Investment Securities

3 Months Ended

Jun. 30, 2024

Investments, Debt and Equity Securities [Abstract]

INVESTMENT SECURITIES

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. Debt securities are classified into three categories: trading, held-to-maturity, and available-for-sale. At June 30, 2024, securities with fair value of $46.9 million, or 96.0%, of the Bank’s total securities were classified as available-for-sale, and securities with amortized cost of $1.9 million, or 4.0%, were classified as held-to-maturity, compared to $48.0 million and $2.0 million at March 31, 2024, respectively. The Bank had no securities classified as trading at June 30, 2024 and March 31, 2024.

Other investments as of June 30, 2024 primarily consists of the Company and Bank's investments in limited partnership Community Capital Funds and a $5.3 million bank-owned life insurance policy ("BOLI") that was purchased during the first quarter of fiscal year 2023 as a channel to add to the Company's non-interest income revenue by means of an investment considered safe and sound by the Company's regulators. The investments in the limited partnerships are measured using the equity method. The BOLI is carried at the cash surrender value of the underlying policies. Income generated from the investments and the increase in the cash surrender value of the BOLI is included in other non-interest income on the Statements of Operations. Other investments totaled $6.9 million at June 30, 2024 and are included in Other Assets on the Statements of Financial Condition.

The following tables set forth the amortized cost and fair value of securities available-for-sale and held-to-maturity at June 30, 2024 and March 31, 2024:


	At June 30, 2024
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed Securities:
Government National Mortgage Association	$	243	$	3	$	—	$	246
Federal Home Loan Mortgage Corporation	19,905		—		(4,512)		15,393
Federal National Mortgage Association	10,796		—		(2,346)		8,450
Total mortgage-backed securities	30,944		3		(6,858)		24,089
U.S. Government Agency Securities	6,014		3		(10)		6,007

Corporate Bonds	5,265		—		(2,345)		2,920
Muni Securities	17,690		—		(3,761)		13,929

Total available-for-sale	$	59,913	$	6	$	(12,974)	$	46,945

Held-to-Maturity:
Mortgage-backed Securities:
Government National Mortgage Association	$	274	$	—	$	(11)	$	263
Federal National Mortgage Association and Other	1,666		—		(90)		1,576


Total held-to maturity	$	1,940	$	—	$	(101)	$	1,839


	At March 31, 2024
	Amortized		Gross Unrealized
$ in thousands	Cost		Gains		Losses		Fair Value
Available-for-Sale:
Mortgage-backed Securities:
Government National Mortgage Association	$	280	$	4	$	(1)	$	283
Federal Home Loan Mortgage Corporation	20,299		—		(4,501)		15,798
Federal National Mortgage Association	10,975		—		(2,339)		8,636

Total mortgage-backed securities	31,554		4		(6,841)		24,717
U.S. Government Agency Securities	6,219		—		(25)		6,194
Corporate Bonds	5,266		—		(2,203)		3,063
Muni Securities	17,696		—		(3,640)		14,056


Total available-for-sale	$	60,735	$	4	$	(12,709)	$	48,030

Held-to-Maturity:
Mortgage-backed Securities:
Government National Mortgage Association	$	292	$	—	$	(9)	$	283
Federal National Mortgage Association and Other	1,716		—		(94)		1,622


Total held-to-maturity	$	2,008	$	—	$	(103)	$	1,905

There were no sales of available-for-sale and held-to-maturity securities for the three months ended June 30, 2024 and June 30, 2023.

The following tables set forth the unrealized losses and fair value of securities in an unrealized loss position at June 30, 2024 and March 31, 2024 for less than 12 months and 12 months or longer:


	At June 30, 2024
	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	$	—	$	—	$	(6,858)	$	23,856	$	(6,858)	$	23,856
U.S. Government Agency securities	—		—		(10)		4,740		(10)		4,740

Corporate bonds	—		—		(2,345)		2,920		(2,345)		2,920

Muni securities	—		—		(3,761)		13,929		(3,761)		13,929

Total available-for-sale securities	$	—	$	—	$	(12,974)	$	45,445	$	(12,974)	$	45,445
Held-to-Maturity:
Mortgage-backed securities	$	—	$	—	$	(101)	$	1,806	$	(101)	$	1,806

Total held-to-maturity securities	$	—	$	—	$	(101)	$	1,806	$	(101)	$	1,806


	At March 31, 2024
	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	$	—	$	—	$	(6,841)	$	24,468	$	(6,841)	$	24,468
U.S. Government Agency securities	(2)		1,273		(23)		4,921		(25)		6,194
Corporate bonds	—		—		(2,203)		3,063		(2,203)		3,063
Muni securities	—		—		(3,640)		14,056		(3,640)		14,056


Total available-for-sale securities	$	(2)	$	1,273	$	(12,707)	$	46,508	$	(12,709)	$	47,781
Held-to-Maturity:
Mortgage-backed securities	$	—	$	—	$	(103)	$	1,872	$	(103)	$	1,872

Total held-to-maturity securities	$	—	$	—	$	(103)	$	1,872	$	(103)	$	1,872

Management reviews the investment portfolio on a quarterly basis to identify and evaluate each investment that has an unrealized holding loss. A total of 23 available-for-sale and held-to-maturity securities had an unrealized loss at June 30, 2024 compared to 24 at March 31, 2024. Mortgage-backed securities, U.S. government agency securities, municipal securities and a corporate bond security represented 52.5%, 10.4%, 30.7% and 6.4%, respectively, of total available-for-sale securities in an unrealized loss position at June 30, 2024. There were eight mortgage-backed securities, two U.S. government agency securities, one corporate bond and six municipal securities that had an unrealized loss position for more than 12 months at June 30, 2024. Management has evaluated available-for-sale securities that are in an unrealized loss position and determined that the declines in fair value are attributable to market volatility, and not credit quality or other factors. Given the high credit quality of the mortgage-backed securities, which are backed by explicit U.S. government guarantees, or guarantees by government sponsored enterprises that have credit ratings and perceived credit risk comparable to the U.S. government, the high credit quality and strong financial performance of the U.S. government agency and the results of the individual analyses performed for and continuous surveillance on the municipal securities, as well as the corporate security that is a reputable institution in good financial standing, the risk of credit loss is minimal. Management believes that these unrealized losses are a direct result of the current rate environment and the Company has the ability and intent to hold the securities until maturity or the valuations recover. The Bank's held-to-maturity portfolio consists of six mortgage-backed securities that were in an unrealized loss position for more than 12 months at June 30, 2024. These securities are either fully guaranteed or issued by a government sponsored enterprise, which has a credit rating and perceived credit risk comparable to the U.S. government. As such, no allowance for credit losses on securities available-for-sale or held-to-maturity have been established as of June 30, 2024.

The following is a summary of the amortized cost and fair value of debt securities at June 30, 2024, 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	$	1,678	$	1,669	6.58	%
Five through ten years	4,680		3,984		2.44	%
After ten years	22,611		17,203		3.39	%
Mortgage-backed securities	30,944		24,089		1.63	%
Total	$	59,913	$	46,945	2.52	%
Held-to-maturity:



Mortgage-backed securities	$	1,940	$	1,839	2.82	%