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INVESTMENT SECURITIES
 12 Months Ended
Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]  
INVESTMENT SECURITIES

NOTE D - INVESTMENT SECURITIES

 

The amortized cost, gross unrealized gains or losses and fair value of the Company’s investment securities available-for-sale and held-to-maturity are as follows:

 

   September 30, 2018 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
   (In thousands) 
Securities available-for-sale:                    
Obligations of U.S. government agencies:                    
Mortgage backed securities - residential  $1,463   $40   $(8)  $1,495 
Obligations of U.S. government-sponsored enterprises:                    
Mortgage-backed securities-residential   19,262    13    (662)   18,613 
Debt securities   2,500    —    (139)   2,361 
            Total securities available for sale  $23,225   $53   $(809)  $22,469 

 

   September 30, 2018 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
   (In thousands) 
Securities held-to-maturity:                    
Obligations of U.S. government agencies:                    
Mortgage-backed securities - residential  $568   $—   $(93)  $475 
Mortgage-backed securities - commercial   904    —    (9)   895 
Obligations of U.S. government-sponsored enterprises:                    
Mortgage backed securities - residential   26,316    4    (867)   25,453 
Debt securities   2,464    —    (142)   2,322 
Private label mortgage-backed securities - residential   393    1    —    394 
Corporate securities   3,000    —    (388)   2,612 
            Total securities held to maturity  $33,645   $5   $(1,499)  $32,151 

 

   At September 30, 2017 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
   (In thousands) 
Securities available-for-sale:                
Obligations of U.S. government-sponsored enterprises:            
Mortgage-backed securities-residential  $9,442   $9   $(125)  $9,326 
Debt securities   2,500    —    (51)   2,449 
Private label mortgage-backed securities-residential   40    —    —    40 
            Total securities available-for-sale  $11,982   $9   $(176)  $11,815 

 

 

   At September 30, 2017 
       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
   (In thousands) 
Securities held-to-maturity:                    
Obligations of U.S. government agencies:                    
Mortgage-backed securities - residential  $3,466   $123   $(96)  $3,493 
Mortgage-backed securities - commercial   968    —    (10)   958 
Obligations of U.S. government-sponsored enterprises:                    
Mortgage backed securities - residential   39,016    349    (251)   39,114 
Debt securities   4,461    —    (24)   4,437 
Private label mortgage-backed securities - residential   457    —    (2)   455 
Corporate securities   3,000    —    (216)   2,784 
            Total securities held-to-maturity  $51,368   $472   $(599)  $51,241 

 

The contractual maturities of mortgage-backed securities generally exceed 10 years; however, the effective lives are expected to be shorter due to anticipated prepayments. The amortized cost and fair value of the Company’s securities available-for-sale at September 30, 2018 are summarized in the following table:

 

   September 30, 2018 
   (In thousands) 
   Amortized   Fair 
   Cost   Value 
Due within 1 year  $—   $— 
Due after 1 but within 5 years   1,500    1,411 
Due after 5 but within 10 years   1,000    950 
Due after 10 years   —    — 
        Total debt securities   2,500    2,361 
           
Mortgage-backed securities:          
Residential(1)   20,725    20,108 
Commercial   —    — 
        Total  $23,225   $22,469 

 

 

 

(1)Available-for-sale mortgage-backed securities – residential include an amortized cost of $1.5 million and a fair value of $1.5 million for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $19.3 million and a fair value of $18.6 million. There were no residential mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises.

 

The maturities of the debt securities and the mortgage-backed securities held to maturity at September 30, 2018 are summarized in the following table:

 

   September 30, 2018 
   Amortized   Fair 
   Cost   Value 
   (In thousands) 
Due within 1 year  $—   $— 
Due after 1 but within 5 years   1,499    1,446 
Due after 5 but within 10 years   3,000    2,612 
Due after 10 years   965    876 
        Total debt securities   5,464    4,934 
           
Mortgage backed securities:          
Residential(1)   27,277    26,322 
Commercial(2)   904    895 
        Total  $33,645   $32,151 

 

 

(1)Held-to-maturity mortgage-backed securities – residential include an amortized cost of $568,000 and a fair value of $475,000 for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $26.3 million and a fair value of $25.5 million. Also included are mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises with an amortized cost of $393,000 and a fair value of $394,000.

