The following two tables summarize the fair values, gross unrealized and unrecognized losses and the number of securities impaired within the available for sale and held to maturity portfolios at March 31, 2019 and June 30, 2018. The gross unrealized and unrecognized losses, presented by security type, represent temporary impairments of value within each portfolio as of the dates presented. Temporary impairments within the available for sale portfolio have been recognized through other comprehensive loss as reductions in stockholders’ equity on a tax-effected basis.

The tables are followed by a discussion that summarizes the Company’s rationale for recognizing impairments, where applicable, as temporary versus those identified as other-than-temporary. Such rationale is presented by investment type and generally applies consistently to both the available for sale and held to maturity portfolios, except where specifically noted.

	March 31, 2019
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(Dollars in Thousands)
Securities Available for Sale:
U.S. agency securities	$	-	$	-	$	3,737	$	28		8	$	3,737	$	28
Obligations of state and political subdivisions		-		-		6,583		37		15		6,583		37
Asset-backed securities		35,733		242		14,682		26		6		50,415		268
Collateralized loan obligations		153,332		1,047		54,574		577		20		207,906		1,624
Corporate bonds		67,193		801		44,421		558		12		111,614		1,359
Trust preferred securities		-		-		2,775		192		2		2,775		192
Collateralized mortgage obligations		-		-		21,660		582		6		21,660		582
Residential pass-through securities		-		-		67,566		1,193		13		67,566		1,193

Total	$	256,258	$	2,090	$	215,998	$	3,193		82	$	472,256	$	5,283

	June 30, 2018
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Number of Securities		Fair Value		Unrealized Losses
	(Dollars in Thousands)
Securities Available for Sale:
U.S. agency securities	$	2,579	$	43	$	1,832	$	20		9	$	4,411	$	63
Obligations of state and political subdivisions		24,443		672		540		37		65		24,983		709
Asset-backed securities		-		-		24,728		134		3		24,728		134
Collateralized loan obligations		189,258		914		-		-		19		189,258		914
Corporate bonds		5,035		4		64,184		790		6		69,219		794
Trust preferred securities		-		-		2,783		184		2		2,783		184
Collateralized mortgage obligations		4,635		135		19,658		1,224		7		24,293		1,359
Residential pass-through securities		63,889		1,921		26,697		1,573		19		90,586		3,494
Commercial pass-through securities		3,890		66		3,982		8		2		7,872		74

Total	$	293,729	$	3,755	$	144,404	$	3,970		132	$	438,133	$	7,725

	March 31, 2019
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Number of Securities		Fair Value		Unrecognized Losses
	(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions	$	2,235	$	3	$	35,556	$	177		79	$	37,791	$	180
Subordinated debt		20,212		182		4,991		9		6		25,203		191
Collateralized mortgage obligations		-		-		10,088		298		6		10,088		298
Residential pass-through securities		283		1		101,874		1,624		86		102,157		1,625
Commercial pass-through securities		-		-		43,401		185		8		43,401		185

Total	$	22,730	$	186	$	195,910	$	2,293		185	$	218,640	$	2,479

	June 30, 2018
	Less than 12 Months				12 Months or More				Total
	Fair Value		Unrecognized Losses		Fair Value		Unrecognized Losses		Number of Securities		Fair Value		Unrecognized Losses
	(Dollars in Thousands)
Securities Held to Maturity:
Obligations of state and political subdivisions	$	86,678	$	1,662	$	3,151	$	203		190	$	89,829	$	1,865
Subordinated debt		41,010		284		-		-		7		41,010		284
Collateralized mortgage obligations		42,712		753		12,730		595		8		55,442		1,348
Residential pass-through securities		133,859		2,258		61,760		1,747		131		195,619		4,005
Commercial pass-through securities		172,382		2,867		1,191		3		35		173,573		2,870

Total	$	476,641	$	7,824	$	78,832	$	2,548		371	$	555,473	$	10,372

In general, if the fair value of a debt security is less than its amortized cost basis at the time of evaluation, the security is impaired and the impairment is to be evaluated to determine if it is other than temporary. The Company evaluates the impaired securities in its portfolio for possible other than temporary impairment (“OTTI”) on at least a quarterly basis. The following represents the circumstances under which an impaired security is determined to be other-than-temporarily impaired: (i) when the Company intends to sell the impaired debt security; (ii) when the Company more likely than not will be required to sell the impaired debt security before recovery of its amortized cost; or (iii) when an impaired debt security does not meet either of the two conditions above, but the Company does not expect to recover the entire amortized cost of the security.

In the first two circumstances noted above, the amount of OTTI to be recognized in earnings is the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date. In the third circumstance, however, the OTTI is to be separated into the amount representing the credit loss from the amount related to all other factors. The credit loss component is to be recognized in earnings while the non-credit loss component is to be recognized in other comprehensive income. In these cases, OTTI is generally predicated on an adverse change in cash flows versus those expected at the time of purchase. The absence of an adverse change in expected cash flows generally indicates that a security’s impairment is related to other non-credit loss factors and is thereby generally not recognized as OTTI.

The Company considers a variety of factors when determining whether a credit loss exists for an impaired security including, but not limited to (i) the length of time and the extent to which the fair value has been less than the amortized cost basis; (ii) adverse conditions specifically related to the security, an industry, or a geographic area; (iii) the historical and implied volatility of the fair value of the security; (iv) the payment structure of the debt security; (v) actual or expected failure of the issuer of the security to make scheduled interest or principal payments; (vi) changes to the rating of the security by external rating agencies; and (vii) recoveries or additional declines in fair value subsequent to the balance sheet date. The Company regularly monitors the historical cash flows and financial strength of all issuers and/or guarantors to confirm that security impairment, where applicable, is not due to an actual or expected adverse change in security cash flows that would result in the recognition of credit-related OTTI.

The unrealized and unrecognized losses on the Company’s securities are due to the combined effects of several market-related factors including, most notably, changes in market interest rates and changing market conditions which affect the supply and demand for such securities. Those market conditions may fluctuate over time resulting in certain securities being impaired for periods in excess of 12 months. However, the longevity of such impairment is not necessarily reflective of an expectation for an adverse change in cash flows signifying a credit loss. Consequently, the impairments of value resulting directly from these changing market conditions are considered non-credit related and temporary in nature.

The Company has the stated ability and intent to hold until forecasted recovery those securities so designated at March 31, 2019 and does not intend to sell the temporarily impaired available for sale securities prior to the recovery of their fair value to a level equal to or greater than the Company’s amortized cost. Furthermore, the Company has concluded that the possibility of being required to sell the securities prior to their anticipated recovery is unlikely. In light of the factors noted above, the Company does not consider its balance of securities with unrealized and unrecognized losses at March 31, 2019 and June 30, 2018, to be other-than-temporarily impaired as of those dates.