Investment Securities

Investment securities available for sale are summarized as follows:



	March 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Other investment securities:
Collateralized loan obligations	$	24,402,948	$	17,322	$	(90,884	)	$	24,329,386
Mortgage-backed securities:
FHLMC certificates	40,018,791		599,789		(71,818		)	40,546,762
FNMA certificates	105,545,426		824,991		(385,662		)	105,984,755
GNMA certificates	1,574,614		72,023		—			1,646,637
Collateralized mortgage obligations:
FHLMC	41,703		3,187		—			44,890
FNMA	70,097		1,820		—			71,917
Private-label mortgage securities: ₍₁₎
Investment grade	1,206,663		5,765		(44,805		)	1,167,623
Split rating ₍₂₎	1,034,993		—		(3,887		)	1,031,106
Non-investment grade	8,229,365		17,745		(88,660		)	8,158,450
Total	$	182,124,600	$	1,542,642	$	(685,716	)	$	182,981,526

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(1)	Credit ratings are current as of March 31, 2015.


(2)	Bonds with split ratings represent securities with both investment and non-investment grades.



	September 30, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
Other investment securities:
Tax-free municipals	$	13,430,732	$	26,471	$	—		$	13,457,203
Mortgage-backed securities:
FHLMC certificates	44,036,704		359,644		(370,420		)	44,025,928
FNMA certificates	119,445,041		499,772		(1,666,436		)	118,278,377
GNMA certificates	1,595,029		102,815		—			1,697,844
Collateralized mortgage obligations:
FHLMC	49,425		4,071		—			53,496
FNMA	78,152		2,004		—			80,156
Private-label mortgage securities:
Investment grade	1,485,804		8,941		(47,887		)	1,446,858
Split rating ₍₁₎	1,090,524		3,583		—			1,094,107
Non-investment grade	8,674,491		45,243		(110,430		)	8,609,304
Total	$	189,885,902	$	1,052,544	$	(2,195,173	)	$	188,743,273

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(1)	Bonds with split ratings represent securities with both investment and non-investment grades.

The amortized cost and estimated fair value of investment securities available for sale as of March 31, 2015, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



	Amortized Cost		Estimated Fair Value
Due within one year	$	—	$	—
Due from one year to five years	—		—
Due after five years	24,402,948		24,329,386
Mortgage-backed securities	157,721,652		158,652,140
Total	$	182,124,600	$	182,981,526

Proceeds from called or matured investment securities available for sale during the six months ended March 31, 2015 and 2014, were $6.8 million and $9.9 million, respectively. Proceeds from sales of investment securities available for sale during the six months ended March 31, 2015 were $14.0 million. Gross realized gains on the sale of these securities were $2,507 and gross realized losses on the sale of these securities were $29,716 for the six months ended March 31, 2015. There were no sales of investment securities during the six months ended March 31, 2014.

Investment securities available for sale with an aggregate carrying amount of $80.3 million and $101.7 million at March 31, 2015 and September 30, 2014, respectively, were pledged to secure FHLB advances.

Investment securities available for sale that had been in a continuous unrealized loss position for less than 12 months at March 31, 2015 and September 30, 2014 are as follows:



	March 31, 2015
	Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
Other investment securities:
Collateralized loan obligations	$	16,127,470	$	(90,884	)	$	16,036,586
Mortgage-backed securities:
FHLMC certificates	17,508,321		(71,818		)	17,436,503
FNMA certificates	30,526,472		(111,084		)	30,415,388
Collateralized mortgage obligations:
Private-label mortgage securities	4,060,724		(22,897		)	4,037,827
Total	$	68,222,987	$	(296,683	)	$	67,926,304



	September 30, 2014
	Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
Mortgage-backed securities:
FNMA certificates	$	6,164,452	$	(2,285	)	$	6,162,167
Collateralized mortgage obligations:
Private-label mortgage securities	1,900,526		(59,509		)	1,841,017
Total	$	8,064,978	$	(61,794	)	$	8,003,184

Investment securities available for sale that had been in a continuous unrealized loss position for greater than 12 months at March 31, 2015 and September 30, 2014 are as follows:



	March 31, 2015
	Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
Mortgage-backed securities:
FNMA certificates	$	22,009,642	$	(274,578	)	$	21,735,064
Collateralized mortgage obligations:
Private-label mortgage securities	2,548,868		(114,455		)	2,434,413
Total	$	24,558,510	$	(389,033	)	$	24,169,477



