COMMITMENTS AND CONTINGENCIES	12 Months Ended
Sep. 30, 2013
COMMITMENTS AND CONTINGENCIES [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 15. COMMITMENTS AND CONTINGENCIES In the normal course of business, the Bank makes various commitments to extend credit which are not reflected in the accompanying consolidated financial statements. At September 30, 2013 and 2012, unfunded loan commitments approximated $102.9 million and $56.4 million respectively, excluding undisbursed portions of loans in process. Unfunded loan commitments at September 30, 2013 and 2012 were principally for variable rate loans. Commitments, which are disbursed subject to certain limitations, extend over various periods of time. Generally, unused commitments are canceled upon expiration of the commitment term as outlined in each individual contract. The exposure to credit loss in the event of nonperformance by other parties to financial instruments for commitments to extend credit is represented by the contractual amount of those instruments. The same credit policies and collateral requirements are used in making commitments and conditional obligations as are used for on-balance-sheet instruments. Since certain commitments to make loans and to fund lines of credit and loans in process expire without being used, the amount does not necessarily represent future cash commitments. In addition, commitments used to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Securities with fair values of approximately $5.6 million and $5.7 million at September 30, 2013 and 2012, respectively, were pledged as collateral for public funds on deposit. Securities with fair values of approximately $7.4 million and $17.8 million at September 30, 2013 and 2012, respectively, were pledged as collateral for individual, trust and estate deposits. Legal Proceedings The Bank was served on April 15, 2013, with a lawsuit captioned Inter National Bank v. NetSpend Corporation, MetaBank, BDO USA, LLP d/b/a BDO Seidman, Cause No. C-2084-12-I filed in the District Court of Hidalgo County, Texas. The Plaintiff’s Second Amended Original Petition and Application for Temporary Restraining Order and Temporary Injunction adds both MetaBank and BDO Seidman to the original causes of action against NetSpend. NetSpend acts as a prepaid card program manager and processor for both INB and MetaBank. According to the Petition, NetSpend has informed Inter National Bank (“INB”) that the depository accounts at INB for the NetSpend program supposedly contained $10.5 million less than they should. INB alleges that NetSpend has breached its fiduciary duty by making affirmative misrepresentations to INB about the safety and stability of the program, and by failing to timely disclose the nature and extent of any alleged shortfall in settlement of funds related to cardholder activity and the nature and extent of NetSpend’s systemic deficiencies in its accounting and settlement processing procedures. To the extent that an accounting reveals that there is an actual shortfall, INB alleges that MetaBank may be liable for portions or all of said sum due to the fact that funds have been transferred from INB to MetaBank, and thus MetaBank would have been unjustly enriched. The Bank intends to vigorously contest this matter. An estimate of a range of reasonably possible loss cannot be made at this stage of the litigation because discovery is still being conducted. Soneet R. Kapila, as Chapter 11 Trustee for Louis J. Pearlman, Louis J. Pearlman Enterprises, Inc., and Transcontinental Aviation, Inc. v. First International Bank & Trust, et al, Adv. No.: 6-09-ap-00106-KSJ, filed in the United States Bankruptcy Court for the Middle District of Florida, Orlando Division on March 20, 2009. This is a cause of action brought by the above-captioned Trustee to avoid and recover alleged fraudulent transfers related to loans made by First International Bank & Trust to the Debtors. First International Bank & Trust sold participations in the loans to multiple banks, including MetaBank. The action is brought by the Trustee pursuant to Bankruptcy Sections 544, 548, 550 of the Bankruptcy Code, as well as the Florida Uniform Fraudulent Transfer Act, Chapter 726 of Florida Statutes. The Company recently settled this matter with the Trustee, which settlement is pending approval of the court. Certain corporate clients of an unrelated company named Springbok Services, Inc. (“Springbok”) requested through counsel a mediation as a means of reaching a settlement in lieu of commencing litigation against MetaBank. The results of that mediation have not led to a settlement. These claimants purchased MetaBank prepaid reward cards from Springbok, prior to Springbok’s bankruptcy. As a result of Springbok’s bankruptcy and cessation of business, some of the rewards cards which had been purchased were never activated or funded. Counsel for these companies have indicated that they are prepared to assert claims totaling approximately $1.5 million against MetaBank based on principal/agency or failure to supervise theories. The Company denies liability with respect to these claims. The Company’s estimate of a range of reasonably possible loss is approximately $0 to $0.3 million. In October 2013, the Company’s third party service provider supporting certain of the Bank’s back office operations, sent a letter to the Bank claiming that the Bank bore “ultimate responsibility” for an approximately $9 million loss suffered by such service provider in connection with a credit card hacking and fraud incident. Such service provider alleges that in 2010 MetaBank alerted the service provider that MetaBank had set up a bank identification number (“BIN”) with MasterCard on behalf of Ingenicard, a prepaid card program manager that MetaBank had been considering as a program partner. The service provider claims that it was unaware that MetaBank ultimately decided not to activate this particular program and had deactivated Ingenicard’s BIN approximately two years later. Ultimately, Ingenicard’s processing system was hacked to inflate card limits and approximately $9 million in improper charges were thereby placed through MasterCard. Such service provider states it had a pre-existing understanding with MasterCard that allowed MasterCard to extract this amount from such service provider, but after MasterCard debited such service provider’s account, such service provider was unable to obtain any reimbursement from Ingenicard, which ultimately filed for bankruptcy. Asserting contractual and other legal theories, the service provider claims that it allowed MasterCard to extract this money based on its reliance on MetaBank’s apparent backing of the Ingenicard program, and therefore MetaBank’s failure to notify such service provider of deactivation of Ingenicard’s BIN caused this loss. MetaBank believes it bears no liability whatsoever for such service provider’s loss. To date, such service provider has neither made a specific demand on MetaBank nor instituted legal action beyond its initial letter, but if it does so MetaBank, backed by its insurer which has agreed to defend subject to a reservation of rights, intends to defend such action vigorously. Other than the matters set forth above, there are no other new material pending legal proceedings or updates to which the Company or its subsidiaries is a party other than ordinary litigation routine to their respective businesses.

