Securities

3 Months Ended

Jun. 30, 2011

Securities

Securities

9.           Securities

Investment And Mortgage-Backed Securities, Available For Sale

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities available for sale are as follows:

	June 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair value
FHLB Securities	$	14,221,978	$	146,465	$	83,931	$	14,284,512
Federal Farm Credit Securities		1,997,280		30,990		-		2,028,270
FNMA and FHLMC Bonds		10,962,118		39,570		34,028		10,967,660
SBA Bonds		66,944,405		1,240,191		143,767		68,040,829
Tax Exempt Municipal Bonds		8,370,825		76,505		5,206		8,442,124
Mortgage-Backed Securities		227,081,534		9,007,977		16,654		236,072,857
Equity Securities		102,938		-		28,688		74,250
	$	329,681,078	$	10,541,698	$	312,274	$	339,910,502

	March 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair value
FHLB Securities	$	14,428,778	$	125,259	$	344,705	$	14,209,332
Federal Farm Credit Securities		1,997,097		9,503		-		2,006,600
FNMA and FHLMC Bonds		11,959,119		-		298,129		11,660,990
SBA Bonds		64,382,588		599,679		272,435		64,709,832
Taxable Municipal Bond		4,556,812		12,039		97,201		4,471,650
Tax Exempt Municipal Bonds		2,027,172		7,771		-		2,034,943
Mortgage-Backed Securities		233,933,275		6,681,694		534,276		240,080,693
Equity Securities		102,938		-		24,188		78,750
	$	333,387,779	$	7,435,945	$	1,570,934	$	339,252,790

FHLB securities, Federal Farm Credit securities, FNMA and FHLMC bonds, and FNMA and FHLMC mortgage-backed securities are issued by government-sponsored enterprises (“GSEs”).  GSEs are not backed by the full faith and credit of the United States government.  SBA bonds are backed by the full faith and credit of the United States government. Included in the tables above in mortgage-backed securities are GNMA mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At June 30, 2011 and March 31, 2011, the Company held an amortized cost and fair value of $140.2 million and $145.5 million, respectively and $145.1 million and $148.5 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. All mortgage-backed securities in the Company’s portfolio are either GSEs or GNMA mortgage-backed securities. The balance does not include any private label mortgage-backed securities.

The Bank received approximately $8.3 million and $13.1 million, respectively, in proceeds from sales of available for sale securities during the quarters ended June 30, 2011 and 2010 and recognized $171,000 and $200,000 in gross gains during the quarters ended June 30, 2011 and June 30, 2010, respectively.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at June 30, 2011 are shown below by contractual maturity.  Expected maturities will differ from contractual maturities because borrowers have the right to prepay obligations with or without call or prepayment penalties. Mortgage-backed securities are presented as a separate line item since paydowns are expected to occur before the contractual maturity dates.

	Amortized Cost		Fair Value
Less Than One Year	$	1,085,112	$	1,117,774
One – Five Years		8,073,665		8,226,356
Over Five – Ten Years		42,832,404		43,205,115
After Ten Years		50,608,363		51,288,400
Mortgage-Backed Securities		227,081,534		236,072,857
	$	329,681,078	$	339,910,502

The following table shows gross unrealized losses and fair value, aggregated by investment category, and length of time that individual available for sale securities have been in a continuous unrealized loss position, at June 30, 2011.

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
FHLB Securities	$	5,814,028	$	83,931	$	-	$	-	$	5,814,028	$	83,931
FNMA and FHLMC Bonds		2,962,600		34,028		-		-		2,962,600		34,028
SBA Bonds		14,440,326		143,767		-		-		14,440,326		143,767
Tax Exempt Municipals		3,994,602		5,206		-		-		3,994,602		5,206
Mortgage-Backed Securities		23,478,306		16,654		-		-		23,478,306		16,654
Equity Securities		-		-		74,250		28,688		74,250		28,688
	$	50,689,862	$	283,586	$	74,250	$	28,688	$	50,764,112	$	312,274

The following table shows gross unrealized losses and fair value, aggregated by investment category, and length of time that individual available for sale securities have been in a continuous unrealized loss position, at March 31, 2011.

