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INVESTMENT SECURITIES
12 Months Ended
Mar. 31, 2022
INVESTMENT SECURITIES  
INVESTMENT SECURITIES

3.    INVESTMENT SECURITIES

The amortized cost and approximate fair value of investment securities consisted of the following at the dates indicated (in thousands):

    

    

Gross

    

Gross

    

Estimated 

Amortized

Unrealized

Unrealized 

Fair

Cost

 Gains

Losses

Value

March 31, 2022

 

  

 

  

 

  

 

  

Available for sale:

 

 

  

 

  

 

  

Municipal securities

$

44,104

$

14

$

(4,514)

$

39,604

Agency securities

 

43,848

1

(3,144)

40,705

Real estate mortgage investment conduits (1)

 

35,563

1

(2,847)

32,717

Residential mortgage-backed securities (1)

 

17,368

13

(436)

16,945

Other mortgage-backed securities (2)

 

37,991

28

(2,208)

35,811

Total available for sale

$

178,874

$

57

$

(13,149)

$

165,782

Held to maturity:

 

Municipal securities

$

10,368

$

$

(1,422)

$

8,946

Agency securities

45,277

(2,450)

42,827

Real estate mortgage investment conduits (1)

39,394

(2,457)

36,937

Residential mortgage-backed securities (1)

137,343

(8,883)

128,460

Other mortgage-backed securities (3)

20,718

(1,859)

18,859

Total held to maturity

$

253,100

$

$

(17,071)

$

236,029

    

    

Gross

    

Gross

    

Amortized

Unrealized 

Unrealized

Estimated 

Cost

Gains

 Losses

Fair Value

March 31, 2021

 

  

 

  

 

  

 

  

Available for sale:

 

  

 

  

 

  

 

  

Municipal securities

$

23,883

$

238

$

(555)

$

23,566

Agency securities

 

25,996

5

(686)

25,315

Real estate mortgage investment conduits (1)

 

55,826

469

(480)

55,815

Residential mortgage-backed securities (1)

 

71,787

1,075

(614)

72,248

Other mortgage-backed securities (2)

 

39,022

514

(176)

39,360

Total available for sale

$

216,514

$

2,301

$

(2,511)

$

216,304

Held to maturity:

 

Municipal securities

$

10,391

$

$

(509)

$

9,882

Agency securities

7,688

(220)

7,468

Real estate mortgage investment conduits (1)

9,207

(141)

9,066

Residential mortgage-backed securities (3)

6,175

(119)

6,056

Other mortgage-backed securities (2)

6,113

(365)

5,748

Total held to maturity

$

39,574

$

$

(1,354)

$

38,220

(1)   Comprised of FHLMC, Federal National Mortgage Association (“FNMA”) and Ginnie Mae (“GNMA”) issued securities.

(2)   Comprised of U.S. Small Business Administration (“SBA”) issued securities and commercial real estate (“CRE”) secured securities issued by FNMA and FHLMC.

(3)   Comprised of FHLMC and FNMA issued securities.

During the third fiscal quarter of 2022, the Company reassessed the classification of certain investment securities and transferred $85.8 million of U.S. government and agency securities from the available for sale classification to the held to maturity classification. The net unrealized after tax gain of $18,000 was deemed insignificant and the book balance of investment securities were transferred. No gains or losses were recognized in connection with the transfer.

The contractual maturities of investment securities as of March 31, 2022 are as follows (in thousands):

Available for Sale

Held to Maturity

    

    

Estimated

    

    

Estimated

Amortized

Fair 

Amortized

Fair 

Cost

Value

Cost

Value

Due in one year or less

$

2,002

$

2,004

$

$

Due after one year through five years

 

14,073

 

13,339

 

24,344

 

23,559

Due after five years through ten years

 

63,995

 

59,735

 

39,407

 

36,305

Due after ten years

 

98,804

 

90,704

 

189,349

 

176,165

Total

$

178,874

$

165,782

$

253,100

$

236,029

Expected maturities of investment securities may differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

The fair value of temporarily impaired investment securities, the amount of unrealized losses and the length of time these unrealized losses existed are as follows at the dates indicated (in thousands):

Less than 12 months

12 months or longer

Total

    

Estimated

    

    

Estimated

    

    

Estimated

    

