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Investment Securities | 9 Months Ended
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Jun. 30, 2017
Investments [Abstract] |
Investment Securities | INVESTMENT SECURITIES Held to maturity and available for sale investment securities have been classified according to management’s intent and were as follows as of June 30, 2017 and September 30, 2016 (dollars in thousands):
| Amortized Cost |  | Gross Unrealized Gains |  | Gross Unrealized Losses |  | Estimated Fair Value
June 30, 2017 |  |  |  |  |  |  |
Held to maturity |  |  |  |  |  |  |
Mortgage-backed securities ("MBS"): |  |  |  |  |  |  |
U.S. government agencies | $ | 565 |  |  | $ | 12 |  |  | $ | (1 | ) |  | $ | 576 |
Private label residential | 671 |  |  | 651 |  |  | (4 | ) |  | 1,318 |
U.S. Treasury and U.S government agency securities | 6,008 |  |  | 16 |  |  | (6 | ) |  | 6,018 |
Total | $ | 7,244 |  |  | $ | 679 |  |  | $ | (11 | ) |  | $ | 7,912 |
Available for sale |  |  |  |  |  |  |  |  |  |  |
MBS: U.S. government agencies | $ | 288 |  |  | $ | 21 |  |  | $ | — |  |  | $ | 309 |
Mutual funds | 1,000 |  |  | — |  |  | (49 | ) |  | 951 |
Total | $ | 1,288 |  |  | $ | 21 |  |  | $ | (49 | ) |  | $ | 1,260 |
September 30, 2016 |  |  |  |  |  |  |
Held to maturity |  |  |  |  |  |  |  |  |  |  |
MBS: |  |  |  |  |  |  |  |  |  |  |
U.S. government agencies | $ | 670 |  |  | $ | 18 |  |  | $ | (1 | ) |  | $ | 687 |
Private label residential | 835 |  |  | 762 |  |  | (2 | ) |  | 1,595 |
U.S. Treasury and U.S. government agency securities | 6,006 |  |  | 107 |  |  | — |  |  | 6,113 |
Total | $ | 7,511 |  |  | $ | 887 |  |  | $ | (3 | ) |  | $ | 8,395 |
Available for sale |  |  |  |  |  |  |  |  |  |  |
MBS: U.S. government agencies | $ | 336 |  |  | $ | 30 |  |  | $ | — |  |  | $ | 366 |
Mutual funds | 1,000 |  |  | — |  |  | (24 | ) |  | 976 |
Total | $ | 1,336 |  |  | $ | 30 |  |  | $ | (24 | ) |  | $ | 1,342 |
Held to maturity and available for sale investment securities with unrealized losses were as follows for June 30, 2017 (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 | $ | 46 |  |  | $ | (1 | ) |  | 2 |  |  | $ | 81 |  |  | $ | — |  |  | 5 |  |  | $ | 127 |  |  | $ | (1 | )
Private label residential | 21 |  |  | (1 | ) |  | 2 |  |  | 92 |  |  | (3 | ) |  | 11 |  |  | 113 |  |  | (4 | )
U.S. Treasury and U.S. government agency securities | 2,987 |  |  | (6 | ) |  | 1 |  |  | — |  |  | — |  |  | — |  |  | 2,987 |  |  | (6 | )
Total | $ | 3,054 |  |  | $ | (8 | ) |  | 5 |  |  | $ | 173 |  |  | $ | (3 | ) |  | 16 |  |  | $ | 3,227 |  |  | $ | (11 | )
Available for sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds | $ | — |  |  | $ | — |  |  | — |  |  | $ | 951 |  |  | $ | (49 | ) |  | 1 |  |  | $ | 951 |  |  | $ | (49 | )
Total | $ | — |  |  | $ | — |  |  | — |  |  | $ | 951 |  |  | $ | (49 | ) |  | 1 |  |  | $ | 951 |  |  | $ | (49 | )
Held to maturity and available for sale investment securities with unrealized losses were as follows for September 30, 2016 (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 | $ | 9 |  |  | $ | — |  |  | 1 |  |  | $ | 96 |  |  | $ | (1 | ) |  | 5 |  |  | $ | 105 |  |  | $ | (1 | )
Private label residential | 1 |  |  | — |  |  | 1 |  |  | 112 |  |  | (2 | ) |  | 10 |  |  | 113 |  |  | (2 | )
Total | $ | 10 |  |  | $ | — |  |  | 2 |  |  | $ | 208 |  |  | $ | (3 | ) |  | 15 |  |  | $ | 218 |  |  | $ | (3 | )
Available for sale |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mutual funds | $ | — |  |  | $ | — |  |  | — |  |  | $ | 976 |  |  | $ | (24 | ) |  | 1 |  |  | $ | 976 |  |  | $ | (24 | )
Total | $ | — |  |  | $ | — |  |  | — |  |  | $ | 976 |  |  | $ | (24 | ) |  | 1 |  |  | $ | 976 |  |  | $ | (24 | )
The Company has evaluated the investment securities in the above tables 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 June 30, 2017, 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 estimates of the credit loss component on OTTI securities as of June 30, 2017 and 2016:
| Range |  | Weighted
| Minimum |  | Maximum |  | Average
June 30, 2017 |  |  |  |  |
Constant prepayment rate | 6.00 | % |  | 15.00 | % |  | 11.54 | %
Collateral default rate | 0.09 | % |  | 9.88 | % |  | 4.66 | %
