SECURITIES

Securities available for sale at September 30, 2017 and 2016 were as follows:



Available For Sale			GROSS		GROSS
	AMORTIZED		UNREALIZED		UNREALIZED			FAIR
At September 30, 2017	COST		GAINS		(LOSSES)			VALUE
	(Dollars in Thousands)
Debt securities
Small business administration securities	57,046		825		—			57,871
Non-bank qualified obligations of states and political subdivisions	938,883		14,983		(3,037		)	950,829
Asset-backed securities	94,451		2,381		—			96,832
Mortgage-backed securities	588,918		1,259		(3,723		)	586,454
Total debt securities	1,679,298		19,448		(6,760		)	1,691,986
Common equities and mutual funds	1,009		436		—			1,445
Total available for sale securities	$	1,680,307	$	19,884	$	(6,760	)	$	1,693,431



	AMORTIZED		GROSS UNREALIZED		GROSS UNREALIZED			FAIR
At September 30, 2016	COST		GAINS		(LOSSES)			VALUE
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	14,935	$	—	$	(1,957	)	$	12,978
Small business administration securities	78,431		2,288		—			80,719
Non-bank qualified obligations of states and political subdivisions	668,628		30,141		(97		)	698,672
Asset-backed securities	117,487		73		(745		)	116,815
Mortgage-backed securities	555,036		4,382		(478		)	558,940
Total debt securities	1,434,517		36,884		(3,277		)	1,468,124
Common equities and mutual funds	755		373		(3		)	1,125
Total available for sale securities	$	1,435,272	$	37,257	$	(3,280	)	$	1,469,249

Securities held to maturity at September 30, 2017 and 2016 were as follows:



Held to Maturity			GROSS		GROSS
	AMORTIZED		UNREALIZED		UNREALIZED			FAIR
At September 30, 2017	COST		GAINS		(LOSSES)			VALUE
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	19,247	$	157	$	(36	)	$	19,368
Non-bank qualified obligations of states and political subdivisions	430,593		4,744		(2,976		)	432,361
Mortgage-backed securities	113,689		—		(1,233		)	112,456
Total held to maturity securities	$	563,529	$	4,901	$	(4,245	)	$	564,185



	AMORTIZED		GROSS UNREALIZED		GROSS UNREALIZED			FAIR
At September 30, 2016	COST		GAINS		(LOSSES)			VALUE
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	20,626	$	355	$	(44	)	$	20,937
Non-bank qualified obligations of states and political subdivisions	465,469		11,744		(11		)	477,202
Mortgage-backed securities	133,758		708		(31		)	134,435
Total held to maturity securities	$	619,853	$	12,807	$	(86	)	$	632,574

Included in securities available for sale are trust preferred securities as follows:



At September 30, 2016
Issuer⁽¹⁾	Amortized Cost		Fair Value		Unrealized Gain (Loss)			S&P Credit Rating	Moody's Credit Rating
	(Dollars in Thousands)
Key Corp. Capital I	$	4,987	$	4,189	$	(798	)	BB+	Baa2
Huntington Capital Trust II SE	4,981		4,077		(904		)	BB	Baa2
PNC Capital Trust	4,968		4,712		(256		)	BBB-	Baa1
Total	$	14,936	$	12,978	$	(1,958	)

(1) Trust preferred securities are single-issuance. There are no known deferrals, defaults or excess subordination.

The Company sold all of its trust preferred securities during the first quarter of fiscal year 2017.

Management has implemented processes to identify securities that could potentially have a credit impairment that is other-than-temporary. This process can include, but is not limited to, evaluating the length of time and extent to which the fair value has been less than the amortized cost basis, reviewing available information regarding the financial position of the issuer, interest or dividend payment status, monitoring the rating of the security, monitoring changes in value, and projecting cash flows. Management also determines whether the Company intends to sell a security or whether it is more likely than not we will be required to sell the security before the recovery of its amortized cost basis which, in some cases, may extend to maturity. To the extent we determine that a security is deemed to be other-than-temporarily impaired, an impairment loss is recognized.

For all securities considered temporarily impaired, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost, which may occur at maturity. The Company believes collection will occur for all principal and interest due on all investments with amortized cost in excess of fair value and considered only temporarily impaired.

Generally accepted accounting principles require that, at acquisition, an enterprise classify debt securities into one of three categories: available for sale, held to maturity or trading. AFS securities are carried at fair value on the consolidated statements of financial condition, and unrealized holding gains and losses are excluded from earnings and recognized as a separate component of equity in accumulated other comprehensive income. HTM debt securities are measured at amortized cost. Both AFS and HTM are subject to review for other-than-temporary impairment. Meta Financial did not have any trading securities at September 30, 2017.

Gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position at September 30, 2017, and 2016, were as follows:



Available For Sale	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2017	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Non-bank qualified obligations of states and political subdivisions	280,900		(2,887		)	5,853		(150		)	286,753		(3,037		)
Mortgage-backed securities	237,897		(1,625		)	100,287		(2,098		)	338,184		(3,723		)
Total debt securities	518,797		(4,512		)	106,140		(2,248		)	624,937		(6,760		)
Total available for sale securities	$	518,797	$	(4,512	)	$	106,140	$	(2,248	)	$	624,937	$	(6,760	)



	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2016	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Trust preferred and corporate securities	$	—	$	—		$	12,978	$	(1,957	)	$	12,978	$	(1,957	)
Non-bank qualified obligations of states and political subdivisions	8,481		(58		)	2,688		(39		)	11,169		(97		)
Asset-backed securities	89,403		(745		)	—		—			89,403		(745		)
Mortgage-backed securities	54,065		(230		)	36,979		(248		)	91,044		(478		)
Total debt securities	151,949		(1,033		)	52,645		(2,244		)	204,594		(3,277		)
Common equities and mutual funds	—		—			125		(3		)	125		(3		)
Total available for sale securities	$	151,949	$	(1,033	)	$	52,770	$	(2,247	)	$	204,719	$	(3,280	)



Held To Maturity	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2017	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	1,364	$	(6	)	$	4,089	$	(30	)	$	5,453	$	(36	)
Non-bank qualified obligations of states and political subdivisions	202,018		(2,783		)	6,206		(193		)	208,224		(2,976		)
Mortgage-backed securities	112,456		(1,233		)	—		—			112,456		(1,233		)
Total held to maturity securities	$	315,838	$	(4,022	)	$	10,295	$	(223	)	$	326,133	$	(4,245	)



	LESS THAN 12 MONTHS					OVER 12 MONTHS					TOTAL
At September 30, 2016	Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)			Fair Value		Unrealized (Losses)
	(Dollars in Thousands)
Debt securities
Obligations of states and political subdivisions	$	2,909	$	(13	)	$	2,256	$	(31	)	$	5,165	$	(44	)
Non-bank qualified obligations of states and political subdivisions	1,294		(11		)	—		—			1,294		(11		)
Mortgage-backed securities	20,061		(31		)	—		—			20,061		(31		)
Total held to maturity securities	$	24,264	$	(55	)	$	2,256	$	(31	)	$	26,520	$	(86	)

As of September 30, 2017 and 2016, the investment portfolio included securities with current unrealized losses which have existed for longer than one year. All of these securities are considered to be acceptable credit risks. Because the declines in fair value were due to changes in market interest rates, not in estimated cash flows, and the Company does not intend to sell these securities (has not made a decision to sell) and it is not more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis, which may occur at maturity, no other-than-temporary impairment was recorded at September 30, 2017 or 2016.

The amortized cost and fair value of debt securities by contractual maturity are shown below. Certain securities have call features which allow the issuer to call the security prior to maturity. Expected maturities may differ from contractual maturities in mortgage-backed securities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Therefore, mortgage-backed securities are not included in the maturity categories in the following maturity summary. The expected maturities of certain Small Business Administration securities may differ from contractual maturities because the borrowers may have the right to prepay the obligation. However, certain prepayment penalties may apply.



Available For Sale	AMORTIZED COST		FAIR VALUE
At September 30, 2017	(Dollars in Thousands)

Due in one year or less	$	—	$	—
Due after one year through five years	36,586		37,674
Due after five years through ten years	347,831		358,198
Due after ten years	705,963		709,660
	1,090,380		1,105,532
Mortgage-backed securities	588,918		586,454
Common equities and mutual funds	1,009		1,445
Total available for sale securities	$	1,680,307	$	1,693,431



	AMORTIZED COST		FAIR VALUE
At September 30, 2016	(Dollars in Thousands)

Due in one year or less	$	—	$	—
Due after one year through five years	17,370		17,897
Due after five years through ten years	426,034		446,771
Due after ten years	436,077		444,516
	879,481		909,184
Mortgage-backed securities	555,036		558,940
Common equities and mutual funds	755		1,125
Total available for sale securities	$	1,435,272	$	1,469,249



Held To Maturity	AMORTIZED COST		FAIR VALUE
At September 30, 2017	(Dollars in Thousands)

Due in one year or less	$	1,483	$	1,480
Due after one year through five years	17,926		18,160
Due after five years through ten years	144,996		147,832
Due after ten years	285,435		284,257
	449,840		451,729
Mortgage-backed securities	113,689		112,456
Total held to maturity securities	$	563,529	$	564,185



	AMORTIZED COST		FAIR VALUE
At September 30, 2016	(Dollars in Thousands)

Due in one year or less	$	472	$	471
Due after one year through five years	12,502		12,696
Due after five years through ten years	157,944		163,806
Due after ten years	315,177		321,166
	486,095		498,139
Mortgage-backed securities	133,758		134,435
Total held to maturity securities	$	619,853	$	632,574

Activities related to the sale of securities are summarized below.



	2017			2016			2015
September 30,	(Dollars in Thousands)
Available For Sale
Proceeds from sales	$	457,306		$	285,508		$	566,371
Gross gains on sales	4,091			1,459			2,753
Gross losses on sales	4,628			1,785			4,387
Net (loss) on available for sale securities	(537		)	(326		)	(1,634		)

Held To Maturity
Net carrying amount of securities sold	$	5,826		$	—		$	—
Gross realized gain on sales	92			—			—
Gross realized losses on sales	48			—			—
Net gain on held to maturity securities	44			—			—

The Company's decision to sell securities held to maturity in the fourth quarter of fiscal 2017 was due to credit deteriorations of the securities based on the Company's internal credit analysis as well as respective downgrades from credit agencies.