INVESTMENT SECURITIES

The Bank utilizes mortgage-backed and other investment securities in its asset/liability management strategy. In making investment decisions, the Bank considers, among other things, its yield and interest rate objectives, its interest rate and credit risk position, and its liquidity and cash flow.

Generally, the investment policy of the Bank is to invest funds among categories of investments and maturities based upon the Bank’s asset/liability management policies, investment quality, loan and deposit volume and collateral requirements, liquidity needs and performance objectives. ASC Subtopic 320-10-25 requires that securities be classified into three categories: trading, held-to-maturity, and available-for-sale. At September 30, 2015, $75.8 million, or 82.5%, of the Bank’s total securities were classified as available-for-sale, and the remaining $16.1 million, or 17.5%, were classified as held-to-maturity. The Bank had no securities classified as trading at September 30, 2015 and March 31, 2015.

The following table sets forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at September 30, 2015:



	Amortized		Gross Unrealized					Estimated
$ in thousands	Cost		Gains		Losses			Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	5,169	$	18	$	(5	)	$	5,182
Federal Home Loan Mortgage Corporation	8,398		—		(127		)	8,271
Federal National Mortgage Association	8,449		—		(77		)	8,372
Other	46		—		—			46
Total mortgage-backed securities	22,062		18		(209		)	21,871
U.S. Government Agency Securities	43,533		25		(418		)	43,140
Other investments	10,983		—		(234		)	10,749
Total available-for-sale	76,578		43		(861		)	75,760
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	2,657		167		—			2,824
Federal National Mortgage Association and Other	12,430		84		(27		)	12,487
Total held-to-maturity mortgage-backed securities	15,087		251		(27		)	15,311
Corporate Bonds	1,000		—		—			1,000
Total held-to maturity	16,087		251		(27		)	16,311
Total securities	$	92,665	$	294	$	(888	)	$	92,071

^* The carrying amount and amortized cost are the same for all held-to-maturity securities, as no OTTI has been recorded.

The following table sets forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at March 31, 2015:



	Amortized		Gross Unrealized					Estimated
$ in thousands	Cost		Gains		Losses			Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	5,575	$	9	$	(57	)	$	5,527
Federal Home Loan Mortgage Corporation	10,705		10		(127		)	10,588
Federal National Mortgage Association	10,925		35		(103		)	10,857
Other	47		—		—			47
Total mortgage-backed securities	27,252		54		(287		)	27,019
U.S. Government Agency Securities	58,464		48		(662		)	57,850
Other investments	16,514		—		(198		)	16,316
Total available-for-sale	102,230		102		(1,147		)	101,185
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	3,100		232		—			3,332
Federal National Mortgage Association and Other	8,822		77		—			8,899
Total held-to-maturity mortgage-backed securities	11,922		309		—			12,231
Other	—		—		—			—
Total held-to-maturity	11,922		309		—			12,231
Total securities	$	114,152	$	411	$	(1,147	)	$	113,416

^* The carrying amount and amortized cost are the same for all held-to-maturity securities, as no OTTI has been recorded.

The following table sets forth the unrealized losses and fair value of securities in an unrealized loss position at September 30, 2015 for less than 12 months and 12 months or longer:



	Less than 12 months					12 months or longer					Total
$ in thousands	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
Available-for-Sale:
Mortgage-backed securities	$	—		$	—	$	(209	)	$	17,836	$	(209	)	$	17,836
U.S. Government Agency Securities	(3		)	4,997		(415		)	26,117		(418		)	31,114
Other investments ⁽¹⁾	—			—		(234		)	9,766		(234		)	9,766
Total available-for-sale securities	(3		)	4,997		(858		)	53,719		(861		)	58,716

Held-to-Maturity:
Mortgage-backed securities	(27		)	2,901		—			—		(27		)	2,901
Total held-to-maturity securities	(27		)	2,901		—			—		(27		)	2,901
Total securities	$	(30	)	$	7,898	$	(858	)	$	53,719	$	(888	)	$	61,617

⁽¹⁾ CRA fund comprised of over 95% agency securities.

The following table sets forth the unrealized losses and fair value of securities in an unrealized loss position at March 31, 2015 for less than 12 months and 12 months or longer:



	Less than 12 months					12 months or longer					Total
$ in thousands	Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value
Available-for-Sale:
Mortgage-backed securities	$	—		$	—	$	(287	)	$	22,297	$	(287	)	$	22,297
U.S. Government Agency Securities	(57		)	12,943		(605		)	26,400		(662		)	39,343
Other investments ⁽¹⁾	—			—		(198		)	9,802		(198		)	9,802
Total available-for-sale securities	(57		)	12,943		(1,090		)	58,499		(1,147		)	71,442

⁽¹⁾ CRA fund comprised of over 95% agency securities.

A total of 21 securities had an unrealized loss at September 30, 2015 compared to 23 at March 31, 2015. U.S. Government Agency securities and mortgage-backed securities, represented 53.0% and 30.4%, respectively, of total available-for-sale securities in an unrealized loss position at September 30, 2015. There were ten U.S. Government Agency securities and seven mortgage-backed securities in an unrealized loss position that had an unrealized loss for more than 12 months at September 30, 2015. Given the high credit quality of the securities which are backed by the U.S. government's guarantees, the risk of credit loss is minimal. Management believes that these unrealized losses are a direct result of the current rate environment and has the ability and intent to hold the securities until maturity or the valuation recovers.

The amount of an other-than-temporary impairment when there are credit and non-credit losses on a debt security which management does not intend to sell, and for which it is more likely than not that the Company will not be required to sell the security prior to the recovery of the non-credit impairment, the portion of the total impairment that is attributable to the credit loss would be recognized in earnings. The remaining difference between the debt security’s amortized cost basis and its fair value would be included in other comprehensive income (loss). At September 30, 2015, the Bank does not have any securities that are classified as having other-than-temporary impairment in its investment portfolio.

The following is a summary of the carrying value (amortized cost) and fair value of securities at September 30, 2015, by remaining period to contractual maturity (ignoring earlier call dates, if any). Actual maturities may differ from contractual maturities because certain security issuers have the right to call or prepay their obligations. The table below does not consider the effects of possible prepayments or unscheduled repayments.



$ in thousands	Amortized Cost		Fair Value		Weighted Average Yield
Available-for-Sale:
One through five years	9,983		9,965		1.44	%
Five through ten years	19,183		18,891		1.99	%
After ten years	47,412		46,904		1.56	%
Total	$	76,578	$	75,760	1.65	%

Held-to-maturity:
Five through ten years	$	7,076	$	7,188	3.00	%
After ten years	9,011		9,123		2.51	%
Total	$	16,087	$	16,311	2.72	%