Investment And Mortgage-Backed Securities, Available For Sale

3 Months Ended

Jun. 30, 2012

Notes

Investment And Mortgage-Backed Securities, Available For Sale

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, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,440,263	$71,377	$-	$2,511,640
FNMA and FHLMC Bonds	1,000,000	790	-	1,000,790
SBA Bonds	87,773,083	1,730,497	102,561	89,401,019
Tax Exempt Municipal Bonds	30,632,658	1,398,464	61,695	31,969,427
Mortgage-Backed Securities	224,933,434	8,589,965	141,795	233,381,604
Equity Securities	102,938	-	30,188	72,750
Total	$346,882,376	$11,791,093	336,239	$358,337,230

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$2,634,234	$64,660	$-	$2,698,894
FNMA and FHLMC Bonds	2,926,566	560	5,275	2,921,851
SBA Bonds	85,064,224	1,357,490	142,912	86,278,802
Tax Exempt Municipal Bonds	23,231,375	971,739	77,389	24,125,725
Mortgage-Backed Securities	229,462,521	8,486,387	95,073	237,853,835
Equity Securities	102,938	-	27,188	75,750
Total	$343,421,858	$10,880,836	$347,837	$353,954,857

FHLB 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, 2012 and March 31, 2012, the Company held an amortized cost and fair value of $147.8 million$147,800,000 and $153.5 million, respectively, and $143.8 million and $149.3 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 $7.8 million and $8.3 million, respectively, in proceeds from sales of available for sale securities during the quarters ended June 30, 2012 and 2011 and recognized $104,000 and $171,000 in gross gains during the quarters ended June 30, 2012 and June 30, 2011, respectively.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at June 30, 2012 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	Fair
	Cost	Value
Less Than One Year	$-	$-
One – Five Years	11,294,504	11,549,597
Over Five – Ten Years	49,782,758	50,761,034
After Ten Years	60,871,680	62,644,995
Mortgage-Backed Securities	224,933,434	233,381,604
Total	$346,882,376	$358,337,230

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 for the periods indicated.

	June 30, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
SBA Bonds	$10,726,866	$102,561	$-	$-	$10,726,866	$102,561
Tax Exempt Municipal Bond	8,577,089	61,695	-	-	8,577,089	61,695
Mortgage-Backed Securities	21,961,960	141,795	-	-	21,961,960	141,795
Equity Securities	-	-	72,750	30,188	72,750	30,188
Total	$41,265,915	$306,051	$72,750	$30,188	$41,338,665	$336,239

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FNMA And FHLMC Bonds	$1,921,291	$5,275	$-	$-	$1,921,291	$5,275
SBA Bonds	12,508,821	142,912	-	-	12,508,821	142,912
Tax Exempt Municipal Bond	3,390,580	77,389	-	-	3,390,580	77,389
Mortgage-Backed Securities	23,053,784	95,073	-	-	23,053,784	95,073
Equity Securities	-	-	75,750	27,188	75,750	27,188
Total	$40,874,476	$320,649	$75,750	$27,188	$40,950,226	$347,837

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, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$10,547,804	$196,752	$-	10,744,556
Federal Farm Credit Securities	1,999,540	13,720	-	2,013,260
FNMA and FHLMC Bonds	5,985,244	46,006	-	6,031,250
SBA Bonds	3,251,636	356,074	-	3,607,710
Mortgage-Backed Securities	43,150,174	2,002,208	-	45,152,382
Equity Securities	155,000	-	-	155,000
Total	$65,089,398	$2,614,760	$-	67,704,158

	March 31, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$11,554,627	$221,726	$13,517	$11,762,836
FFCB Securities	1,999,516	6,534	23,410	1,982,640
FNMA and FHLMC Bonds	6,983,004	19,863	49,147	6,953,720
SBA Bonds	3,251,151	305,430	-	3,556,581
Mortgage-Backed Securities	43,732,912	1,822,180	-	45,555,092
Equity Securities	155,000	-	-	155,000
Total	$67,676,210	$2,375,733	$86,074	$69,965,869

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, 2012, the Company held an amortized cost and fair value of $41.9 million and $43.8 million, respectively, in GNMA mortgage-backed securities included in mortgage-backed securities listed above. At March 31, 2012, the Company held an amortized cost and fair value of $42.2 million and $43.9 million, respectively, in GNMA mortgage-backed securities, which are included in mortgage-backed securities line item 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 June 30, 2012, 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	Fair
	Cost	Value
Less Than One Year	$1,000,000	$1,045,040
One – Five Years	5,368,392	5,505,044
Over Five – Ten Years	7,990,319	8,039,860
More Than Ten Years	7,580,513	7,961,832
Mortgage-Backed Securities	43,150,174	45,152,382
Total	$65,089,398	$67,704,158

The Company did not have any held to maturity securities in an unrealized loss position at June 30, 2012. The following table shows the held to maturity securities in an unrealized loss position at March 31, 2012.

	March 31, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FHLB Securities	$4,532,636	$13,517	$-	$-	$4,532,636	$13,517
FFCB Securities	976,590	23,410	-	-	976,590	23,410
FNMA And FHLMC Bonds	4,939,150	49,147	-	-	4,939,150	49,147
Total	$10,448,376	$86,074	$-	$-	$10,448,376	$86,074

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, 2012 or 2011, or during the year ended March 31, 2012.