Securities

12 Months Ended

Sep. 30, 2020

SECURITIES

The following tables reflect the amortized cost, estimated fair value, and gross unrealized gains and losses of AFS securities at the dates presented. The majority of the MBS and investment securities portfolios are composed of securities issued by GSEs.


	September 30, 2020
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)

MBS	$	1,149,922	$	31,212	$	331	$	1,180,803
GSE debentures	369,967		414		41		370,340

Municipal bonds	9,716		91		—		9,807
	$	1,529,605	$	31,717	$	372	$	1,560,950


	September 30, 2019
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)

MBS	$	923,256	$	15,571	$	2,340	$	936,487
GSE debentures	249,828		304		178		249,954

Municipal bonds	18,371		52		1		18,422
	$	1,191,455	$	15,927	$	2,519	$	1,204,863

The following tables summarize the estimated fair value and gross unrealized losses of those AFS 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.


	September 30, 2020
	Less Than 12 Months				Equal to or Greater Than 12 Months
	Estimated		Unrealized		Estimated		Unrealized
	Fair Value		Losses		Fair Value		Losses
	(Dollars in thousands)

MBS	$	207,071	$	330	$	118	$	1
GSE debentures	74,959		41		—		—

Municipal bonds	—		—		—		—
	$	282,030	$	371	$	118	$	1


	September 30, 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)

MBS	$	111,368	$	126	$	199,442	$	2,214
GSE debentures	—		—		74,812		178

Municipal bonds	1,755		1		—		—
	$	113,123	$	127	$	274,254	$	2,392

The unrealized losses at September 30, 2020 and 2019 were 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 market yields 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 September 30, 2020 or 2019. See "Note 1. Summary of Significant Accounting Policies - Securities" for additional information regarding our impairment review and classification process for securities.

The amortized cost and estimated fair value of AFS debt securities as of September 30, 2020, 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.



	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
One year or less	$	3,987	$	4,009
One year through five years	375,696		376,138


	379,683		380,147
MBS	1,149,922		1,180,803
	$	1,529,605	$	1,560,950

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


	For the Year Ended September 30,
	2020		2019		2018
	(Dollars in thousands)
Taxable	$	4,242	$	6,020	$	4,275
Non-taxable	225		346		395
	$	4,467	$	6,366	$	4,670

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


	September 30,
	2020		2019
	(Dollars in thousands)
Public unit deposits	$	330,986	$	381,143
FRB of Kansas City	259,851		6,636
Repurchase agreements	—		108,271

	$	590,837	$	496,050

During fiscal year 2018, the Company sold trust preferred securities and received proceeds of $2.1 million. The Company recognized a gain of $9 thousand on the sale. All other dispositions of securities during fiscal years 2020, 2019, and 2018 were the result of principal repayments, calls, or maturities.