Investment Securities

12 Months Ended

Jun. 30, 2021

Investment Securities

Investment Securities

Note 7 – Investment Securities

The amortized cost, gross unrealized gains and losses, and estimated fair value of investments in debt securities are as follows:

	June 30, 2021
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Available For Sale:
Mortgage-backed securities	$	55,385	$	53	$	(374)	$	55,064
U.S. agency collateralized mortgage obligations		15,641		47		(255)		15,433
U.S. government agency securities		6,952		—		(56)		6,896
Municipal bonds		20,239		11		(389)		19,861
Corporate bonds		25,200		881		—		26,081
Total Available For Sale	$	123,417	$	992	$	(1,074)	$	123,335

	June 30, 2020
			Gross		Gross
	Amortized		Unrealized		Unrealized		Fair
(Dollars in thousands)	Cost		Gains		Losses		Value
Available For Sale:
Mortgage-backed securities	$	51,570	$	272	$	(104)	$	51,738
U.S. agency collateralized mortgage obligations		3,215		33		(33)		3,215
U.S. government agency securities		6,226		2		(73)		6,155
U.S. treasury securities		1,000		—		—		1,000
Municipal bonds		10,485		33		(10)		10,508
Corporate bonds		17,399		60		(77)		17,382
Total Available For Sale	$	89,895	$	400	$	(297)	$	89,998

The Company recognized $447 thousand of gross gains and $411 thousand of gross losses on the sale of $35.7 million of investment securities during the year ended June 30, 2021. The Company recognized $241 thousand of gross gains and $3 thousand of gross losses on the sale of $13.6 million of investment securities during the year ended June 30, 2020.

During the year ended June 30, 2020, the Company transferred the remaining balance of its held to maturity securities of $1.6 million to available for sale securities. As of June 30, 2021 and 2020, the Company had no securities classified as held to maturity.

The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Maturities for mortgage-backed securities are dependent upon the rate environment and prepayments of the underlying loans. Expected maturities may differ from contractual maturities because the securities may be called or prepaid with or without penalties.

	June 30, 2021
	Available For Sale
	Amortized		Fair
(Dollars in thousands)	Cost		Value
Due in one year or less	$	—	$	—
Due after one year through five years		78		77
Due after five years through ten years		27,718		28,596
Due after ten years		95,621		94,662
	$	123,417	$	123,335

The following tables provide information on the gross unrealized losses and fair market value of the Company's investments with unrealized losses that are not deemed to be other than temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2021 and 2020:

	June 30, 2021
	Less than 12 Months				12 Months or More				Total		Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Available For Sale:
Mortgage-backed securities	$	43,152	$	(374)	$	—	$	—	$	43,152	$	(374)
U.S. agency collateralized mortgage obligations		10,613		(202)		2,407		(53)		13,020		(255)
U.S. government agency securities		6,896		(56)		—		—		6,896		(56)
Municipal bonds		17,748		(389)		—		—		17,748		(389)
Total Temporarily Impaired Securities	$	78,409	$	(1,021)	$	2,407	$	(53)	$	80,816	$	(1,074)

	June 30, 2020
	Less than 12 Months				12 Months or More				Total		Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
(Dollars in thousands)	Value		Losses		Value		Losses		Value		Losses
Available For Sale:
Mortgage-backed securities	$	22,082	$	(104)	$	—	$	—	$	22,082	$	(104)
U.S. agency collateralized mortgage obligations		1,513		(14)		1,129		(19)		2,642		(33)
U.S. government agency securities		4,922		(49)		914		(24)		5,836		(73)
Municipal bonds		3,694		(10)		—		—		3,694		(10)
Corporate bonds		5,222		(77)		—		—		5,222		(77)
Total Temporarily Impaired Securities	$	37,433	$	(254)	$	2,043	$	(43)	$	39,476	$	(297)

The Company evaluates its investment securities holdings for other-than-temporary impairment (“OTTI”) on at least a quarterly basis. As part of this process, management considers its intent to sell each debt security and whether it is more likely than not the Company will be required to sell the security before its anticipated recovery. If either of these conditions is met, OTTI is recognized in earnings equal to the entire difference between the security’s amortized cost basis and its fair value at the Statement of Financial Condition date. For securities that meet neither of these conditions, management performs analysis to determine whether any of these securities are at risk for OTTI. To determine which individual securities are at risk for OTTI and should be quantitatively evaluated utilizing a detailed analysis, management uses indicators which consider various characteristics of each security including, but not limited to, the following: the credit rating; the duration and level of the unrealized loss; prepayment assumptions; and certain other collateral-related characteristics such as delinquency rates, the security’s performance, and the severity of expected collateral losses.

The unrealized loss on securities greater than 12 months is due to current interest rate levels relative to the Company’s cost. Because the unrealized losses are due to current interest rate levels relative to the Company’s cost and not credit quality, and because the Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell these investments before recovery of its amortized cost, which may be at maturity, the Company does not consider these investments to be other-than temporarily impaired at June 30, 2021 and 2020. There were 42 investment securities that were temporarily impaired at June 30, 2021. There were 29 investment securities that were temporarily impaired at June 30, 2020.

At June 30, 2021 and 2020, $3.8 million and $3.7 million, respectively, of investment securities were pledged to secure municipal deposits.