NOTE 15. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Bank makes various commitments to extend credit which are not reflected in the accompanying consolidated financial statements.

At September 30, 2013 and 2012, unfunded loan commitments approximated $102.9 million and $56.4 million respectively, excluding undisbursed portions of loans in process. Unfunded loan commitments at September 30, 2013 and 2012 were principally for variable rate loans. Commitments, which are disbursed subject to certain limitations, extend over various periods of time. Generally, unused commitments are canceled upon expiration of the commitment term as outlined in each individual contract.

The exposure to credit loss in the event of nonperformance by other parties to financial instruments for commitments to extend credit is represented by the contractual amount of those instruments. The same credit policies and collateral requirements are used in making commitments and conditional obligations as are used for on-balance-sheet instruments.

Since certain commitments to make loans and to fund lines of credit and loans in process expire without being used, the amount does not necessarily represent future cash commitments. In addition, commitments used to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.

Securities with fair values of approximately $5.6 million and $5.7 million at September 30, 2013 and 2012, respectively, were pledged as collateral for public funds on deposit. Securities with fair values of approximately $7.4 million and $17.8 million at September 30, 2013 and 2012, respectively, were pledged as collateral for individual, trust and estate deposits.

Legal Proceedings

The Bank was served on April 15, 2013, with a lawsuit captioned Inter National Bank v. NetSpend Corporation, MetaBank, BDO USA, LLP d/b/a BDO Seidman, Cause No. C-2084-12-I filed in the District Court of Hidalgo County, Texas. The Plaintiff’s Second Amended Original Petition and Application for Temporary Restraining Order and Temporary Injunction adds both MetaBank and BDO Seidman to the original causes of action against NetSpend. NetSpend acts as a prepaid card program manager and processor for both INB and MetaBank. According to the Petition, NetSpend has informed Inter National Bank (“INB”) that the depository accounts at INB for the NetSpend program supposedly contained $10.5 million less than they should. INB alleges that NetSpend has breached its fiduciary duty by making affirmative misrepresentations to INB about the safety and stability of the program, and by failing to timely disclose the nature and extent of any alleged shortfall in settlement of funds related to cardholder activity and the nature and extent of NetSpend’s systemic deficiencies in its accounting and settlement processing procedures. To the extent that an accounting reveals that there is an actual shortfall, INB alleges that MetaBank may be liable for portions or all of said sum due to the fact that funds have been transferred from INB to MetaBank, and thus MetaBank would have been unjustly enriched. The Bank intends to vigorously contest this matter. An estimate of a range of reasonably possible loss cannot be made at this stage of the litigation because discovery is still being conducted.

