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Mortgage-backed Securities

6 Months Ended

Sep. 30, 2015

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

September 30, 2015
Mortgage-backed securities ⁽¹⁾	$	80	$	2	$	-	$	82

March 31, 2015
Mortgage-backed securities ⁽¹⁾	$	86	$	2	$	-	$	88

⁽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 as of September 30, 2015 are as follows (in thousands):

		Amortized Cost		Estimated Fair Value

Due after five years through ten years	$	69	$	71
Due after ten years		11		11
Total	$	80	$	82

Mortgage-backed securities held to maturity with an amortized cost of $25,000 and $27,000 and a fair value of $26,000 and $27,000 at September 30, 2015 and March 31, 2015, respectively, were pledged as collateral for government public funds held by the Bank.

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

September 30, 2015		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value

Real estate mortgage investment conduits ⁽¹⁾	$	35,672	$	316	$	(1	)	$	35,987
Mortgage-backed securities ⁽¹⁾		76,940		783		(103	)		77,620
Other mortgage-backed securities ⁽²⁾		5,140		86		(12	)		5,214
Total	$	117,752	$	1,185	$	(116	)	$	118,821
March 31, 2015
Real estate mortgage investment conduits ⁽¹⁾	$	22,455	$	255	$	(1	)	$	22,709
Mortgage-backed securities ⁽¹⁾		67,568		1,006		(60	)		68,514
Other mortgage-backed securities ⁽²⁾		5,359		142		(12	)		5,489
Total	$	95,382	$	1,403	$	(73	)	$	96,712

⁽¹⁾ Comprised of FHLMC, FNMA and Ginnie Mae (“GNMA”) issued securities.
⁽²⁾ 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 as of September 30, 2015 are as follows (in thousands):

		Amortized Cost		Estimated Fair Value

Due in one year or less	$	1	$	1
Due after one year through five years		2,473		2,513
Due after five years through ten years		6,792		6,846
Due after ten years		108,486		109,461
Total	$	117,752	$	118,821

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.

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
		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses

September 30, 2015

Real estate mortgage investment conduits ⁽¹⁾	$	1,060	$	(1	)	$	-	$	-		$	1,060	$	(1	)
Mortgage-backed securities ⁽²⁾		3,769		(16	)		4,738		(87	)		8,507		(103	)
Other mortgage-backed securities ⁽³⁾		-		-			1,387		(12	)		1,387		(12	)
Total	$	4,829	$	(17	)	$	6,125	$	(99	)	$	10,954	$	(116	)

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

March 31, 2015
Real estate mortgage investment conduits ⁽⁴⁾	$	1,323	$	(1	)	$	-	$	-		$	1,323	$	(1	)
Mortgage-backed securities ⁽²⁾		-		-			5,098		(60	)		5,098		(60	)
Other mortgage-backed securities ⁽³⁾		-		-			1,417		(12	)		1,417		(12	)
Total	$	1,323	$	(1	)	$	6,515	$	(72	)	$	7,838	$	(73	)

⁽¹⁾ Comprised of a GNMA issued securities.

⁽²⁾ Comprised of FHLMC and FNMA issued securities.

⁽³⁾ Comprised of SBA issued securities.

⁽⁴⁾ Comprised of a FHLMC security.

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 other than temporarily 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. Mortgage-backed securities available for sale with an amortized cost of $5.7 million and $1.3 million and a fair value of $5.7 million and $1.3 million at September 30, 2015 and March 31, 2015, respectively, were pledged as collateral for government public funds held by the Bank.