CASH 2018 Annual Report

25 The following table sets forth the contractual maturities of the Company’s MBS at September 30, 2018. Excluded from the table below is the effect of prepayments, periodic principal repayments and the adjustable-rate nature of these instruments, all of which typically lower the average life of these securities. September 30, 2018 1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total Investment Securities Carrying Value Carrying Value Carrying Value Carrying Value Amortized Cost Fair Value Available for Sale (Dollars in Thousands) Farmer Mac $ — $ — $ — $ 52,849 $ 55,206 $ 52,849 Freddie Mac — — — 69,575 72,388 69,575 Fannie Mae — — — 241,641 250,707 241,641 Total Investment Securities $ — $ — $ — $ 364,065 $ 378,301 $ 364,065 Weighted Average Yield —% —% —% 2.87% 2.61% 2.87% September 30, 2018 1 Year or Less After 1 Year Through 5 Years After 5 Years Through 10 Years After 10 Years Total Investment Securities Carrying Value Carrying Value Carrying Value Carrying Value Amortized Cost Fair Value Held to Maturity (Dollars in Thousands) Ginnie Mae $ — $ — $ — $ 7,850 $ 7,850 $ 7,428 Total Investment Securities — — — 7,850 7,850 7,428 Weighted Average Yield —% —% —% 2.45% 2.45% 2.79% At September 30, 2018, the contractual maturity of all of the Company’s MBS was in excess of ten years. The actual maturity of a mortgage-backed security is typically less than its stated contractual maturity due to scheduled principal payments and prepayments of the underlying mortgages. Prepayments that are different than anticipated will affect the yield to maturity. The yield is based upon the interest income and the amortization of any premium or discount related to the mortgage-backed security. In accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), premiums and discounts are amortized over the estimated lives of the loans, which decrease and increase interest income, respectively. The prepayment assumptions used to determine the amortization period for premiums and discounts can significantly affect the yield of MBS, and these assumptions are reviewed periodically to reflect actual prepayments. Although prepayments of underlying mortgages depend on many factors, including the type of mortgages, the coupon rate, borrower credit scores, loan to premises value, the age of mortgages, the geographical location of the underlying real estate collateralizing the mortgages and general levels of market interest rates, the difference between the interest rates on the underlying mortgages and the prevailing mortgage interest rates generally is the most significant determinant of the rate of prepayments. During periods of falling mortgage interest rates, if the coupon rate of the underlying mortgages exceeds the prevailing market interest rates offered for mortgage loans, refinancing generally increases and accelerates the prepayment of the underlying mortgages and the related security. Under such circumstances, the Company may be subject to reinvestment risk because, to the extent that the Company’s MBS amortize or prepay faster than anticipated, the Company may not be able to reinvest the proceeds of such repayments and prepayments at a comparable rate. During periods of rising interest rates, these prepayments tend to decelerate as the prevailing market interest rates for mortgage rates increase and prepayment incentives dissipate.