Soneet R. Kapila, as Chapter 11 Trustee for Louis J. Pearlman, Louis J. Pearlman Enterprises, Inc., and Transcontinental Aviation, Inc. v. First International Bank & Trust, et al, Adv. No.: 6-09-ap-00106-KSJ, filed in the United States Bankruptcy Court for the Middle District of Florida, Orlando Division on March 20, 2009. This is a cause of action brought by the above-captioned Trustee to avoid and recover alleged fraudulent transfers related to loans made by First International Bank & Trust to the Debtors. First International Bank & Trust sold participations in the loans to multiple banks, including MetaBank. The action is brought by the Trustee pursuant to Bankruptcy Sections 544, 548, 550 of the Bankruptcy Code, as well as the Florida Uniform Fraudulent Transfer Act, Chapter 726 of Florida Statutes. The Company recently settled this matter with the Trustee, which settlement is pending approval of the court.

Certain corporate clients of an unrelated company named Springbok Services, Inc. (“Springbok”) requested through counsel a mediation as a means of reaching a settlement in lieu of commencing litigation against MetaBank. The results of that mediation have not led to a settlement. These claimants purchased MetaBank prepaid reward cards from Springbok, prior to Springbok’s bankruptcy. As a result of Springbok’s bankruptcy and cessation of business, some of the rewards cards which had been purchased were never activated or funded. Counsel for these companies have indicated that they are prepared to assert claims totaling approximately $1.5 million against MetaBank based on principal/agency or failure to supervise theories. The Company denies liability with respect to these claims. The Company’s estimate of a range of reasonably possible loss is approximately $0 to $0.3 million.

In October 2013, the Company’s third party service provider supporting certain of the Bank’s back office operations, sent a letter to the Bank claiming that the Bank bore “ultimate responsibility” for an approximately $9 million loss suffered by such service provider in connection with a credit card hacking and fraud incident. Such service provider alleges that in 2010 MetaBank alerted the service provider that MetaBank had set up a bank identification number (“BIN”) with MasterCard on behalf of Ingenicard, a prepaid card program manager that MetaBank had been considering as a program partner. The service provider claims that it was unaware that MetaBank ultimately decided not to activate this particular program and had deactivated Ingenicard’s BIN approximately two years later. Ultimately, Ingenicard’s processing system was hacked to inflate card limits and approximately $9 million in improper charges were thereby placed through MasterCard. Such service provider states it had a pre-existing understanding with MasterCard that allowed MasterCard to extract this amount from such service provider, but after MasterCard debited such service provider’s account, such service provider was unable to obtain any reimbursement from Ingenicard, which ultimately filed for bankruptcy. Asserting contractual and other legal theories, the service provider claims that it allowed MasterCard to extract this money based on its reliance on MetaBank’s apparent backing of the Ingenicard program, and therefore MetaBank’s failure to notify such service provider of deactivation of Ingenicard’s BIN caused this loss. MetaBank believes it bears no liability whatsoever for such service provider’s loss. To date, such service provider has neither made a specific demand on MetaBank nor instituted legal action beyond its initial letter, but if it does so MetaBank, backed by its insurer which has agreed to defend subject to a reservation of rights, intends to defend such action vigorously.

Other than the matters set forth above, there are no other new material pending legal proceedings or updates to which the Company or its subsidiaries is a party other than ordinary litigation routine to their respective businesses.