CASH 2017 Annual Report

121 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 tomaturity 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: