Securities

9 Months Ended

Jun. 30, 2023

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 United States Government-Sponsored Enterprises ("GSEs").


	June 30, 2023
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)

MBS	$	1,099,824	$	66	$	135,171	$	964,719
GSE debentures	519,983		—		44,224		475,759
Corporate bonds	4,000		—		623		3,377
Municipal bonds	1,030		—		18		1,012
	$	1,624,837	$	66	$	180,036	$	1,444,867


	September 30, 2022
			Gross		Gross		Estimated
	Amortized		Unrealized		Unrealized		Fair
	Cost		Gains		Losses		Value
	(Dollars in thousands)

MBS	$	1,243,270	$	365	$	155,011	$	1,088,624
GSE debentures	519,977		—		50,150		469,827
Corporate bonds	4,000		—		305		3,695
Municipal bonds	1,243		—		82		1,161
	$	1,768,490	$	365	$	205,548	$	1,563,307

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.


	June 30, 2023
	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	$	74,190	$	2,282	$	877,286	$	132,889
GSE debentures	—		—		475,759		44,224
Corporate bonds	1,723		277		1,654		346
Municipal bonds	1,012		18		—		—
	$	76,925	$	2,577	$	1,354,699	$	177,459


	September 30, 2022
	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	$	338,013	$	22,563	$	715,281	$	132,448
GSE debentures	—		—		469,827		50,150
Corporate bonds	3,695		305		—		—
Municipal bonds	1,161		82		—		—
	$	342,869	$	22,950	$	1,185,108	$	182,598

The unrealized losses at June 30, 2023 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 did not record an ACL on securities in an unrealized loss position at June 30, 2023 because scheduled coupon payments have been made, management anticipates that the entire principal balance will be collected as scheduled, and neither does the Company intend 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.

The amortized cost and estimated fair value of AFS debt securities as of June 30, 2023, 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 penalty. For this reason, MBS are not included in the maturity categories.



	Amortized		Estimated
	Cost		Fair Value
	(Dollars in thousands)
One year or less	$	25,000	$	24,501
One year through five years	494,983		451,258
Five years through ten years	5,030		4,389

	525,013		480,148
MBS	1,099,824		964,719
	$	1,624,837	$	1,444,867

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 Nine Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
	(Dollars in thousands)
Taxable	$	889	$	813	$	2,651	$	2,393
Non-taxable	6		2		20		30
	$	895	$	815	$	2,671	$	2,423

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



	June 30, 2023		September 30, 2022
	(Dollars in thousands)
Federal Reserve Bank of Kansas City ("FRB of Kansas City") borrowings	$	693,853	$	46,283
Public unit deposits	204,686		125,496
FHLB advances	—		572,913


	$	898,539	$	744,692