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Mortgage-backed Securities

9 Months Ended

Dec. 31, 2014

6. MORTGAGE-BACKED SECURITIES

Mortgage-backed securities held to maturity consisted of the following at the dates indicated (in thousands):

		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

December 31, 2014
Mortgage-backed securities ⁽¹⁾	$	88	$	2	$	-	$	90
March 31, 2014
Mortgage-backed securities ⁽¹⁾	$	101	$	3	$	-	$	104

⁽¹⁾ Comprised of Federal National Mortgage Association (“FNMA”) and Federal Home Loan Mortgage Corporation (“ FHLMC”) issued securities.

The contractual maturities of mortgage-backed securities classified as held to maturity are as follows (in thousands):

December 31, 2014		Amortized Cost		Estimated Fair Value

Due in one year or less	$	-	$	-
Due after one year through five years		-		-
Due after five years through ten years		75		77
Due after ten years		13		13
Total	$	88	$	90

Mortgage-backed securities held to maturity with an amortized cost of $28,000 and $36,000 and a fair value of $28,000 and $37,000 at December 31, 2014 and March 31, 2014, respectively, were pledged as collateral for governmental public funds held by the Company.

Mortgage-backed securities available for sale consisted of the following at the dates indicated (in thousands):

December 31, 2014		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value

Real estate mortgage investment conduits ⁽¹⁾	$	23,802	$	56	$	(54	)	$	23,804
Mortgage-backed securities ⁽²⁾		71,240		614		(107	)		71,747
Other mortgage-backed securities ⁽³⁾		5,571		110		(16	)		5,665
Total	$	100,613	$	780	$	(177	)	$	101,216
March 31, 2014
Real estate mortgage investment conduits	$	7,218	$	9	$	(77	)	$	7,150
Mortgage-backed securities		65,858		102		(547	)		65,413
Other mortgage-backed securities		6,007		18		(13	)		6,012
Total	$	79,083	$	129	$	(637	)	$	78,575

⁽¹⁾ Comprised of FHLMC and FNMA issued securities.
⁽²⁾ Comprised of FHLMC, FNMA and Ginnie Mae (“GNMA”) issued securities.
⁽³⁾ Comprised of U.S. Small Business Administration (“SBA”) issued securities and commercial real estate (“CRE”) secured securities issued by private issuers.

The contractual maturities of mortgage-backed securities available for sale are as follows (in thousands):

December 31, 2014		Amortized Cost		Estimated Fair Value

Due in one year or less	$	-	$	-
Due after one year through five years		2,478		2,493
Due after five years through ten years		5,585		5,616
Due after ten years		92,550		93,107
Total	$	100,613	$	101,216

The fair value of temporarily impaired securities, the amount of unrealized losses and the length of time these unrealized losses existed are as follows at the dates indicated (in thousands):

	*Less than 12 months*					*12 months or longer*					*Total*
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses

December 31, 2014

Real estate mortgage investment conduits	$	14,822	$	(54	)	$	-	$	-		$	14,822	$	(54	)
Mortgage-backed securities ⁽¹⁾		4,348		(7	)		5,202		(100	)		9,550		(107	)
Other mortgage-backed securities ⁽²⁾		-		-			1,451		(16	)		1,451		(16	)
Total	$	19,170	$	(61	)	$	6,653	$	(116	)	$	25,823	$	(177	)

March 31, 2014

Real estate mortgage investment conduits	$	4,996	$	(77	)	$	-	$	-	$	4,996	$	(77	)
Mortgage-backed securities		49,177		(547	)		-		-		49,177		(547	)
Other mortgage-backed securities		1,526		(13	)		-		-		1,526		(13	)
Total	$	55,699	$	(637	)	$	-	$	-	$	55,699	$	(637	)

⁽¹⁾ Comprised of FHLMC and FNMA issued securities.
⁽²⁾ Comprised of SBA issued securities.

The unrealized losses on the above mortgage-backed securities were primarily attributable to increases in market interest rates subsequent to their purchase by the Company. The Company expects the fair value of the mortgage-backed securities to recover as the mortgage-backed securities approach their maturity dates or sooner if market yields for such securities decline. The Company does not believe that the mortgage-backed securities are impaired because of their credit quality or related to any issuer or industry specific event. Based on management’s evaluation and intent, the unrealized losses related to the mortgage-backed securities in this table are considered temporary.

Expected maturities of mortgage-backed securities held to maturity and available for sale will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

Proceeds from sale of mortgage-backed securities totaled $14.3 million for the three and nine months ended December 31, 2014. Gross realized gains on sales of mortgage-backed securities totaled $127,000 for both the three and nine months ended December 31, 2014. The Company had no sales and no realized gains or losses on mortgage-backed securities for the three and nine months ended December 31, 2013. Mortgage-backed securities available for sale with an amortized cost of $1.5 million and $1.7 million and a fair value of $1.5 million and $1.7 million at December 31, 2014 and March 31, 2014, respectively, were pledged as collateral for government public funds held by the Bank.