarterly basis. The Company recognized $1.0 million and $3.2 million impairment for such investments for the nine months ended June 30, 2024 and 2023, respectively.

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsDebtAndEquitySecuritiesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 940 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/940-320/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Name Regulation S-K (SK) -Number 229 -Section 1403 -Paragraph b -Publisher SEC Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/320/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 320 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 10 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481800/320-10-50-10 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6B Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6B -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6B Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 942 -SubTopic 320 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/942-320/tableOfContent + Details
Name: | us-gaap_InvestmentsInDebtAndMarketableEquitySecuritiesAndCertainTradingAssetsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration