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, 2018, $102.3 million, or 89.7%, of the Bank’s total securities were classified as available-for-sale, $11.3 million, or 9.9%, were classified as held-to-maturity and $416 thousand, or 0.4%, were classified as equity securities. The Bank had no securities classified as trading at December 31, 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 December 31, 2018 and March 31, 2018:



	At December 31, 2018
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	4,583	$	8	$	130	$	4,461
Federal Home Loan Mortgage Corporation	15,527		82		231		15,378
Federal National Mortgage Association	27,701		78		963		26,816
Total mortgage-backed securities	47,811		168		1,324		46,655
U.S. Government Agency Securities	34,801		—		322		34,479
U.S. Treasury Securities	16,377		—		37		16,340
Corporate Bonds	5,060		—		204		4,856
Total available-for-sale	$	104,049	$	168	$	1,887	$	102,330
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	1,250	$	33	$	—	$	1,283
Federal National Mortgage Association and Other	9,090		—		202		8,888
Total held-to-maturity mortgage-backed securities	10,340		33		202		10,171
Corporate Bonds	1,000		23		—		1,023
Total held-to maturity	$	11,340	$	56	$	202	$	11,194



	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 available-for-sale and held-to-maturity securities for the three and nine months ended December 31, 2018 and 2017.

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



	At December 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	$	—	$	—	$	1,324	$	27,011	$	1,324	$	27,011
U.S. Government Agency securities	160		28,368		162		6,111		322		34,479
U.S. Treasury securities	37		16,340		—		—		37		16,340
Corporate Bonds	—		—		204		4,856		204		4,856
Total available-for-sale securities	$	197	$	44,708	$	1,690	$	37,978	$	1,887	$	82,686
Held-to-Maturity:
Mortgage-backed securities	$	—	$	—	$	202	$	8,802	$	202	$	8,802
Total held-to-maturity securities	$	—	$	—	$	202	$	8,802	$	202	$	8,802



	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 37 securities had an unrealized loss at December 31, 2018 compared to 35 at March 31, 2018. U.S. government agency securities and mortgage-backed securities represented 41.7% and 32.7%, respectively, of total available-for-sale securities in an unrealized loss position at December 31, 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 December 31, 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 December 31, 2018.

The following is a summary of the amortized cost and fair value of debt securities at December 31, 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	$	8,495	$	8,472	2.05	%
One through five years	17,650		17,364		2.05	%
Five through ten years	18,466		18,077		2.73	%
After ten years	59,438		58,417		2.84	%
Total	$	104,049	$	102,330	2.63	%

Held-to-maturity:
One through five years	$	4,585	$	4,508	2.40	%
Five through ten years	$	4,025	$	3,992	3.46	%
After ten years	2,730		2,694		2.70	%
Total	$	11,340	$	11,194	2.85	%