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 September 30, 2018, $92.2 million, or 81.3%, of the Bank’s total securities were classified as available-for-sale, $11.5 million, or 10.2%, were classified as held-to-maturity and $9.6 million, or 8.5%, were classified as equity securities. The Bank had no securities classified as trading at September 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 September 30, 2018 and March 31, 2018:



	At September 30, 2018
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	4,791	$	—	$	190	$	4,601
Federal Home Loan Mortgage Corporation	15,830		—		397		15,433
Federal National Mortgage Association	28,355		—		1,408		26,947
Total mortgage-backed securities	48,976		—		1,995		46,981
U.S. Government Agency Securities	24,497		—		413		24,084
U.S. Treasury Securities	16,347		—		78		16,269
Corporate Bonds	5,066		—		205		4,861
Total available-for-sale	$	94,886	$	—	$	2,691	$	92,195
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,288	$	30	$	—	$	1,318
Federal National Mortgage Association and Other	9,257		—		361		8,896
Total held-to-maturity mortgage-backed securities	10,545		30		361		10,214
Corporate Bonds	1,000		12		—		1,012
Total held-to maturity	$	11,545	$	42	$	361	$	11,226



	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 and six months ended September 30, 2018 and 2017.

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



	At September 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	$	166	$	19,708	$	1,829	$	27,273	$	1,995	$	46,981
U.S. Government Agency securities	176		18,046		237		6,038		413		24,084
U.S. Treasury securities	78		16,269		—		—		78		16,269
Corporate Bonds	—		—		205		4,861		205		4,861
Total available-for-sale securities	$	420	$	54,023	$	2,271	$	38,172	$	2,691	$	92,195
Held-to-Maturity:
Mortgage-backed securities	$	229	$	5,486	$	132	$	3,315	$	361	$	8,801
Total held-to-maturity securities	$	229	$	5,486	$	132	$	3,315	$	361	$	8,801



	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 40 securities had an unrealized loss at September 30, 2018 compared to 35 at March 31, 2018. Mortgage-backed securities represented 51.0% of total available-for-sale securities in an unrealized loss position at September 30, 2018. There were 18 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 September 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 September 30, 2018.

The following is a summary of the amortized cost and fair value of debt securities at September 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	$	7,479	$	7,464	2.11	%
One through five years	18,643		18,200		2.03	%
Five through ten years	7,937		7,457		2.19	%
After ten years	60,827		59,074		2.69	%
Total	$	94,886	$	92,195	2.47	%

Held-to-maturity:
One through five years	$	4,613	$	4,444	2.41	%
Five through ten years	$	4,090	$	3,998	3.44	%
After ten years	2,842		2,784		2.45	%
Total	$	11,545	$	11,226	2.78	%