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Securities
12 Months Ended
Jun. 30, 2013
Investments Debt And Equity Securities [Abstract]  
Securities
NOTE 3:        Securities

 
The Company’s investment policy requires that the Company purchase only high-grade investment securities.  Most municipal obligations are categorized as “A” or better by a nationally recognized statistical rating organization.  These ratings are achieved because the securities are backed by the full faith and credit of the municipality and also supported by third-party credit insurance policies.  Mortgage backed securities and collateralized mortgage obligations are issued by government sponsored corporations, including Federal Home Loan Mortgage Corporation, Fannie Mae, and the Guaranteed National Mortgage Association.  The amortized cost and fair values of securities, together with unrealized gains and losses, are as follows:
 
   
June 30, 2013
                         
         
Gross
   
Gross
       
(Dollars in Thousands)
 
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
Available for Sale
 
Cost
   
Gains
   
Losses
   
Value
 
                         
U.S. Government and agency
  $ 50,904     $ 514     $ (487 )   $ 50,931  
Municipal obligations
    88,948       1,072       (5,584 )     84,436  
Corporate obligations
    9,130       84       (153 )     9,061  
Mortgage-backed securites - government-backed
    27,680       35       (813 )     26,902  
CMOs - government backed
    48,594       307       (1,268 )     47,633  
                                 
Total securities available for sale
  $ 225,256     $ 2,012     $ (8,305 )   $ 218,963  
                                 
                                 
   
June 30, 2012
                                 
           
Gross
   
Gross
         
(Dollars in Thousands)
 
Amortized
   
Unrealized
   
Unrealized
   
Fair
 
Available for Sale
 
Cost
   
Gains
   
Losses
   
Value
 
                                 
U.S. Government and agency
  $ 20,557     $ 508     $ (10 )   $ 21,055  
Municipal obligations
    39,332       2,835       (107 )     42,060  
Corporate obligations
    3,937       82       (74 )     3,945  
Mortgage-backed securites - government-backed
    6,791       56       -       6,847  
Private label CMOs
    210       -       (41 )     169  
CMOs - government backed
    14,807       416       (22 )     15,201  
                                 
Total securities available for sale
  $ 85,634     $ 3,897     $ (254 )   $ 89,277  
 
 
The Company has not entered into any interest rate swaps, options, or futures contracts relating to investment securities.

 
Gross recognized gains on securities available-for-sale were $1,323,000 and $512,000 for the years ended June 30, 2013 and 2012, respectively.  Gross realized losses on securities available-for-sale were $62,000, and $22,000 for the years ended June 30, 2013 and 2012, respectively.
 
 
The amortized cost and fair value of securities at June 30, 2013 by contractual maturity are shown below.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
 
             
   
Amortized
   
Fair
 
(Dollars in Thousands)
 
Cost
   
Value
 
             
Due in one year or less
  $ 5,159     $ 5,217  
Due from one to five years
    11,220       11,537  
Due from five to ten years
    21,687       21,682  
Due after ten years
    110,916       105,992  
                 
      148,982       144,428  
                 
Mortgage-backed securites - government-backed
    27,680       26,902  
CMOs - government backed
    48,594       47,633  
Total
  $ 225,256     $ 218,963  
 
Maturities of securities do not reflect repricing opportunities present in adjustable rate securities.

 
At June 30, 2013 and 2012, securities with a carrying value of $9,640,000 and $14,665,000, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

 
The following table discloses, as of June 30, 2013 and 2012, the Company’s investment securities that have been in a continuous unrealized-loss position for less than 12 months and those that have been in a continuous unrealized loss position for 12 or more months:
 
   
Less than 12 months
 
12 months or longer
                         
   
June 30, 2013
(Dollars in Thousands)
                       
   
Estimated
   
Gross
   
Estimated
   
Gross
 
   
Market
   
Unrealized
   
Market
   
Unrealized
 
   
Value
   
Losses
   
Value
   
Losses
 
                         
U.S. Government and agency
  $ 19,615     $ 487     $ -     $ -  
Corporate obligations
    5,017       153       -       -  
Municipal obligations
    60,910       5,495       539       89  
Mortgage-backed & CMOs
    52,548       2,080       309       1  
                                 
