INVESTMENT SECURITIES

The Bank utilizes mortgage-backed and other investment securities in its asset/liability management strategy. In making investment decisions, the Bank considers, among other things, its yield and interest rate objectives, its interest rate and credit risk position, and its liquidity and cash flow.

Generally, the investment policy of the Bank is to invest funds among categories of investments and maturities based upon the Bank’s asset/liability management policies, investment quality, loan and deposit volume and collateral requirements, liquidity needs and performance objectives. ASC Subtopic 320-10-25 requires that securities be classified into three categories: trading, held-to-maturity, and available-for-sale. At September 30, 2016, $53.8 million, or 78.8%, of the Bank’s total securities were classified as available-for-sale, and the remaining $14.5 million, or 21.2%, were classified as held-to-maturity. The Bank had no securities classified as trading at September 30, 2016 and March 31, 2016.

The following table sets forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at September 30, 2016:



	Amortized		Gross Unrealized				Estimated
$ in thousands	Cost		Gains		Losses		Fair-Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	3,344	$	—	$	15	$	3,329
Federal Home Loan Mortgage Corporation	6,782		13		43		6,752
Federal National Mortgage Association	22,520		28		56		22,492
Other	45		—		—		45
Total mortgage-backed securities	32,691		41		114		32,618
U.S. Government Agency Securities	5,849		22		—		5,871
Corporate bonds	5,116		—		25		5,091
Other investments	10,360		—		190		10,170
Total available-for-sale	$	54,016	$	63	$	329	$	53,750
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	2,068	$	153	$	—	$	2,221
Federal National Mortgage Association and Other	11,390		254		—		11,644
Total held-to-maturity mortgage-backed securities	13,458		407		—		13,865
Corporate Bonds	1,000		25		—		1,025
Total held-to maturity	14,458		432		—		14,890
Total securities	$	68,474	$	495	$	329	$	68,640

^* The carrying amount and amortized cost are the same for all held-to-maturity securities, as no OTTI has been recorded.

The following table sets forth the amortized cost and estimated fair value of securities available-for-sale and held-to-maturity at March 31, 2016:



	Amortized		Gross Unrealized				Estimated
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association	$	4,578	$	45	$	—	$	4,623
Federal Home Loan Mortgage Corporation	7,778		—		100		7,678
Federal National Mortgage Association	7,860		—		36		7,824
Other	45		—		—		45
Total mortgage-backed securities	20,261		45		136		20,170
U.S. Government Agency Securities	26,077		27		35		26,069
Other investments	10,148		—		207		9,941
Total available-for-sale	$	56,486	$	72	$	378	$	56,180
Held-to-Maturity^*:
Mortgage-backed securities:
Government National Mortgage Association	$	2,379	$	150	$	—	$	2,529
Federal National Mortgage Association and Other	11,932		192		—		12,124
Total held-to-maturity mortgage-backed securities	14,311		342		—		14,653
Corporate Bonds	1,000		—		—		1,000
Total held-to-maturity	15,311		342		—		15,653
Total securities	$	71,797	$	414	$	378	$	71,833

^* The carrying amount and amortized cost are the same for all held-to-maturity securities, as no OTTI has been recorded.

The following is a summary regarding proceeds, gross gains and gross losses realized from the sale of securities from the available-for-sale portfolio for the three and six months ended September 30, 2016 and 2015:



	For the Three Months Ended September 30,				For the Six Months Ended September 30,
$ in thousands	2016		2015		2016		2015
Proceeds	$	7,259	$	4,951	$	7,259	$	4,951
Gross Gains	58		2		58		2
Gross Losses	—		1		—		1

The following table sets forth the unrealized losses and fair value of securities in an unrealized loss position at September 30, 2016 for less than 12 months and 12 months or longer:



	Less than 12 months				12 months or longer				Total
$ in thousands	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities	$	71	$	8,080	$	43	$	2,181	$	114	$	10,261
U.S. Government Agency Securities	—		1,999		—		—		—		1,999
Corporate bonds	25		5,091		—		—		25		5,091
Other investments ⁽¹⁾	—		—		190		9,811		190		9,811
Total available-for-sale securities	$	96	$	15,170	$	233	$	11,992	$	329	$	27,162

⁽¹⁾ CRA fund comprised of over 95% agency securities.

The following table sets forth the unrealized losses and fair value of securities in an unrealized loss position at March 31, 2016 for less than 12 months and 12 months or longer:



	Less than 12 months				12 months or longer				Total
$ in thousands	Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value
Available-for-Sale:
Mortgage-backed securities	$	—	$	—	$	136	$	15,502	$	136	$	15,502
U.S. Government Agency Securities	3		2,996		32		11,242		35		14,238
Other investments ⁽¹⁾	—		—		207		9,793		207		9,793
Total available-for-sale securities	$	3	$	2,996	$	375	$	36,537	$	378	$	39,533

⁽¹⁾ CRA fund comprised of over 95% agency securities.

A total of 12 securities had an unrealized loss at September 30, 2016 compared to 13 at March 31, 2016. There was one mortgage-backed security and one investment in a CRA fund that had an unrealized loss position for more than 12 months at September 30, 2016. Given the high credit quality of the securities which are backed by the U.S. government's guarantees, the risk of credit loss is minimal. Management believes that these unrealized losses are a direct result of the current rate environment and has the ability and intent to hold the securities until maturity or the valuation recovers.

The amount of an other-than-temporary impairment when there are credit and non-credit losses on a debt security which management does not intend to sell, and for which it is more likely than not that the Company will not be required to sell the security prior to the recovery of the non-credit impairment, the portion of the total impairment that is attributable to the credit loss would be recognized in earnings. The remaining difference between the debt security’s amortized cost basis and its fair value would be included in other comprehensive income (loss). At September 30, 2016, the Bank does not have any securities that are classified as having other-than-temporary impairment in its investment portfolio.

The following is a summary of the carrying value (amortized cost) and fair value of securities at September 30, 2016, by remaining period to contractual maturity (ignoring earlier call dates, if any). Actual maturities may differ from contractual maturities because certain security issuers have the right to call or prepay their obligations. The table below does not consider the effects of possible prepayments or unscheduled repayments.



$ in thousands	Amortized Cost		Fair Value		Weighted Average Yield
Available-for-Sale:
One through five years	$	10,608	$	10,595	1.71	%
Five through ten years	12,655		12,651		1.91	%
After ten years	30,753		30,504		1.12	%
Total	$	54,016	$	53,750	1.43	%

Held-to-maturity:
Five through ten years	$	6,705	$	6,934	3.00	%
After ten years	7,753		7,956		2.39	%
Total	$	14,458	$	14,890	2.67	%