	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
FHLB Securities	$	11,316,397	$	344,705	$	-	$	-	$	11,316,397	$	344,705
FNMA and FHLMC Bonds		11,660,990		298,129		-		-		11,660,990		298,129
SBA Bonds		22,878,098		272,435		-		-		22,878,098		272,435
Taxable Municipal Bond		2,452,620		97,201						2,452,620		97,201
Mortgage-Backed Securities		49,991,656		534,276		-		-		49,991,656		534,276
Equity Securities		-		-		78,750		24,188		78,750		24,188
	$	98,299,761	$	1,546,746	$	78,750	$	24,188	$	98,378,511	$	1,570,934

Securities classified as available for sale are recorded at fair market value. The Company has the ability and intent to hold these securities until such time as the value recovers or the securities mature.  The Company believes, based on industry analyst reports and credit ratings, that the deterioration in value was attributable to changes in market interest rates and is not in the credit quality of the issuer and therefore, these losses are not considered other-than-temporary. The Company reviews its investment securities portfolio at least quarterly and more frequently when economic conditions warrant, assessing whether there is any indication of other-than-temporary impairment (“OTTI”). Factors considered in the review include estimated future cash flows, length of time and extent to which market value has been less than cost, the financial condition and near term prospects of the issuer, and our intent and ability to retain the security to allow for an anticipated recovery in market value.

If the review determines that there is OTTI, then an impairment loss is recognized in earnings equal to the entire difference between the investment’s cost and its fair value at the balance sheet date of the reporting period for which the assessment is made, or a portion may be recognized in other comprehensive income. The fair value of investments on which OTTI is recognized then becomes the new cost basis of the investment.

Investment and Mortgage-Backed Securities, Held to Maturity

The amortized cost, gross unrealized gains, gross unrealized losses, and fair values of investment and mortgage-backed securities held to maturity are as follows:

June 30, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Securities	$	9,032,115	$	354,205	$	-	$	9,386,320
Federal Farm Credit Securities		991,431		9,029		-		1,000,460
FNMA Bonds		999,000		-		-		999,000
SBA Bonds		3,857,085		308,800		-		4,165,885
Mortgage-Backed Securities		27,419,659		714,043		24,659		28,109,043
Equity Securities		155,000		-		-		155,000
Total	$	42,454,290	$	1,386,077	$	24,659	$	43,815,708

March 31, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Securities	$	10,040,055	$	297,670	$	694	$	10,337,031
SBA Bonds		3,856,483		242,167		-		4,098,650
Mortgage-Backed Securities		19,113,587		418,657		-		19,532,244
Equity Securities		155,000		-		-		155,000
	$	33,165,125	$	958,494	$	694	$	34,122,925

Included in the tables above in mortgage-backed securities are GNMA mortgage-backed securities, which are also backed by the full faith and credit of the United States government.  At June 30, 2011, the Company held an amortized cost and fair value of $25.1 million and $25.7 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. At March 31, 2011, the Company held an amortized cost and fair value of $16.5 million and $16.8 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. All mortgage-backed securities in the Company’s portfolio above are either GSEs or GNMA mortgage-backed securities. The balance does not include any private label mortgage-backed securities.

The amortized cost and fair value of investment and mortgage-backed securities held to maturity at June 30, 2011, by contractual maturity, are shown below.  Expected maturities will differ from contractual maturities resulting from call features on certain investments. Mortgage-backed securities are presented as a separate line item since paydowns are expected to occur before the contractual maturity dates.

	Amortized Cost		Fair Value
Less Than One Year	$	-	$	-
One – Five Years		5,980,225		6,315,119
Over Five – Ten Years		5,029,323		5,058,000
More Than Ten Years		4,025,083		4,333,546
Mortgage-Backed Securities		27,419,659		28,109,043
	$	42,454,290	$	43,815,708

The Company had two held to maturity mortgage-backed securities with a market value totaling $4.4 million in an unrealized loss position at June 30, 2011. These securities had been in an unrealized loss position for less than 12 months. The Company had only one held to maturity security that was in an unrealized loss position at March 31, 2011. The fair value of this FHLB security was $1.0 million and the unrealized loss was $1,000. The security had been in an unrealized loss position for less than 12 months. The Company’s held to maturity portfolio is recorded at amortized cost.  The Company has the ability and intends to hold these securities to maturity. There were no sales of securities held to maturity during the quarters ended June 30, 2011 or 2010, or during the year ended March 31, 2011.