Fair

Unrealized

Fair

Unrealized

Fair

Unrealized

March 31, 2022

 Value

Losses

 Value

Losses

 Value

Losses

Available for sale:

 

  

 

  

 

  

 

  

 

  

 

  

Municipal securities

$

32,767

$

(4,293)

$

3,282

$

(221)

$

36,049

$

(4,514)

Agency securities

 

22,288

 

(1,565)

 

16,414

 

(1,579)

 

38,702

 

(3,144)

Real estate mortgage investment conduits (1)

 

17,334

 

(1,310)

 

15,275

 

(1,537)

 

32,609

 

(2,847)

Residential mortgage-backed securities (1)

 

15,702

 

(436)

 

 

 

15,702

 

(436)

Other mortgage-backed securities (2)

 

32,408

 

(2,194)

 

769

 

(14)

 

33,177

 

(2,208)

Total available for sale

$

120,499

$

(9,798)

$

35,740

$

(3,351)

$

156,239

$

(13,149)

Held to maturity:

Municipal securities

$

5,911

$

(816)

$

3,036

$

(606)

$

8,947

$

(1,422)

Agency securities

35,930

(1,708)

6,897

(742)

42,827

(2,450)

Real estate mortgage investment conduits (1)

26,233

(1,715)

7,735

(742)

33,968

(2,457)

Residential mortgage-backed securities (1)

111,096

(7,160)

17,363

(1,723)

128,459

(8,883)

Other mortgage-backed securities (3)

13,472

(1,153)

5,386

(706)

18,858

(1,859)

Total held to maturity

$

192,642

$

(12,552)

$

40,417

$

(4,519)

$

233,059

$

(17,071)

March 31, 2021

 

  

 

  

 

  

 

  

 

  

 

  

Available for sale:

 

  

 

  

 

  

 

  

 

  

 

  

Municipal securities

$

17,529

$

(555)

$

$

$

17,529

$

(555)

Agency securities

23,306

(686)

23,306

(686)

Real estate mortgage investment conduits (1)

 

25,462

(480)

25,462

(480)

Residential mortgage-backed securities (1)

 

33,164

 

(614)

 

33,164

 

(614)

Other mortgage-backed securities (6)

 

5,856

(125)

2,225

(51)

8,081

(176)

Total available for sale

$

105,317

$

(2,460)

$

2,225

$

(51)

$

107,542

$

(2,511)

Held to maturity:

Municipal securities

$

9,882

$

(509)

$

$

$

9,882

$

(509)

Agency securities

7,468

(220)

7,468

(220)

Real estate mortgage investment conduits (4)

9,066

(141)

9,066

(141)

Residential mortgage-backed securities (5)

6,035

(119)

6,035

(119)

Other mortgage-backed securities (3)

5,748

(365)

5,748

(365)

Total held to maturity

$

38,199

$

(1,354)

$

$

$

38,199

$

(1,354)

(1) Comprised of FHLMC, FNMA and GNMA issued securities.

(2) Comprised of SBA and CRE secured securities issued by FHLMC and FNMA.

(3) Comprised of CRE secured securities issued by FHLMC and FNMA.

(4) Comprised of FNMA issued securities.

(5) Comprised of FHLMC and FNMA issued securities.

(6) Comprised of SBA issued securities.

The unrealized losses on the Company’s investment securities were primarily attributable to increases in market interest rates subsequent to their purchase by the Company. The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields for such securities decline. The Company does not believe that these securities are other than temporarily impaired because of their credit quality or related to any issuer or industry specific event. Based on management’s evaluation and intent, the unrealized losses related to the investment securities in the above tables are considered temporary.

The Company had no sales and realized no gains or losses on sales of investment securities for both the year ended March 31, 2022 and 2021. Proceeds from the sale of investment securities totaled $17.8 million for the year ended March 31, 2020. Gross realized gains on sales of investment securities totaled $30,000 for the year ended March 31, 2020 and are included in other non-interest income in the accompanying consolidated statements of income.

Investment securities available for sale with an amortized cost of $1.3 million and $5.3 million and a fair value of $1.2 million and $5.4 million at March 31, 2022 and 2021, respectively, were pledged as collateral for government public funds held by the Bank. Investment securities held to maturity with an amortized cost of $13.7 million and $3.1 million and a fair value of $12.6 million and $3.0 million at March 31, 2022 and 2021, respectively, were pledged as collateral for government public funds held by the Bank.