XML 19 R9.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Note 3: Securities | 3 Months Ended
--- | ---
Sep. 30, 2018
Notes |
Note 3: Securities | Note 3: Securities The amortized cost, gross unrealized gains, gross unrealized losses, and approximate fair value of securities available for sale consisted of the following:
| September 30, 2018
|  | Gross | Gross | Estimated
| Amortized | Unrealized | Unrealized | Fair
(dollars in thousands) | Cost | Gains | Losses | Value
Investment and mortgage backed securities: |  |  |  |
U.S. government-sponsored enterprises (GSEs) | $8,269 | $- | $(133) | $8,136
State and political subdivisions | 41,321 | 149 | (626) | 40,844
Other securities | 5,278 | 33 | (131) | 5,180
Mortgage-backed GSE residential | 93,177 | 1 | (2,713) | 90,465
Total investments and mortgage-backed securities | $148,045 | $183 | $(3,603) | $144,625
| June 30, 2018
|  | Gross | Gross | Estimated
| Amortized | Unrealized | Unrealized | Fair
(dollars in thousands) | Cost | Gains | Losses | Value
Investment and mortgage backed securities: |  |  |  |
U.S. government-sponsored enterprises (GSEs) | $9,513 | $- | $(128) | $9,385
State and political subdivisions | 41,862 | 230 | (480) | 41,612
Other securities | 5,284 | 61 | (193) | 5,152
Mortgage-backed GSE residential | 92,708 | 1 | (2,533) | 90,176
Total investments and mortgage-backed securities | $149,367 | $292 | $(3,334) | $146,325
The amortized cost and estimated fair value of investment and mortgage-backed securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without penalties.
| September 30, 2018
| Amortized | Estimated
(dollars in thousands) | Cost | Fair Value
Within one year | $4,145 | $4,122
After one year but less than five years | 14,420 | 14,255
After five years but less than ten years | 19,505 | 19,327
After ten years | 16,798 | 16,456
Total investment securities | 54,868 | 54,160
Mortgage-backed securities | 93,177 | 90,465
Total investments and mortgage-backed securities | $148,045 | $144,625
The carrying value of investment and mortgage-backed securities pledged as collateral to secure public deposits and securities sold under agreements to repurchase amounted to $118.9 million at September 30, 2018 and $124.2 million at June 30, 2018. The securities pledged consist of marketable securities, including $6.1 million and $8.4 million of U.S. Government and Federal Agency Obligations, $38.7 million and $39.8 million of Mortgage-Backed Securities, $39.6 million and $41.5 million of Collateralized Mortgage Obligations, $34.2 million and $34.2 million of State and Political Subdivisions Obligations, and $300,000 and $300,000 of Other Securities at September 30 and June 30, 2018, respectively. The following tables show our investments’ 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 September 30 and June 30, 2018:
| September 30, 2018
| Less than 12 months | 12 months or more | Total
|  | Unrealized |  | Unrealized |  | Unrealized
| Fair Value | Losses | Fair Value | Losses | Fair Value | Losses
(dollars in thousands) |  |  |  |  |  |
U.S. government-sponsored enterprises (GSEs) | $4,710 | $61 | $3,426 | $72 | $8,136 | $133
Obligations of state and political subdivisions | 18,087 | 307 | 9,317 | 319 | 27,404 | 626
Other securities | 996 | 4 | 1,067 | 127 | 2,063 | 131
Mortgage-backed securities | 67,495 | 1,672 | 22,906 | 1,041 | 90,401 | 2,713
Total investments and mortgage-backed securities | $91,288 | $2,044 | $36,716 | $1,559 | $128,004 | $3,603
| June 30, 2018
| Less than 12 months | 12 months or more | Total
|  | Unrealized |  | Unrealized |  | Unrealized
| Fair Value | Losses | Fair Value | Losses | Fair Value | Losses
(dollars in thousands) |  |  |  |  |  |
U.S. government-sponsored enterprises (GSEs) | $5,957 | $58 | $3,427 | $70 | $9,384 | $128
Obligations of state and political subdivisions | 14,861 | 224 | 8,526 | 256 | 23,387 | 480
Other securities | 982 | 10 | 1,109 | 183 | 2,091 | 193
Mortgage-backed securities | 65,863 | 1,513 | 24,187 | 1,020 | 90,050 | 2,533
Total investments and mortgage-backed securities | $87,663 | $1,805 | $37,249 | $1,529 | $124,912 | $3,334
Other securities. At September 30, 2018, there were two pooled trust preferred securities with an estimated fair value of $850,000 and unrealized losses of $121,000 in a continuous unrealized loss position for twelve months or more. These unrealized losses were primarily due to the long-term nature of the pooled trust preferred securities and a reduced demand for these securities, and concerns regarding the financial institutions that issued the underlying trust preferred securities. Rules adopted by the federal banking agencies in December 2013 to implement Section 619 of the Dodd-Frank Act (the “Volcker Rule”) generally prohibit banking entities from engaging in proprietary trading and from investing in, sponsoring, or having certain relationships with a hedge fund or private equity fund. The pooled trust preferred securities owned by the Company were included in a January 2014 listing of securities which the agencies considered to be grandfathered with regard to these prohibitions; as such, banking entities are permitted to retain their interest in these securities, provided the interest was acquired on or before December 10, 2013, unless acquired pursuant to a merger or acquisition. The September 30, 2018, cash flow analysis for these two securities indicated it is probable the Company will receive all contracted principal and related interest projected. The cash flow analysis used in making this determination was based on anticipated default, recovery, and prepayment rates, and the resulting cash flows were discounted based on the yield spread anticipated at the time the securities were purchased. Other inputs include the actual collateral attributes, which include credit ratings and other performance indicators of the underlying financial institutions, including profitability, capital ratios, and asset quality. Assumptions for these two securities included prepayments averaging 1.4 percent, annually, annual defaults averaging 64 basis points, and a recovery rate averaging 6.9 percent of gross defaults, lagged two years. One of these two securities has continued to receive cash interest payments in full since our purchase; the other security received principal-in-kind (PIK), in lieu of cash interest, for a period of time following the recession and financial crisis which began in 2008, but resumed cash interest payments during fiscal 2014. Our cash flow analysis indicates that cash interest payments are expected to continue for the securities. Because 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 these securities prior to recovery of their amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2018. The Company does not believe any other individual unrealized loss as of September 30, 2018, represents OTTI. However, the Company could be required to recognize OTTI losses in future periods with respect to its available for sale investment securities portfolio. The amount and timing of any required OTTI will depend on the decline in the underlying cash flows of the securities. Should the impairment of any of these securities become other-than-temporary, the cost basis of the investment will be reduced and the resulting loss recognized in the period the other-than-temporary impairment is identified. Credit losses recognized on investments. During fiscal 2009, the Company adopted ASC 820, formerly FASB Staff Position 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly.” The following table provides information about the security for which only a credit loss was recognized in income and other losses are recorded in other comprehensive income (loss) for the years ended September 30, 2018 and 2017.
| Accumulated Credit Losses
| Three-Month Period Ended
(dollars in thousands) | September 30,
| 2018 | 2017
Credit losses on debt securities held |  |
Beginning of period | $- | $340
Additions related to OTTI losses not previously recognized | - | -
Reductions due to sales | - | -
Reductions due to change in intent or likelihood of sale | - | -
Additions related to increases in previously-recognized OTTI losses | - | -
Reductions due to increases in expected cash flows | - | (3)
End of period | $- | $337

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

X
- Definition Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets. + References No definition available. + Details
Name: | us-gaap_MarketableSecuritiesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration