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MBS And Other Investments | 3 Months Ended
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Dec. 31, 2015
Investments [Abstract] |
MBS And Other Investments | have been classified according to management’s intent and were as follows as of December 31, 2015 and September 30, 2015 (dollars in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
December 31, 2015 |  |  |  |  |  |  |
Held to maturity |  |  |  |  |  |  |
Mortgage-backed securities ("MBS"): |  |  |  |  |  |  |
U.S. government agencies | $ | 786 |  |  | $ | 23 |  |  | $ | (1 | ) |  | $ | 808 |
Private label residential | 1,033 |  |  | 850 |  |  | (5 | ) |  | 1,878 |
U.S. Treasury and U.S government agency securities | 6,005 |  |  | 19 |  |  | (25 | ) |  | 5,999 |
Total | $ | 7,824 |  |  | $ | 892 |  |  | $ | (31 | ) |  | $ | 8,685 |
Available for sale |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 374 |  |  | $ | 28 |  |  | $ | (1 | ) |  | $ | 401 |
Mutual funds | 1,000 |  |  | — |  |  | (39 | ) |  | 961 |
Total | $ | 1,374 |  |  | $ | 28 |  |  | $ | (40 | ) |  | $ | 1,362 |
September 30, 2015 |  |  |  |  |  |  |
Held to maturity |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 828 |  |  | $ | 23 |  |  | $ | (1 | ) |  | $ | 850 |
Private label residential | 1,081 |  |  | 894 |  |  | (12 | ) |  | 1,963 |
U.S. Treasury and U.S. government agency securities | 6,004 |  |  | 77 |  |  | — |  |  | 6,081 |
Total | $ | 7,913 |  |  | $ | 994 |  |  | $ | (13 | ) |  | $ | 8,894 |
Available for sale |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 387 |  |  | $ | 34 |  |  | $ | — |  |  | $ | 421 |
Mutual funds | 1,000 |  |  | — |  |  | (29 | ) |  | 971 |
Total | $ | 1,387 |  |  | $ | 34 |  |  | $ | (29 | ) |  | $ | 1,392 |
The following table summarizes the estimated fair value and gross unrealized losses for all securities and the length of time these unrealized losses existed as of December 31, 2015 (dollars in thousands):
| Less Than 12 Months |  | 12 Months or Longer |  | Total
| Estimated Fair Value |  | Gross Unrealized Losses |  | Quantity |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Quantity |  | Estimated Fair Value |  | Gross Unrealized Losses
Held to maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 106 |  |  | $ | — |  |  | 3 |  |  | $ | 61 |  |  | $ | (1 | ) |  | 4 |  |  | $ | 167 |  |  | $ | (1 | )
Private label residential | 42 |  |  | — |  |  | 2 |  |  | 155 |  |  | (5 | ) |  | 11 |  |  | 197 |  |  | (5 | )
U.S. Treasury and U.S. government agency securities | 2,964 |  |  | (25 | ) |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 2,964 |  |  | (25 | )
Total | $ | 3,112 |  |  | $ | (25 | ) |  | 6 |  |  | $ | 216 |  |  | $ | (6 | ) |  | 15 |  |  | $ | 3,328 |  |  | $ | (31 | )
Available for sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | — |  |  | $ | — |  |  | — |  |  | $ | 36 |  |  | $ | (1 | ) |  | 1 |  |  | $ | 36 |  |  | $ | (1 | )
Mutual funds | — |  |  | — |  |  | — |  |  | 961 |  |  | (39 | ) |  | 1 |  |  | 961 |  |  | (39 | )
Total | $ | — |  |  | $ | — |  |  | — |  |  | $ | 997 |  |  | $ | (40 | ) |  | 2 |  |  | $ | 997 |  |  | $ | (40 | )
The following table summarizes the estimated fair value and gross unrealized losses for all securities and the length of time these unrealized losses existed as of September 30, 2015 (dollars in thousands):
| Less Than 12 Months |  | 12 Months or Longer |  | Total
| Estimated Fair Value |  | Gross Unrealized Losses |  | Quantity |  | Estimated Fair Value |  | Gross Unrealized Losses |  | Quantity |  | Estimated Fair Value |  | Gross Unrealized Losses
Held to maturity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 49 |  |  | $ | — |  |  | 4 |  |  | $ | 63 |  |  | $ | (1 | ) |  | 5 |  |  | $ | 112 |  |  | $ | (1 | )
Private label residential | 1 |  |  | — |  |  | 1 |  |  | 157 |  |  | (12 | ) |  | 11 |  |  | 158 |  |  | (12 | )
Total | $ | 50 |  |  | $ | — |  |  | 5 |  |  | $ | 220 |  |  | $ | (13 | ) |  | 16 |  |  | $ | 270 |  |  | $ | (13 | )
Available for sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 1 |  |  | $ | — |  |  | 1 |  |  | $ | 48 |  |  | $ | — |  |  | 2 |  |  | $ | 49 |  |  | $ | — |
Mutual funds | — |  |  | — |  |  | — |  |  | 971 |  |  | (29 | ) |  | 1 |  |  | 971 |  |  | (29 | )
Total | $ | 1 |  |  | $ | — |  |  | 1 |  |  | $ | 1,019 |  |  | $ | (29 | ) |  | 3 |  |  | $ | 1,020 |  |  | $ | (29 | )