Loss severity rate | 6.00 | % |  | 62.00 | % |  | 41.93 | %
June 30, 2016 |  |  |  |  |
Constant prepayment rate | 6.00 | % |  | 15.00 | % |  | 11.17 | %
Collateral default rate | 0.06 | % |  | 15.44 | % |  | 5.50 | %
Loss severity rate | 1.00 | % |  | 75.00 | % |  | 41.23 | %
The following table presents the OTTI for the three and nine months ended June 30, 2017 and 2016 (dollars in thousands):
| Three Months Ended June 30, 2017 |  | Three Months Ended June 30, 2016
| Held To Maturity |  | Available For Sale |  | Held To Maturity |  | Available For Sale
Total OTTI | $ | — |  |  | $ | — |  |  | $ | (4 | ) |  | $ | — |
Adjustment for portion of OTTI recorded as other comprehensive income before income taxes (1) | — |  |  | — |  |  | — |  |  | — |
Net OTTI recognized in earnings (2) | $ | — |  |  | $ | — |  |  | $ | (4 | ) |  | $ | — |
| Nine Months Ended June 30, 2017 |  | Nine Months Ended June 30, 2016
| Held To Maturity |  | Available For Sale |  | Held To Maturity |  | Available For Sale
Total OTTI | $ | — |  |  | $ | — |  |  | $ | (27 | ) |  | $ | — |
Adjustment for portion of OTTI transferred from other comprehensive income before income taxes (1) | — |  |  | — |  |  | (1 | ) |  | — |
Net OTTI recognized in earnings (2) | $ | — |  |  | $ | — |  |  | $ | (28 | ) |  | $ | — |
_________________ (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 nine months ended June 30, 2017 and 2016 (dollars in thousands):
| Nine Months Ended June 30,
| 2017 |  |  | 2016 |
Beginning balance of credit loss | $ | 1,505 |  |  | $ | 1,576 |
Additions: |  |  |  |  |
Additional increases to the amount related to credit loss for which OTTI was previously recognized | — |  |  | 22 |
Subtractions: |  |  |  |
Realized losses previously recorded as credit losses | (48 | ) |  | (74 | )
Ending balance of credit loss | $ | 1,457 |  |  | $ | 1,524 |
During the three months ended June 30, 2017, the Company recorded a $12,000 net realized loss (as a result of the securities being deemed worthless) on 15 held to maturity residential MBS, of which the entire amount had been recognized previously as a credit loss. During the nine months ended June 30, 2017, the Company recorded a $48,000 net realized loss (as a result of securities being deemed worthless) on 18 held to maturity residential MBS, of which the entire amount had been previously recognized as a credit loss. During the three months ended June 30, 2016, the Company recorded a $17,000 net realized loss (as a result of the securities being deemed worthless) on 13 held to maturity residential MBS, of which $15,000 had been recognized previously as a credit loss. During the nine months ended June 30, 2016, the Company recorded a $81,000 net realized loss (as a result of securities being deemed worthless) on 16 held to maturity residential MBS, of which $74,000 had been previously recognized 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 $6.88 million and $7.04 million at June 30, 2017 and September 30, 2016, respectively. The contractual maturities of debt securities at June 30, 2017 were as follows (dollars in thousands). Expected maturities may differ from scheduled maturities due to 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 | $ | 14 |  |  | $ | 14 |  |  | $ | — |  |  | $ | — |
Due after one year to five years | 5,995 |  |  | 6,005 |  |  | — |  |  | — |
Due after five to ten years | 14 |  |  | 14 |  |  | — |  |  | — |
Due after ten years | 1,221 |  |  | 1,879 |  |  | 288 |  |  | 309 |
Total | $ | 7,244 |  |  | $ | 7,912 |  |  | $ | 288 |  |  | $ | 309 |

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- Definition The entire disclosure for investments in certain debt and equity securities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 320 -URI http://asc.fasb.org/topic&trid=2196928 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=4738149 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 940 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2176304 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2324412 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2209399 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 954 -SubTopic 320 -URI http://asc.fasb.org/subtopic&trid=2289146 + Details
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