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. GAAP requires that securities be classified into three categories: trading, held-to-maturity, and available-for-sale. At December 31, 2017, $55.1 million, or 81.6%, of the Bank’s total securities were classified as available-for-sale, and the remaining $12.4 million, or 18.4%, were classified as held-to-maturity. The Bank had no securities classified as trading at December 31, 2017 and March 31, 2017.

The following tables set forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at December 31, 2017 and March 31, 2017:



	At December 31, 2017
	Amortized		Gross Unrealized				Estimated
$ in thousands	Cost		Gains		Losses		Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	2,218	$	—	$	69	$	2,149
Federal Home Loan Mortgage Corporation	6,903		—		167		6,736
Federal National Mortgage Association	25,275		—		785		24,490
Other	45		—		—		45
Total mortgage-backed securities	34,441		—		1,021		33,420
U.S. Government Agency Securities	6,952		—		124		6,828
Corporate Bonds	5,085		—		96		4,989
Other investments ⁽¹⁾	10,346		—		496		9,850
Total available-for-sale	$	56,824	$	—	$	1,737	$	55,087
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,517	$	59	$	—	$	1,576
Federal National Mortgage Association and Other	9,877		—		72		9,805
Total held-to-maturity mortgage-backed securities	11,394		59		72		11,381
Corporate Bonds	1,000		35		—		1,035
Total held-to maturity	$	12,394	$	94	$	72	$	12,416



	At March 31, 2017
	Amortized		Gross Unrealized				Estimated
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	2,576	$	—	$	89	$	2,487
Federal Home Loan Mortgage Corporation	8,053		—		195		7,858
Federal National Mortgage Association	27,241		—		928		26,313
Other	45		—		—		45
Total mortgage-backed securities	37,915		—		1,212		36,703
U.S. Government Agency Securities	7,574		—		92		7,482
Corporate Bonds	5,104		—		140		4,964
Other investments ⁽¹⁾	10,358		—		496		9,862
Total available-for-sale	$	60,951	$	—	$	1,940	$	59,011
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,797	$	86	$	—	$	1,883
Federal National Mortgage Association and Other	10,638		12		60		10,590
Total held-to-maturity mortgage-backed securities	12,435		98		60		12,473
Corporate Bonds	1,000		24		—		1,024
Total held-to-maturity	$	13,435	$	122	$	60	$	13,497

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

⁽¹⁾ Primarily comprised of an investment in a CRA fund with 95% of its underlying investments consisting of government and agency-backed securities.

The following is a summary regarding proceeds, gross gains and gross losses realized from the sale of securities from the available-for-sale portfolio for the three and nine months ended December 31, 2017 and 2016:



	For the Three Months Ended December 31,				For the Nine Months Ended December 31,
$ in thousands	2017		2016		2017		2016
Proceeds	$	—	$	—	$	—	$	7,259
Gross Gains	—		—		—		58
Gross Losses	—		—		—		—

The following table sets forth the unrealized losses and fair value of securities in an unrealized loss position at December 31, 2017 and March 31, 2017 for less than 12 months and 12 months or longer:



	At December 31, 2017
	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	$	3,819	$	992	$	29,556	$	1,021	$	33,375
U.S. Government Agency Securities	—		—		124		6,828		124		6,828
Corporate Bonds	—		—		96		4,989		96		4,989
Other investments ⁽¹⁾	—		—		496		9,504		496		9,504
Total available-for-sale securities	$	29	$	3,819	$	1,708	$	50,877	$	1,737	$	54,696

Held-to-Maturity:
Mortgage-backed securities	$	35	$	7,968	$	37	$	1,728	$	72	$	9,696
Total held-to-maturity securities	$	35	$	7,968	$	37	$	1,728	$	72	$	9,696



	At March 31, 2017
	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	$	1,171	$	34,716	$	41	$	1,942	$	1,212	$	36,658
U.S. Government Agency Securities	92		7,482		—		—		92		7,482
Corporate bonds	140		4,964		—		—		140		4,964
Other investments ⁽¹⁾	—		—		496		9,504		496		9,504
Total available-for-sale securities	$	1,403	$	47,162	$	537	$	11,446	$	1,940	$	58,608

Held-to-Maturity:
Mortgage-backed securities	$	60	$	7,623	$	—	$	—	$	60	$	7,623
Total held-to-maturity securities	$	60	$	7,623	$	—	$	—	$	60	$	7,623

⁽¹⁾ Primarily comprised of an investment in a CRA fund with 95% of its underlying investments consisting of government and agency-backed securities.

A total of 34 securities had an unrealized loss at December 31, 2017 compared to 33 at March 31, 2017. Mortgage-backed securities represented 61.0% of total available-for-sale securities in an unrealized loss position at December 31, 2017. There were 19 mortgage-backed securities, two U.S. government agency securities, five corporate bonds and one investment in a CRA fund that had an unrealized loss position for more than 12 months at December 31, 2017. Given the high credit quality of the securities which are backed by the U.S. government's guarantees, and the corporate securities which are all reputable institutions in good financial standing, 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 until 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 is accounted for as follows: (1) the portion of the total impairment that is attributable to the credit loss would be recognized in earnings, and (2) the remaining difference between the debt security's amortized cost basis and its fair value would be included in other comprehensive income (loss). During the quarter ended December 31, 2017, the Bank recognized an impairment of less than $500 on a security.

The following is a summary of the carrying value (amortized cost) and fair value of securities at December 31, 2017, 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	$	7,387	$	7,212	1.66	%
Five through ten years	12,142		11,859		2.04	%
After ten years	37,295		36,016		1.47	%
Total	$	56,824	$	55,087	1.62	%

Held-to-maturity:
Five through ten years	$	9,075	$	9,099	2.81	%
After ten years	3,319		3,317		2.64	%
Total	$	12,394	$	12,416	2.77	%