Securities

6 Months Ended

Mar. 31, 2019

SECURITIES

The following tables reflect the amortized cost, estimated fair value, and gross unrealized gains and losses of AFS and HTM securities at the dates presented. The majority of the MBS and investment securities portfolios are composed of securities issued by United States government-sponsored enterprises ("GSEs").



	March 31, 2019
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
MBS	$	469,455	$	5,995	$	606	$	474,844
GSE debentures	268,375		274		908		267,741
Municipal bonds	4,145		3		5		4,143
	$	741,975	$	6,272	$	1,519	$	746,728
HTM:
MBS	$	510,450	$	5,107	$	6,461	$	509,096
Municipal bonds	17,010		19		26		17,003
	$	527,460	$	5,126	$	6,487	$	526,099



	September 30, 2018
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)
AFS:
MBS	$	445,883	$	3,270	$	4,063	$	445,090
GSE debentures	268,525		30		3,157		265,398
Municipal bonds	4,156		—		30		4,126
	$	718,564	$	3,300	$	7,250	$	714,614
HTM:
MBS	$	591,900	$	4,514	$	15,589	$	580,825
Municipal bonds	20,418		—		172		20,246
	$	612,318	$	4,514	$	15,761	$	601,071

The following tables summarize the estimated fair value and gross unrealized losses of those securities on which an unrealized loss at the dates presented was reported and the continuous unrealized loss position for less than 12 months and equal to or greater than 12 months as of the dates presented.



	March 31, 2019
	Less Than 12 Months				Equal to or Greater Than 12 Months
	Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)
AFS:
MBS	$	11,197	$	55	$	67,001	$	551
GSE debentures	27,776		3		99,077		905
Municipal bonds	—		—		1,510		5
	$	38,973	$	58	$	167,588	$	1,461


HTM:
MBS	$	1,551	$	2	$	331,809	$	6,459
Municipal bonds	330		2		7,977		24
	$	1,881	$	4	$	339,786	$	6,483



	September 30, 2018
	Less Than 12 Months				Equal to or Greater Than 12 Months
	Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)
AFS:
MBS	$	324,563	$	3,797	$	8,129	$	266
GSE debentures	101,735		1,231		148,049		1,926
Municipal bonds	4,126		30		—		—
	$	430,424	$	5,058	$	156,178	$	2,192


HTM:
MBS	$	58,233	$	904	$	362,806	$	14,685
Municipal bonds	18,345		171		685		1
	$	76,578	$	1,075	$	363,491	$	14,686

The unrealized losses at March 31, 2019 and September 30, 2018 were primarily a result of an increase in market yields from the time the securities were purchased. In general, as market yields rise, the fair value of securities will decrease; as market yields fall, the fair value of securities will increase. Management generally views changes in fair value caused by changes in interest rates as temporary. Therefore, these securities have not been classified as other-than-temporarily impaired. The impairment is also considered temporary because scheduled coupon payments have been made, it is anticipated that the entire principal balance will be collected as scheduled, and management neither intends to sell the securities, nor is it more likely than not that the Company will be required to sell the securities, before the recovery of the remaining amortized cost amount, which could be at maturity. As a result of the analysis, management has concluded that no other-than-temporary impairments existed at March 31, 2019 or September 30, 2018.

The amortized cost and estimated fair value of debt securities as of March 31, 2019, by contractual maturity, are shown below. Actual principal repayments may differ from contractual maturities due to prepayment or early call privileges by the issuer. In the case of MBS, borrowers on the underlying loans generally have the right to prepay their loans without prepayment penalty. For this reason, MBS are not included in the maturity categories.



	AFS				HTM
	Amortized		Estimated		Amortized		Estimated
	Cost		Fair Value		Cost		Fair Value
	(Dollars in thousands)
One year or less	$	5,400	$	5,398	$	3,842	$	3,837
One year through five years	267,120		266,486		13,168		13,166
	272,520		271,884		17,010		17,003
MBS	469,455		474,844		510,450		509,096
	$	741,975	$	746,728	$	527,460	$	526,099

The following table presents the taxable and non-taxable components of interest income on investment securities for the periods presented.



	For the Three Months Ended				For the Six Months Ended
	March 31,				March 31,
	2019		2018		2019		2018
	(Dollars in thousands)
Taxable	$	1,419	$	998	$	2,767	$	1,878
Non-taxable	86		96		179		210
	$	1,505	$	1,094	$	2,946	$	2,088

The following table summarizes the carrying value of securities pledged as collateral for the obligations indicated below as of the dates presented.



	March 31, 2019		September 30, 2018
	(Dollars in thousands)
Public unit deposits	$	467,812	$	515,553
Repurchase agreements	107,862		108,360
Federal Reserve Bank of Kansas City ("FRB of Kansas City")	7,979		9,529
	$	583,653	$	633,442