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 June 30, 2018, $65.8 million, or 75.3%, of the Bank’s total securities were classified as available-for-sale, $11.8 million, or 13.6%, were classified as held-to-maturity and $9.7 million, or 11.1%, were classified as equity securities. The Bank had no securities classified as trading at June 30, 2018 and March 31, 2018.

Equity securities primarily consist of the Bank's investment in a Community Reinvestment Act ("CRA") mutual fund and other equity investments. As a result of the adoption of ASU 2016-01 in April 2018, the Company determined that these investments fall under the provisions of ASU 2016-01, and accordingly, were transferred from available-for-sale and reclassified into equity securities on the Statement of Financial Condition. These securities are measured at fair value with unrealized holding gains and losses reflected in net income. Effective April 1, 2018, the Company recorded a cumulative effect adjustment of $721 thousand as a reclassification from accumulated other comprehensive loss to retained earnings. Additionally, all future changes in fair value will be recognized in the Statements of Operations.

The following tables set forth the amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2018 and March 31, 2018:



	At June 30, 2018
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	2,107	$	—	$	113	$	1,994
Federal Home Loan Mortgage Corporation	6,335		—		291		6,044
Federal National Mortgage Association	23,921		—		1,319		22,602
Total mortgage-backed securities	32,363		—		1,723		30,640
U.S. Government Agency Securities	14,418		—		351		14,067
U.S. Treasury Securities	16,318		—		46		16,272
Corporate Bonds	5,072		—		223		4,849
Total available-for-sale	$	68,171	$	—	$	2,343	$	65,828
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,359	$	52	$	—	$	1,411
Federal National Mortgage Association and Other	9,485		—		314		9,171
Total held-to-maturity mortgage-backed securities	10,844		52		314		10,582
Corporate Bonds	1,000		21		—		1,021
Total held-to maturity	$	11,844	$	73	$	314	$	11,603



	At March 31, 2018
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	2,163	$	—	$	97	$	2,066
Federal Home Loan Mortgage Corporation	6,633		—		283		6,350
Federal National Mortgage Association	24,638		—		1,227		23,411
Total mortgage-backed securities	33,434		—		1,607		31,827
U.S. Government Agency Securities	14,490		—		258		14,232
Corporate Bonds	5,078		—		212		4,866
Other investments ⁽¹⁾	10,433		—		649		9,784
Total available-for-sale	$	63,435	$	—	$	2,726	$	60,709
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,434	$	51	$	—	$	1,485
Federal National Mortgage Association and Other	9,641		—		247		9,394
Total held-to-maturity mortgage-backed securities	11,075		51		247		10,879
Corporate Bonds	1,000		30		—		1,030
Total held-to-maturity	$	12,075	$	81	$	247	$	11,909

^* 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.

There were no sales of securities for the three months ended June 30, 2018 and 2017.

The following tables set forth the unrealized losses and fair value of securities in an unrealized loss position at June 30, 2018 and March 31, 2018 for less than 12 months and 12 months or longer:



	At June 30, 2018
	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	$	138	$	3,614	$	1,585	$	27,026	$	1,723	$	30,640
U.S. Government Agency securities	134		7,543		217		6,524		351		14,067
U.S. Treasury securities	46		16,272		—		—		46		16,272
Corporate Bonds	—		—		223		4,849		223		4,849
Total available-for-sale securities	$	318	$	27,429	$	2,025	$	38,399	$	2,343	$	65,828
Held-to-Maturity:
Mortgage-backed securities	$	252	$	7,505	$	62	$	1,569	$	314	$	9,074
Total held-to-maturity securities	$	252	$	7,505	$	62	$	1,569	$	314	$	9,074



	At March 31, 2018
	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	$	101	$	3,702	$	1,506	$	28,124	$	1,607	$	31,826
U.S. Government Agency securities	80		7,666		178		6,566		258		14,232
Corporate bonds	—		—		212		4,866		212		4,866
Other investments ⁽¹⁾	—		—		649		9,351		649		9,351
Total available-for-sale securities	$	181	$	11,368	$	2,545	$	48,907	$	2,726	$	60,275
Held-to-Maturity:
Mortgage-backed securities	$	188	$	7,681	$	59	$	1,612	$	247	$	9,293
Total held-to-maturity securities	$	188	$	7,681	$	59	$	1,612	$	247	$	9,293

⁽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 36 securities had an unrealized loss at June 30, 2018 compared to 35 at March 31, 2018. Mortgage-backed securities represented 46.5% of total available-for-sale securities in an unrealized loss position at June 30, 2018. There were 17 mortgage-backed securities, three U.S. government agency securities, and five corporate bonds that had an unrealized loss position for more than 12 months at June 30, 2018. 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 fiscal year ended March 31, 2018, the Bank recognized an impairment of less than $500 on a mortgage-backed security. The Bank did not have any other securities that were classified as having other-than-temporary impairment in its investment portfolio at June 30, 2018.

The following is a summary of the amortized cost and fair value of debt securities at June 30, 2018, 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:
Less than one year	$	7,471	$	7,457	2.11	%
One through five years	19,145		18,742		2.01	%
Five through ten years	10,254		9,707		2.08	%
After ten years	31,301		29,922		2.14	%
Total	$	68,171	$	65,828	2.09	%

Held-to-maturity:
One through five years	$	4,640	$	4,498	2.41	%
Five through ten years	$	4,162	$	4,102	3.39	%
After ten years	3,042		3,003		2.74	%
Total	$	11,844	$	11,603	2.84	%