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, 2019, $75.1 million, or 87.6%, of the Bank’s total securities were classified as available-for-sale, and $10.7 million, or 12.4%, were classified as held-to-maturity. The Bank had no securities classified as trading at September 30, 2019 and March 31, 2019.

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 subsequent changes in fair value have been recognized in the Statements of Operations. The Bank redeemed its $9.2 million investment in the CRA mutual fund during the third quarter of fiscal year 2019.

Other investments totaled $492 thousand at September 30, 2019 and are included in Other Assets on the Statements of Financial Condition.

The following tables set forth the amortized cost and fair value of securities available-for-sale and held-to-maturity at September 30, 2019 and March 31, 2019:



	At September 30, 2019
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	3,907	$	21	$	15	$	3,913
Federal Home Loan Mortgage Corporation	10,243		148		25		10,366
Federal National Mortgage Association	25,504		363		225		25,642
Total mortgage-backed securities	39,654		532		265		39,921
U.S. Government Agency Securities	30,310		13		205		30,118
Corporate Bonds	5,041		35		6		5,070
Total available-for-sale	$	75,005	$	580	$	476	$	75,109
Held-to-Maturity:
Mortgage-backed securities:
Government National Mortgage Association	$	1,113	$	69	$	—	$	1,182
Federal National Mortgage Association and Other	8,567		131		10		8,688
Total held-to-maturity mortgage-backed securities	9,680		200		10		9,870
Corporate Bonds	1,000		9		—		1,009
Total held-to maturity	$	10,680	$	209	$	10	$	10,879



	At March 31, 2019
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	4,443	$	25	$	86	$	4,382
Federal Home Loan Mortgage Corporation	11,104		69		148		11,025
Federal National Mortgage Association	27,094		131		617		26,608
Total mortgage-backed securities	42,641		225		851		42,015
U.S. Government Agency Securities	33,089		—		236		32,853
Corporate Bonds	5,054		—		77		4,977
Total available-for-sale	$	80,784	$	225	$	1,164	$	79,845
Held-to-Maturity:
Mortgage-backed securities:
Government National Mortgage Association	$	1,214	$	40	$	—	$	1,254
Federal National Mortgage Association and Other	8,923		—		87		8,836
Total held-to-maturity mortgage-backed securities	10,137		40		87		10,090
Corporate Bonds	1,000		17		—		1,017
Total held-to-maturity	$	11,137	$	57	$	87	$	11,107

There were no sales of available-for-sale and held-to-maturity securities for the three and six months ended September 30, 2019 and 2018.

The following tables set forth the unrealized losses and fair value of securities in an unrealized loss position at September 30, 2019 and March 31, 2019 for less than 12 months and 12 months or longer:



	At September 30, 2019
	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	$	18	$	3,498	$	247	$	18,156	$	265	$	21,654
U.S. Government Agency securities	76		9,937		129		18,680		205		28,617
Corporate Bonds	—		—		6		3,009		6		3,009
Total available-for-sale securities	$	94	$	13,435	$	382	$	39,845	$	476	$	53,280
Held-to-Maturity:
Mortgage-backed securities	$	—	$	—	$	10	$	1,248	$	10	$	1,248
Total held-to-maturity securities	$	—	$	—	$	10	$	1,248	$	10	$	1,248



	At March 31, 2019
	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	$	—	$	—	$	851	$	26,787	$	851	$	26,787
U.S. Government Agency securities	23		20,851		213		12,002		236		32,853
Corporate bonds	—		—		77		4,977		77		4,977
Total available-for-sale securities	$	23	$	20,851	$	1,141	$	43,766	$	1,164	$	64,617
Held-to-Maturity:
Mortgage-backed securities	$	—	$	—	$	87	$	8,752	$	87	$	8,752
Total held-to-maturity securities	$	—	$	—	$	87	$	8,752	$	87	$	8,752

A total of 24 securities had an unrealized loss at September 30, 2019 compared to 35 at March 31, 2019. U.S. government agency securities and mortgage-backed securities represented 53.7% and 40.6%, respectively, of total available-for-sale securities in an unrealized loss position at September 30, 2019. There were 13 mortgage-backed securities, three corporate bonds, and three U.S. government agency securities, that had an unrealized loss position for more than 12 months at September 30, 2019. The Bank had one mortgage-backed security in the held-to-maturity portfolio that had an unrealized loss position for more than 12 months. 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 that the Company has the ability and intent to hold the securities until maturity or until the valuations recover.

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). The Bank did not have any other securities that were classified as having other-than-temporary impairment in its investment portfolio at September 30, 2019.

The following is a summary of the amortized cost and fair value of debt securities at September 30, 2019, 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	$	1,001	$	1,000	1.65	%
One through five years	7,962		7,925		1.72	%
Five through ten years	15,392		15,377		2.63	%
After ten years	50,650		50,807		2.61	%
Total	$	75,005	$	75,109	2.51	%

Held-to-maturity:
One through five years	$	4,498	$	4,569	2.40	%
Five through ten years	$	4,144	$	4,226	3.35	%
After ten years	2,038		2,084		2.86	%
Total	$	10,680	$	10,879	2.86	%