INVESTMENT SECURITIES

12 Months Ended

Sep. 30, 2012

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

INVESTMENT SECURITIES

Components of investment securities are as follows (in thousands):

	September 30,
	2012		2011
Available-for-sale securities	$	19,468	$	14,884
Trading securities	3,064		240
Total investment securities, at fair value	$	22,532	$	15,124

Available-for-sale securities.  The following table discloses the pre-tax unrealized gains (losses) relating to the Company’s investments in available-for-sale securities (in thousands):

	Cost or Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value
September 30, 2012:
Equity securities	$	33,260	$	86	$	(17,649	)	$	15,697
CLO securities	2,484		1,302		(15		)	3,771
Total	$	35,744	$	1,388	$	(17,664	)	$	19,468
September 30, 2011:
Equity securities	$	32,411	$	27	$	(19,910	)	$	12,528
CLO securities	1,039		1,317		—			2,356
Total	$	33,450	$	1,344	$	(19,910	)	$	14,884

Equity securities.  The Company holds approximately 2.6 million shares of RSO common stock (together with options to acquire 2,166 shares at an exercise price of $15.00 per share expiring in March 2015).  The Company also holds 18,972 shares of TBBK common stock.  These investments are pledged as collateral for the Company’s secured corporate credit facilities.

CLO securities.  The CLO securities represent the Company’s retained equity interest in four and three CLO issuers that it has sponsored and manages at September 30, 2012 and 2011, respectively.  The fair value of these retained interests is impacted by the fair value of the investments held by the respective CLO issuers, which are sensitive to interest rate fluctuations and credit quality determinations. The Company is required to maintain a minimum investment of $2.0 million (par value) in the subordinated notes of Apidos CLO II.

Trading securities.  The Company purchased investment securities classified as trading securities during fiscal 2012. The Company had net unrealized gains on these securities totaling $1.1 million and realized gains from sales of trading securities of $909,000 during fiscal 2012, which were included in Financial Fund Management Revenues on the consolidated statements of operations.

The Company held 33,509 shares of TBBK common stock valued at $240,000 in a Rabbi Trust for the Supplemental Employment Retirement Plan (“SERP”) for its former Chief Executive Officer as of September 30, 2011. During fiscal 2012 and 2011, the Company sold 33,509 and 90,210 shares and recognized net gains of $22,000 and $186,000, respectively.  In addition, the Company had an unrealized trading gain of $16,000 for fiscal 2011 on the TBBK shares it held in the plan. The plan no longer holds any shares of TBBK as of September 30, 2012.

Unrealized losses along with the related fair value and aggregated by the length of time the investments were in a continuous unrealized loss position, are as follows (in thousands, except number of securities):

	Less than 12 Months						More than 12 Months
	Fair Value		Unrealized Losses			Number of Securities	Fair Value		Unrealized Losses			Number of Securities
September 30, 2012:
Equity securities	$	—	$	—		—	$	12,161	$	(17,976	)	1
CLO securities	1,274		(15		)	1	—		—			—
Total	$	1,274	$	(15	)	1	$	12,161	$	(17,976	)	1
September 30, 2011:
Equity securities	$	—	$	—		—	$	12,393	$	(19,910	)	1
CLO securities	—		—			—	—		—			—
Total	$	—	$	—		—	$	12,393	$	(19,910	)	1

The unrealized losses in RSO common stock reflected in the above table are considered to be temporary impairments due to market factors and not reflective of credit deterioration. The Company considers its role as the external manager of RSO and the value of its management contract, which includes a substantial fee for termination of the manager. Further, because of its intent and ability to hold its investment in RSO, the Company does not consider the unrealized losses to be other-than-temporary impairments.

Other-than-temporary impairment losses.  In fiscal 2012, 2011 and 2010, the Company recorded charges of $74,000, $0 and $480,000, respectively, for the other-than-temporary impairment of certain of its investments in CLOs, primarily those with investments in bank loans, financial institutions, and real estate ABS (which includes RMBS and CMBS).  Additionally, in fiscal 2010, the Company recorded a $329,000 charge for the other-than-temporary impairment of its investment in TBBK common stock held for the SERP as the Company determined it would begin to dispose of these securities commencing in fiscal 2011.