Securities

3 Months Ended

Sep. 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:

September 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Securities	$	8,920,437	$	173,802	$	-	$	9,094,239
FNMA and FHLMC Bonds		4,968,895		37,785		-		5,006,680
SBA Bonds		73,902,116		1,828,519		94,715		75,635,920
Tax  Exempt Municipal Bonds		14,253,727		749,169		2,963		14,999,933
Mortgage-Backed Securities		221,450,640		9,593,960		107,905		230,936,695
Equity Securities		102,938		-		38,588		64,350
	$	323,598,753	$	12,383,235	$	244,171	$	335,737,817

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 September 30, 2011 and March 31, 2011, the Company held an amortized cost and fair value of $138.5 million and $144.5 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 $25.9 million and $16.8 million, respectively, in proceeds from sales of available for sale securities during the quarters ended September 30, 2011 and 2010 and recognized approximately $385,000 in gross gains during the quarter ended September 30, 2011 and $496,000 in gross gains during the quarter ended September 30, 2010. The Bank received approximately $34.2 million and $29.9 million, respectively, in proceeds from sales of available for sale securities during the six months ended September 30, 2011 and 2010 and recognized approximately $556,000 in gross gains during the six months ended September 30, 2011 and $695,000 in gross gains during the six months ended September 30, 2010.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at September 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.

September 30, 2011	Amortized Cost		Fair Value
Less Than One Year	$	1,018,912	$	1,047,168
One – Five Years		8,833,204		9,045,393
Over Five – Ten Years		36,103,529		36,575,715
After Ten Years		56,192,468		58,132,846
Mortgage-Backed Securities		221,450,640		230,936,695
	$	323,598,753	$	335,737,817

The following tables show 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, as of the table date;

September 30, 2011	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Mortgage-Backed Securities	$	11,141,616	$	107,905	$	-	$	-	$	11,141,616	$	107,905
Tax Exempt Municipal Bonds		350,992		2,963		-		-		350,992		2,963
SBA Bonds		17,025,543		94,715		-		-		17,025,543		94,715
Equity Securities		-		-		64,350		38,588		64,350		38,588
	$	28,518,151	$	205,583	$	64,350	$	38,588	$	28,582,501	$	244,171

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. At September 30, 2011, approximately 15.8% of the unrealized losses, or one individual security, consisted of securities in a continuous loss position for 12 months or more.  At March 31, 2011, approximately 15% of unrealized losses, or one individual security, consisted of securities in a continuous loss position for 12 months or more.  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 is 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:

September 30, 2011	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
FHLB Securities	$	10,035,786	$	311,314	$	-	$	10,347,100
FNMA and FHLMC Bonds		1,993,033		33,697		-		2,026,730
SBA Bonds		3,491,020		329,917		-		3,820,937
Mortgage-Backed Securities		33,663,775		1,076,561		1,810		34,738,526
Equity Securities		155,000		-		-		155,000
Total	$	49,338,614	$	1,751,489	$	1,810	$	51,088,293

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

FHLB securities, Federal Farm Credit securities, and FNMA and FHLMC mortgage-backed securities are issued by 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 September 30, 2011, the Company held an amortized cost and fair value of $31.6 million and $32.6 million, respectively, in GNMA mortgage-backed securities which are included in mortgage-backed securities in the table 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 in the table 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 September 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.

September 30, 2011	Amortized Cost		Fair Value
Less Than One Year	$	-	$	-
One – Five Years		6,867,024		7,167,107
Over Five – Ten Years		5,035,080		5,077,510
More Than Ten Years		3,772,735		4,105,150
Mortgage-Backed Securities		33,663,775		34,738,526
	$	49,338,614	$	51,088,293

The Company had one security in an unrealized loss position at September 30, 2011. The fair value of this GNMA pool was $2.2 million and the unrealized loss was $2,000. The security had been in an unrealized loss position for less than 12 months. At March 31, 2011, the Company also had one security in an unrealized loss position. The fair value of the 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 three or six months ended September 30, 2011 or 2010, or during the year ended March 31, 2011.