Investment Securities (Tables)

9 Months Ended

Jun. 30, 2019

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, 2019 and September 30, 2018 (dollars in thousands):



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
June 30, 2019
Held to maturity
Mortgage-backed securities ("MBS"):
U.S. government agencies	$	29,305	$	966	$	(2	)	$	30,269
Private label residential	345		499		(2		)	842
U.S. Treasury and U.S government agency securities	7,995		—		(15		)	7,980
Total	$	37,645	$	1,465	$	(19	)	$	39,091

Available for sale
MBS: U.S. government agencies	$	2,013	$	22	$	(7	)	$	2,028
Total	$	2,013	$	22	$	(7	)	$	2,028

September 30, 2018
Held to maturity
MBS:
U.S. government agencies	$	1,385	$	8	$	(21	)	$	1,372
Private label residential	460		552		(2		)	1,010
U.S. Treasury and U.S. government agency securities	10,965		—		(83		)	10,882
Total	$	12,810	$	560	$	(106	)	$	13,264

Available for sale
MBS: U.S. government agencies	$	231	$	7	$	(1	)	$	237
Mutual funds	1,000		—		(83		)	917
Total	$	1,231	$	7	$	(84	)	$	1,154

Unrealized Gain (Loss) on Investments

Held to maturity and available for sale investment securities with unrealized losses were as follows as of June 30, 2019 (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	$	64	$	(1	)	2	$	53	$	(1	)	5	$	117	$	(2	)
Private label residential	2		—			1	38		(2		)	7	40		(2		)
U.S. Treasury and U.S. government agency securities	4,996		(1		)	1	2,984		(14		)	1	7,980		(15		)
Total	$	5,062	$	(2	)	4	$	3,075	$	(17	)	13	$	8,137	$	(19	)

Available for sale
MBS: U.S. government agencies	$	1,074	$	(7	)	1	$	—	$	—		—	$	1,074	$	(7	)
Total	$	1,074	$	(7	)	1	$	—	$	—		—	$	1,074	$	(7	)

Held to maturity and available for sale investment securities with unrealized losses were as follows as of September 30, 2018 (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	$	954	$	(20	)	2	$	64	$	(1	)	5	$	1,018	$	(21	)
Private label residential	—		—			—	50		(2		)	8	50		(2		)
U.S. Treasury and U.S. government agency securities	7,946		(22		)	2	2,935		(61		)	1	10,881		(83		)
Total	$	8,900	$	(42	)	4	$	3,049	$	(64	)	14	$	11,949	$	(106	)

Available for sale
MBS:
U.S. government agencies	$	34	$	(1	)	1	$	—	$	—		—	$	34	$	(1	)
Mutual funds	—		—			—	917		(83		)	1	917		(83		)
Total	$	34	$	(1	)	1	$	917	$	(83	)	1	$	951	$	(84	)

Schedule of Significant Inputs Utilized to Measure Estimate of Credit Loss Component on OTTI Securities

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, 2019 and 2018:



	Range				Weighted
	Minimum		Maximum		Average
June 30, 2019
Constant prepayment rate	6.00	%	15.00	%	11.52	%
Collateral default rate	—	%	11.28	%	5.28	%
Loss severity rate	—	%	78.00	%	37.73	%

June 30, 2018
Constant prepayment rate	6.00	%	15.00	%	11.58	%
Collateral default rate	—	%	12.31	%	5.51	%
Loss severity rate	—	%	74.00	%	42.49	%

Other than Temporary Impairment, Credit Losses Recognized in Earnings

The following table presents the OTTI recoveries (losses) for the three and nine months ended June 30, 2019 and 2018 (dollars in thousands):




	Three Months Ended June 30, 2019				Three Months Ended June 30, 2018
	Held To Maturity		Available For Sale		Held To Maturity		Available For Sale
Total recoveries	$	14	$	—	$	19	$	—
Adjustment for portion of OTTI transferred from other comprehensive income (loss) before income taxes (1)	—		—		—		—
Net recoveries recognized in earnings (2)	$	14	$	—	$	19	$	—



	Nine Months Ended June 30, 2019					Nine Months Ended June 30, 2018
	Held To Maturity			Available For Sale		Held To Maturity			Available For Sale
Total recoveries	$	46		$	—	$	60		$	—
Adjustment for portion of OTTI transferred from other comprehensive income (loss) before income taxes (1)	(12		)	—		(5		)	—
Net recoveries recognized in earnings (2)	$	34		$	—	$	55		$	—

_________________

(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, 2019 and 2018 (dollars in thousands):



	Nine Months Ended June 30,
	2019			2018
Beginning balance of credit loss	$	1,153		$	1,301
Additions:
Additional increases to the amount related to credit loss for which OTTI was previously recognized	13			14
Subtractions:
Realized losses previously recorded as credit losses	(16		)	(69		)
Recovery of prior credit loss	(47		)	(55		)
Ending balance of credit loss	$	1,103		$	1,191

Schedule of Contractual Maturities of Debt Securities

The contractual maturities of debt securities at June 30, 2019 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	$	8,034	$	8,019	$	—	$	—
Due after one year to five years	1,028		1,032		156		156
Due after five years to ten years	5,945		6,245		188		189
Due after ten years	22,638		23,795		1,669		1,683
Total	$	37,645	$	39,091	$	2,013	$	2,028