9. Securities

6 Months Ended

Sep. 30, 2012

Notes

9. 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, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	value
FHLB Securities	$4,269,534	$61,306	$6,440	$4,324,400
SBA Bonds	87,318,223	2,247,321	69,768	89,495,776
Tax Exempt Municipal Bonds	32,331,876	1,902,485	23,069	34,211,292
Mortgage-Backed Securities	222,623,248	9,164,426	74,282	231,713,392
Equity Securities	102,938	-	27,188	75,750
Total	$346,645,819	$13,375,538	$200,747	$359,820,610

	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 September 30, 2012 and March 31, 2012, the Company held an amortized cost and fair value of $145.9 million and $152.3 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 $23.4 million and $34.2 million, respectively, in proceeds from sales of available for sale securities during the six months ended September 30, 2012 and 2011 and recognized $428,000 and $556,000 in gross gains during the six months ended September 30, 2012 and September 30, 2011, respectively. No losses were recognized on the sale of available for sale securities during the six months ended September 30, 2012 or 2011. The Bank received $15.6 million and $25.9 million, respectively, in proceeds from sales of available for sale securities during the three months ended September 30, 2012 and 2011 and recognized $325,000 and $385,000 in gross gains during the three months ended September 30, 2012 and September 30, 2011, respectively. No losses were recognized on the sale of available for sale securities during the three months ended September 30, 2012 or 2011.

The amortized cost and fair value of investment and mortgage-backed securities available for sale at September 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	10,075,596	10,320,827
Over Five – Ten Years	57,636,711	59,062,266
After Ten Years	56,310,264	58,724,125
Mortgage-Backed Securities	222,623,248	231,713,392
Total	$346,645,819	$359,820,610

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.

	September 30, 2012
	Less than 12 Months		12 Months or More		Total
	Fair	Unrealized	Fair	Unrealized	Fair	Unrealized
	Value	Losses	Value	Losses	Value	Losses
FHLB Securities	$2,992,640	$6,440	$-	$-	$2,992,640	$6,440
SBA Bonds	8,311,848	69,768	-	-	8,311,848	69,768
Tax Exempt Municipal Bond	4,707,560	23,069	-	-	4,707,560	23,069
Mortgage-Backed Securities	12,976,259	68,469	1,423,642	5,813	14,399,901	74,282
Equity Securities	-	-	75,750	27,188	75,750	27,188
Total	$28,988,307	$167,746	$1,499,392	$33,001	$30,487,699	$200,747

	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:

	September 30, 2012
		Gross	Gross
	Amortized	Unrealized	Unrealized	Fair
	Cost	Gains	Losses	Value
FHLB Securities	$5,394,805	$152,937	$-	5,547,742
Federal Farm Credit Securities	1,999,556	7,924	-	2,007,480
FNMA and FHLMC Bonds	4,988,376	34,614	-	5,022,990
SBA Bonds	6,287,213	318,768	29,730	6,576,251
Mortgage-Backed Securities	50,208,062	2,872,249	45,853	53,034,458
Equity Securities	155,000	-	-	155,000
Total	$69,033,012	$3,386,492	$75,583	$72,343,921

	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 backed by the full faith and credit of the United States government.  At September 30, 2012, the Company held an amortized cost and fair value of $45.9 million and $48.7 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 September 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	$3,000,000	$3,111,550
One – Five Years	395,831	408,538
Over Five – Ten Years	7,021,946	7,034,476
More Than Ten Years	8,407,173	8,754,899
Mortgage-Backed Securities	50,208,062	53,034,458
Total	$69,033,012	$72,343,921

The following tables show the held to maturity securities in an unrealized loss position at the time indicated.

	September 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	$3,647,501	$29,730	$-	$-	$3,647,501	$29,730
Mortgage Backed Securities	3,229,093	45,853	-	-	3,229,093	45,853
Total	$6,876,594	$75,583	$-	$-	$6,876,594	$75,583

	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 six months ended September 30, 2012 or 2011, or during the year ended March 31, 2012.