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 December 31, 2015, $68.2 million, or 81.3%, of the Bank’s total securities were classified as available-for-sale, and the remaining $15.7 million, or 18.7%, were classified as held-to-maturity. The Bank had no securities classified as trading at December 31, 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 December 31, 2015:



	Amortized		Gross Unrealized				Estimated
$ in thousands	Cost		Gains		Losses		Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	4,959	$	—	$	46	4,913
Federal Home Loan Mortgage Corporation	8,079		—		212		7,867
Federal National Mortgage Association	8,149		—		168		7,981
Other	46		—		—		46
Total mortgage-backed securities	21,233		—		426		20,807
U.S. Government Agency Securities	37,385		—		641		36,744
Other investments	10,984		—		343		10,641
Total available-for-sale	69,602		—		1,410		68,192
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	2,543		149		—		2,692
Federal National Mortgage Association and Other	12,188		—		149		12,039
Total held-to-maturity mortgage-backed securities	14,731		149		149		14,731
Corporate Bonds	1,000		—		10		990
Total held-to maturity	15,731		149		159		15,721
Total securities	$	85,333	$	149	$	1,569	$	83,913

^* 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
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 December 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	$	29	$	3,887	$	397	$	16,873	$	426	$	20,760
U.S. Government Agency Securities	93		10,907		548		25,837		641		36,744
Other investments ⁽¹⁾	—		—		343		9,657		343		9,657
Total available-for-sale securities	122		14,794		1,288		52,367		1,410		67,161

Held-to-Maturity:
Mortgage-backed securities	149		11,889		—		—		149		11,889
Other	10		990		—		—		10		990
Total held-to-maturity securities	159		12,879		—		—		159		12,879
Total securities	$	281	$	27,673	$	1,288	$	52,367	$	1,569	$	80,040

⁽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 30 securities had an unrealized loss at December 31, 2015 compared to 23 at March 31, 2015. U.S. Government Agency securities and mortgage-backed securities, represented 54.7% and 30.9%, respectively, of total available-for-sale securities in an unrealized loss position at December 31, 2015. There were ten U.S. Government Agency securities, seven mortgage-backed securities, and one investment in a CRA fund that had an unrealized loss position for more than 12 months at December 31, 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 December 31, 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 December 31, 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	5,983		5,911		1.37	%
Five through ten years	17,183		16,814		2.03	%
After ten years	46,436		45,467		1.60	%
Total	$	69,602	$	68,192	1.69	%

Held-to-maturity:
Five through ten years	$	7,023	$	7,006	3.06	%
After ten years	8,708		8,715		2.55	%
Total	$	15,731	$	15,721	2.78	%