Total
  $ 138,090     $ 8,215     $ 848     $ 90  
                                 
   
June 30, 2012
                                 
U.S. Government and agency
  $ 1,751     $ 8     $ 341     $ 2  
Corporate obligations
    -       -       884       74  
Municipal obligations
    1,760       2       1,402       105  
Private label CMOs
    -       -       168       41  
Mortgage-backed & CMOs
    2,514       22       -       -  
                                 
Total
  $ 6,025     $ 32     $ 2,795     $ 222  

The table above shows the Company’s investment gross unrealized losses and fair values, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at June 30, 2013 and 2012.  126 and 25 securities were in an unrealized loss position as of June 30, 2013 and 2012, respectively.

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation.  Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2013, 98 U.S. Government and agency securities and municipal obligations have unrealized losses with aggregate depreciation of approximately 6.96% from the Company's amortized cost basis.  These unrealized losses are principally due to changes in interest rates and credit spreads.  In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts' reports.  The fair value of these securities represents less than 36.1% of the total fair value of all securities available for sale and their unrealized loss is less than $6,071,000 as of June 30, 2013.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be other than temporary.

At June 30, 2013, 23 mortgage backed and CMO securities have unrealized losses with aggregate depreciation of approximately 3.79% from the Company’s cost basis. We believe these unrealized losses are principally due to the credit market’s concerns regarding the stability of the mortgage market. Management considers available evidence to assess whether it is more likely-than-not that all amounts due would not be collected. In such assessment, management considers the severity and duration of the impairment, the credit ratings of the security, the overall deal and payment structure, including the Company's position within the structure, underlying obligor, financial condition and near term prospects of the issuer, delinquencies, defaults, loss severities, recoveries, prepayments, cumulative loss projections, discounted cash flows and fair value estimates. There has been no disruption of the scheduled cash flows on any of the securities. Management’s analysis as of June 30, 2013 revealed no expected credit losses on the securities.

At June 30, 2013, 5 corporate obligation had an unrealized loss with aggregate depreciation of approximately 2.96% from the Company's cost basis.  This unrealized loss is principally due to changes in interest rates.  No credit issues have been identified that cause management to believe the declines in market value are other than temporary.  In analyzing the issuer's financial condition, management considers industry analysts' reports, financial performance and projected target prices of investment analysts within a one-year time frame.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be other than temporary.

At June 30, 2012, 17 U.S. Government and agency securities and municipal obligations have unrealized losses with aggregate depreciation approximately 3.57% from the Company's amortized cost basis.  These unrealized losses are principally due to changes in interest rates and credit spreads.  In analyzing an issuer's financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and industry analysts' reports.  The fair value of these securities represents approximately 3.54% of the total fair value of all securities available for sale and their unrealized loss is less than $115,000 as of June 30, 2012.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be other than temporary.
 
At June 30, 2012, 7 mortgage backed and CMO securities have unrealized losses with aggregate depreciation of approximately 2.33% from the Company’s cost basis. We believe these unrealized losses are principally due to the credit market’s concerns regarding the stability of the mortgage market. Management considers available evidence to assess whether it is more likely-than-not that all amounts due would not be collected. In such assessment, management considers the severity and duration of the impairment, the credit ratings of the security, the overall deal and payment structure, including the Company's position within the structure, underlying obligor, financial condition and near term prospects of the issuer, delinquencies, defaults, loss severities, recoveries, prepayments, cumulative loss projections, discounted cash flows and fair value estimates. There has been no disruption of the scheduled cash flows on any of the securities. Management’s analysis as of June 30, 2012 revealed no expected credit losses on the securities. One of the CMO securities is non-agency securities (backed by Alt-A collateral) which has a rating below investment grade from the credit rating agencies. The fair value of this security represents less than 0.19% of the total fair value of all securities available for sale and its unrealized loss is $41,000 as of June 30, 2012.

At June 30, 2012, 1 corporate obligation had an unrealized loss with aggregate depreciation of approximately 7.72% from the Company's cost basis.  This unrealized loss is principally due to changes in interest rates.  No credit issues have been identified that cause management to believe the declines in market value are other than temporary.  In analyzing the issuer's financial condition, management considers industry analysts' reports, financial performance and projected target prices of investment analysts within a one-year time frame.  As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be other than temporary.