 

(2)Held-to-maturity mortgage-backed securities – commercial include an amortized cost of $904,000 and a fair value of $895,000 for obligations of U.S. government agencies issued by the Small Business Administration.

 

There were no sales of securities from the available-for-sale portfolios during the year ended September 30, 2018 and 2017.

 

There were $3.4 million sales of securities from the held-to-maturity portfolios during the year ended September 30, 2018 and there were no sales from the held-to-maturity portfolios during the year ended September 30, 2017. In accordance with ASC 320 “Investments- Debt and Equity Securities”, sales from the held to maturity portfolio occurred after the Company had already collected a substantial portion (at least 85 percent) of the principal outstanding at acquisition due to prepayments on the debt security. The net gain on sales of held-to-maturity securities totaled $107,000 for the year ended September 30, 2018.

 

As of September 30, 2018 and 2017, securities having an estimated fair value of approximately $25.0 million and $21.8 million, respectively, were pledged to secure public deposits.

 

Details of securities with unrealized losses at September 30, 2018 and 2017 are as follows:

 

       September 30, 2018 
       Less Than 12 Months   12 Months Or Greater   Total 
   Number of   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
   Securities   Value   Losses   Value   Losses   Value   Losses 
       (Dollars in thousands) 
Obligations of U.S. government agencies:                            
Mortgage-backed securities - residential   3   $532   $(8)  $475   $(93)  $1,007   $(101)
Mortgage-backed securities - commercial   1    —    —    895    (9)   895    (9)
Obligations of U.S. government-sponsored enterprises                                   
Mortgage-backed securities - residential   34    11,336    (312)   30,605    (1,217)   41,941    (1,529)
Debt securities   4    —    —    4,683    (281)   4,683    (281)
Private label mortgage-backed securities residential   1    —    —    104    —    104    — 
Corporate securities   1    —    —    2,612    (388)   2,612    (388)
        Total   44   $11,868   $(320)  $39,374   $(1,988)  $51,242   $(2,308)

 

 

       September 30, 2017 
       Less Than 12 Months   12 Months Or Greater   Total 
   Number of   Fair   Unrealized   Fair   Unrealized   Fair   Unrealized 
   Securities   Value   Losses   Value   Losses   Value   Losses 
       (Dollars in thousands) 
Obligations of U.S. government agencies:                            
Mortgage-backed securities- residential   2   $—   $—   $605   $(96)  $605   $(96)
Mortgage-backed securities - commercial   1    958    (10)   —    —    958    (10)
Obligations of U.S. government-sponsored enterprises                                   
Mortgage backed securities- residential   20    6,582    (92)   21,713    (284)   28,295    (376)
Debt securities   5    4,890    (71)   1,996    (4)   6,886    (75)
Private label mortgage-backed securities- residential   2    —    —    193    (2)   193    (2)
Corporate securities   1    —    —    2,784    (216)   2,784    (216)
        Total   31   $12,430   $(173)  $27,291   $(602)  $39,721   $(775)

 

The investment securities listed above currently have fair values less than amortized cost and therefore contain unrealized losses. The Company evaluated these securities and determined that the decline in value was primarily related to fluctuations in the interest rate environment and were not related to any company or industry specific event.

 

The Company anticipates full recovery of amortized costs with respect to these securities. The Company does not intend to sell these securities and has determined that it is not more likely than not that the Company would be required to sell these securities prior to maturity or market price recovery. Management has considered factors regarding other than temporarily impaired securities and determined that there are no securities with impairment that is other than temporary as of September 30, 2018 and 2017.