The Company has evaluated these securities and has determined that the decline in their value is temporary. The unrealized losses are primarily due to changes in market interest rates and spreads in the market for mortgage-related products. The fair value of these securities is expected to recover as the securities approach their maturity dates and/or as the pricing spreads narrow on mortgage-related securities. The Company has the ability and the intent to hold the investments until the market value recovers. Furthermore, as of December 31, 2015, management does not have the intent to sell any of the securities classified as available for sale where the estimated fair value is below the recorded value and believes that it is more likely than not that the Company will not have to sell such securities before a recovery of cost or recorded value if previously written down. In accordance with GAAP, the Company bifurcates OTTI into (1) amounts related to credit losses which are recognized through earnings and (2) amounts related to all other factors which are recognized as a component of other comprehensive income (loss). To determine the component of the gross OTTI related to credit losses, the Company compared the amortized cost basis of the OTTI security to the present value of its revised expected cash flows, discounted using its pre-impairment yield. The revised expected cash flow estimates for individual securities are based primarily on an analysis of default rates, prepayment speeds and third-party analytic reports. Significant judgment by management is required in this analysis that includes, but is not limited to, assumptions regarding the collectability of principal and interest, net of related expenses, on the underlying loans. The following table presents a summary of the significant inputs utilized to measure management’s estimate of the credit loss component on OTTI securities as of December 31, 2015 and September 30, 2015:
| Range |  | Weighted
| Minimum |  | Maximum |  | Average
December 31, 2015 |  |  |  |  |
Constant prepayment rate | 6.00 | % |  | 15.00 | % |  | 9.63 | %
Collateral default rate | 0.11 | % |  | 15.97 | % |  | 5.33 | %
Loss severity rate | 1.00 | % |  | 77.00 | % |  | 40.54 | %
September 30, 2015 |  |  |  |  |
Constant prepayment rate | 6.00 | % |  | 15.00 | % |  | 11.49 | %
Collateral default rate | 0.16 | % |  | 14.65 | % |  | 6.08 | %
Loss severity rate | 3.92 | % |  | 65.00 | % |  | 39.83 | %
The following table presents the OTTI for the three months ended December 31, 2015 and 2014 (dollars in thousands):
| Three Months Ended December 31, 2015 |  | Three Months Ended December 31, 2014
| Held To Maturity |  | Available For Sale |  | Held To Maturity |  | Available For Sale
Total OTTI | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Adjustment for portion of OTTI recorded as (transfered from) other comprehensive income (loss) before income taxes (1) | — |  |  | — |  |  | — |  |  | — |
Net OTTI recognized in earnings (2) | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
________________________
(1) | Represents OTTI related to all other factors.
(2) | Represents OTTI related to credit losses.
The following table presents a roll forward of the credit loss component of held to maturity and available for sale debt securities that have been written down for OTTI with the credit loss component recognized in earnings for the three months ended December 31, 2015 and 2014 (dollars in thousands):
| Three Months Ended December 31,
| 2015 |  |  | 2014 |
Beginning balance of credit loss | $ | 1,576 |  |  | $ | 1,654 |
Subtractions: |  |  |  |
Realized losses previously recorded as credit losses | (28 | ) |  | (17 | )
Ending balance of credit loss | $ | 1,548 |  |  | $ | 1,637 |
There was no realized gain on the sale of investment securities for the three months ended December 31, 2015. There was a $45,000 realized gain on the sale of investment securities for the three months ended December 31, 2014. During the three months ended December 31, 2015, the Company recorded a $28,000 net realized loss (as a result of the securities being deemed worthless) on 14 held to maturity residential MBS, of which the entire amount had been recognized previously as a credit loss. During the three months ended December 31, 2014, the Company recorded a $17,000 net realized loss (as a result of the securities being deemed worthless) on 11 held to maturity residential MBS, of which the entire amount had been recognized previously as a credit loss. The recorded amount of residential MBS, treasury and agency securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $7,186,000 and $7,249,000 at December 31, 2015 and September 30, 2015, respectively. The contractual maturities of debt securities at December 31, 2015 were as follows (dollars in thousands). Expected maturities may differ from scheduled maturities as a result of the prepayment of principal or call provisions.
| Held to Maturity |  | Available for Sale
| Amortized Cost |  | Estimated Fair Value |  | Amortized Cost |  | Estimated Fair Value
Due within one year | $ | — |  |  | $ | — |  |  | $ | 8 |  |  | $ | 8 |
Due after one year to five years | 6,006 |  |  | 6,001 |  |  | — |  |  | — |
Due after five to ten years | 20 |  |  | 20 |  |  | — |  |  | — |
Due after ten years | 1,798 |  |  | 2,664 |  |  | 366 |  |  | 393 |
Total | $ | 7,824 |  |  | $ | 8,685 |  |  | $ | 374 |  |  | $ | 401 |

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