	September 30, 2014
	Amortized Cost		Gross Unrealized Losses			Estimated Fair Value
Mortgage-backed securities:
FHLMC certificates	$	18,849,864	$	(370,420	)	$	18,479,444
FNMA certificates	77,274,838		(1,664,152		)	75,610,686
Collateralized mortgage obligations:
Private-label mortgage securities	4,188,449		(98,807		)	4,089,642
Total	$	100,313,151	$	(2,133,379	)	$	98,179,772

At March 31, 2015 the Company had approximately $138,000 of gross unrealized losses on private-label mortgage securities with aggregate amortized cost of approximately $6.6 million. During the quarter ended March 31, 2015 the Company did not record any other than temporary impairment charges. Other than what is discussed in the paragraphs below, the Company is projecting that it will receive all contractual cash flows so there is no break in yield or additional other than temporary impairment.

Regularly, the Company performs an assessment to determine whether there have been any events or economic circumstances to indicate that a security on which there is an unrealized loss is impaired other-than-temporarily. The assessment considers many factors including the severity and duration of the impairment, the Company’s intent and ability to hold the security for a period of time sufficient for recovery in value, recent events specific to the industry, and current characteristics of each security such as delinquency and foreclosure levels, credit enhancements, and projected losses and loss coverage ratios. It is possible that the underlying collateral of these securities will perform worse than current expectations, which may lead to adverse changes in cash flows on these securities and potential future other-than-temporary impairment losses. Events that may trigger material declines in fair values for these securities in the future include but are not limited to, deterioration of credit metrics, significantly higher levels of default and severity of loss on the underlying collateral, deteriorating credit enhancement and loss coverage ratios, or further illiquidity. All of these securities were evaluated for other-than-temporary impairment based on an analysis of the factors and characteristics of each security as previously enumerated. The Company considers these unrealized losses to be temporary impairment losses primarily because of continued sufficient levels of credit enhancements and credit coverage levels of less senior tranches to tranches held by the Company.

The Company previously recognized $380,000 in credit losses on its investment portfolio. The Company recorded no such credit losses during the three and six months ended March 31, 2015 and 2014.

The following table shows issuer-specific information, including current par value, book value, fair value, credit rating and unrealized gain (loss) for the Company's portfolio of non-agency collateralized mortgage obligations as of March 31, 2015:



Cusip	Description	Credit Rating ₍₁₎			Cumulative Net Impairment Losses Recognized in Earnings		Current Par Value		Amortized Cost		Market Value		Unrealized Gain (Loss)
		Moody	S&P	Fitch	(dollars in thousands)
Investment Grade
36228FQF6	GSR 2003-4F 1A2	n/a	AA+	BBB	$	—	$	163	$	163	$	166	$	3
55265KL80	MASTR 2003-8 4A1	n/a	A+	A	—		214		213		216		3
86359BVF5	SARM 2004-6 3A3	n/a	A+	n/a	—		831		831		786		(45		)
	Total				—		1,208		1,207		1,168		(39		)
Split Rating
17307GDL9	CMLTI 2004-HYB1 A31	Ba3	n/a	BBB	—		1,035		1,035		1,031		(4		)
	Total				—		1,035		1,035		1,031		(4		)
Non-Investment Grade
576433UQ7	MARM 2004-13 B1	NR	CCC	n/a	380		3,406		3,026		3,007		(19		)
576433VN3	MARM 2004-15 4A1	B3	n/a	B	—		1,718		1,718		1,648		(70		)
576433QD1	MARM 2004-7 5A1	Ba3	BB	n/a	—		3,486		3,485		3,503		18
	Total				380		8,610		8,229		8,158		(71		)
	Grand Total				$	380	$	10,853	$	10,471	$	10,357	$	(114	)

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(1)	Credit ratings are current as of March 31, 2015.

Changes in accumulated other comprehensive income/loss by component for the three and six months ended March 31, 2015 and 2014 are shown in the table below. All amounts are net of tax. The line item affected in the consolidated statements of income by the reclassified amounts is loss on investment securities available for sale.



	Unrealized Gain/Loss on Available-for-Sale Securities
	Three Months Ended March 31,						Six Months Ended March 31,
	2015			2014			2015			2014
Beginning balance	$	(22,874	)	$	(2,461,351	)	$	(754,135	)	$	(1,839,593	)
Other comprehensive income before reclassifications	571,319			671,535			1,303,000			49,777
Amounts reclassified from accumulated other comprehensive income (loss) to loss on investment securities available for sale	17,126			—			16,706			—
Net current-period other comprehensive income	588,445			671,535			1,319,706			49,777
Ending balance	$	565,571		$	(1,789,816	)	$	565,571		$	(1,789,816	)