Securities Available for Sale

The amortized cost and approximate fair value of investments in securities, all of which are classified as available for sale according to management’s intent, are summarized as follows:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(dollars in thousands)
As of September 30, 2016
U.S. Treasury securities	$	227,007	$	3,973	$	—		$	230,980
U.S. Agency securities	—		—		—			—
Mortgage-backed securities:
Government National Mortgage Association	664,529		3,172		(1,922		)	665,779
Federal National Mortgage Association	212,452		1,324		—			213,776
Small Business Assistance Program	142,921		2,362		—			145,283
States and political subdivision securities	55,525		123		(164		)	55,484
Corporate debt securities	4,998		24		—			5,022
Other	1,013		49		—			1,062
Total	$	1,308,445	$	11,027	$	(2,086	)	$	1,317,386



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
	(dollars in thousands)
As of September 30, 2015
U.S. Treasury securities	$	250,986	$	3,811	$	—		$	254,797
U.S. Agency securities	74,412		643		—			75,055
Mortgage-backed securities:
Government National Mortgage Association	842,460		3,663		(4,503		)	841,620
Federal National Mortgage Association	46,449		96		—			46,545
Small Business Assistance Program	101,415		233		(213		)	101,435
States and political subdivision securities	1,849		1		—			1,850
Corporate debt securities	4,996		—		(13		)	4,983
Other	1,006		36		—			1,042
Total	$	1,323,573	$	8,483	$	(4,729	)	$	1,327,327

The amortized cost and approximate fair value of debt securities available for sale as of September 30, 2016 and 2015, by contractual maturity, are shown below. Maturities of mortgage-backed securities may differ from contractual maturities because the mortgages underlying the securities may be called or repaid without any penalties.



	September 30, 2016				September 30, 2015
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(dollars in thousands)
Due in one year or less	$	3,706	$	3,709	$	76,261	$	76,905
Due after one year through five years	265,253		269,242		255,982		259,780
Due after five years through ten years	18,449		18,413		—		—
Due after ten years	122		122		—		—
	287,530		291,486		332,243		336,685
Mortgage-backed securities	1,019,902		1,024,838		990,324		989,600
Securities without contractual maturities	1,013		1,062		1,006		1,042
Total	$	1,308,445	$	1,317,386	$	1,323,573	$	1,327,327

Proceeds from sales of securities available for sale were $145.9 million, $105.2 million and $47.3 million for the years ended September 30, 2016, 2015 and 2014 respectively. Gross gains (pre-tax) of $0.5 million, $0.8 million and $1.0 million and gross losses (pre-tax) of $0.0 million, $0.5 million and $0.9 million were realized on the sales for the years ended September 30, 2016, 2015 and 2014, respectively, using the specific identification method. The Company recognized an other than temporary impairment in net loss on sale of securities in the consolidated statements of comprehensive income of $0.4 million on two security holdings attributable to credit for the year ended September 30, 2016. There was no other than temporary impairment recognized for the years ended September 30, 2015 and 2014.

Securities with an estimated fair value of approximately $971.3 million and $894.3 million at September 30, 2016 and 2015, respectively, were pledged as collateral on public deposits, securities sold under agreements to repurchase, and for other purposes as required or permitted by law. The counterparties do not have the right to sell or pledge the securities the Company has pledged as collateral.

As detailed in the following tables, certain investments in debt securities, which are approximately 25% and 36% of the Company’s investment portfolio at September 30, 2016 and 2015, respectively, are reported in the consolidated financial statements at an amount less than their amortized cost. Based on evaluation of available evidence, including recent changes in market interest rates, credit rating information, implicit or explicit government guarantees, and information obtained from regulatory filings, management believes the declines in fair value of these securities are temporary. As the Company does not intend to sell the securities and it is more likely than not that the Company will not be required to sell the securities before the recovery of their amortized cost basis, which may be maturity, the Company does not consider the securities to be other than temporarily impaired at September 30, 2016 or 2015.

The following table presents the Company’s gross unrealized losses and approximate fair value in investments, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:



	September 30, 2016
	Less than 12 months					12 months or more					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(dollars in thousands)
Mortgage-backed securities	$	17,528	$	(6	)	$	284,995	$	(1,916	)	$	302,523	$	(1,922	)
States and political subdivision securities	27,933		(164		)	—		—			27,933		(164		)
Corporate debt securities	—		—			—		—			—		—
Total	$	45,461	$	(170	)	$	284,995	$	(1,916	)	$	330,456	$	(2,086	)



	September 30, 2015
	Less than 12 months					12 months or more					Total
	Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
	(dollars in thousands)
Mortgage-backed securities	$	58,604	$	(236	)	$	412,058	$	(4,480	)	$	470,662	$	(4,716	)
States and political subdivision securities	—		—			—		—			—		—
Corporate debt securities	4,984		(13		)	—		—			4,984		(13		)
Total	$	63,588	$	(249	)	$	412,058	$	(4,480	)	$	475,646	$	(4,729	)

As of September 30, 2016 and 2015, the Company had 110 and 31 securities, respectively, in an unrealized loss position.

The components of other accumulated comprehensive income (loss) from net unrealized gains (losses) on securities available for sale for the years ended September 30, 2016, 2015 and 2014 are as follows:



	September 30,
	2016			2015			2014
	(dollars in thousands)
Beginning balance accumulated other comprehensive income (loss)	$	2,318		$	(6,157	)	$	(7,081	)
Net unrealized holding gain arising during the year	5,347			13,979			1,400
Reclassification adjustment for net (gain) realized in net income	(160		)	(310		)	(90		)
Net change in unrealized gain before income taxes	5,187			13,669			1,310
Income tax (expense)	(1,971		)	(5,194		)	(386		)
Net change in unrealized gain on securities after taxes	3,216			8,475			924
Ending balance accumulated other comprehensive income (loss)	$	5,534		$	2,318		$	(6,157	)