XML 25 R12.htm IDEA: XBRL DOCUMENT v3.20.2
Investment Securities
 12 Months Ended
Mar. 31, 2020
Investments, Debt and Equity Securities [Abstract]  
Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure 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. GAAP requires that securities be classified into three categories: trading, held-to-maturity, and available-for-sale. At March 31, 2020, securities with fair value of $65.8 million, or 86.6%, of the Bank’s total securities were classified as available-for-sale, and the remaining securities with amortized cost of $10.2 million, or 13.4%, were classified as held-to-maturity. The Bank had no securities classified as trading at March 31, 2020 and March 31, 2019.

Equity securities primarily consist of the Bank's investment in a limited partnership Community Capital Fund. As a result of the adoption of ASU 2016-01 in April 2018, the Company determined that these investments fall under the provisions of ASU 2016-01, and accordingly, were transferred from available-for-sale and reclassified into equity securities on the Statement of Financial Condition. These securities are measured at fair value with unrealized holding gains and losses reflected in net income. Effective April 1, 2018, the Company recorded a cumulative effect adjustment of $721 thousand as a reclassification from accumulated other comprehensive loss to retained earnings. Additionally, all subsequent changes in fair value have been recognized in the Statements of Operations. Other investments totaled $874 thousand at March 31, 2020 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 March 31, 2020 and March 31, 2019:
At March 31, 2020
AmortizedGross Unrealized
$ in thousandsCostGainsLossesFair Value
Available-for-Sale:
Mortgage-backed securities:
Government National Mortgage Association$3,510  $77  $—  $3,587  
Federal Home Loan Mortgage Corporation9,244  312  18  9,538  
Federal National Mortgage Association21,495  673  —  22,168  
Total mortgage-backed securities34,249  1,062  18  35,293  
U.S. Government Agency Securities26,616  20  155  26,481  
Corporate Bonds4,032  33  10  4,055  
Total available-for-sale$64,897  $1,115  $183  $65,829  
Held-to-Maturity:
Mortgage-backed securities:
Government National Mortgage Association$972  $76  $—  $1,048  
Federal National Mortgage Association8,179  342  —  8,521  
Total held-to-maturity mortgage-backed securities9,151  418  —  9,569  
Corporate Bonds1,000  —  5  995  
Total held-to-maturity$10,151  $418  $5  $10,564  
At March 31, 2019
AmortizedGross Unrealized
$ in thousandsCostGainsLossesFair Value
Available-for-Sale:
Mortgage-backed securities:
  Government National Mortgage Association$4,443  $25  $86  $4,382  
  Federal Home Loan Mortgage Corporation11,104  69  148  11,025  
  Federal National Mortgage Association27,094  131  617  26,608  
    Total mortgage-backed securities42,641  225  851  42,015  
U.S. Government Agency Securities33,089  —  236  32,853  
Corporate Bonds5,054  —  77  4,977  
    Total available-for-sale$80,784  $225  $1,164  $79,845  
Held-to-Maturity:
Mortgage-backed securities:
  Government National Mortgage Association$1,214  $40  $—  $1,254  
  Federal National Mortgage Association and Other8,923  —  87  8,836  
    Total held-to-maturity mortgage-backed securities10,137  40  87  10,090  
Corporate Bonds1,000  17  —  1,017  
Total held-to-maturity$11,137  $57  $87  $11,107  

        There were no sales of available-for-sale securities and held-to-maturity securities for the year ended March 31, 2020. 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 year ended March 31, 2019.
$ in thousands2019
Proceeds$20,487  
Gross gains12  
Gross losses28  

Carver maintains a portfolio of mortgage-backed securities in the form of Government National Mortgage Association (“GNMA”) pass-through certificates, Federal National Mortgage Association (“FNMA”) mortgage-backed securities and Federal Home Loan Mortgage Corporation (“FHLMC”) participation certificates. GNMA pass-through certificates are guaranteed as to the payment of principal and interest by the full faith and credit of the United States Government, while FNMA and FHLMC securities are each guaranteed by their respective agencies as to principal and interest. Based on the high quality of the Bank's investment portfolio, current market conditions have not significantly impacted the pricing of the portfolio or the Bank's ability to obtain reliable prices.

At March 31, 2020, the Bank pledged mortgage-backed and agency securities of $21.0 million as collateral for advances from the FHLB-NY.

The following tables set forth the unrealized losses and fair value of securities in an unrealized loss position at March 31, 2020 and March 31, 2019 for less than 12 months and 12 months or longer:
At March 31, 2020
Less than 12 months12 months or longerTotal
$ in thousandsUnrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value
Available-for-Sale:
Mortgage-backed securities$—  $—  $18  $619  $18  $619  
U.S. Government Agency Securities—  —  155  21,494  155  21,494  
Corporate bonds10  1,999  —  —  10  1,999  
  Total available-for-sale securities$10  $1,999  $173  $22,113  $183  $24,112  
Held-to-Maturity:
Corporate bonds$5  $995  $—  $—  $5  $995  
Total held-to-maturity securities$5  $995  $—  $—  $5  $995  
At March 31, 2019
Less than 12 months12 months or longerTotal
$ in thousandsUnrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value		Unrealized
Losses		Fair
Value
Available-for-Sale:
Mortgage-backed securities$—  $—  $851  $26,787  $851  $26,787  
U.S. Government Agency Securities23  20,851  213  12,002  236  32,853  
Corporate bonds—  —  77  4,977  77  4,977  
  Total available-for-sale securities$23  $20,851  $1,141  $43,766  $1,164  $64,617  
Held-to-Maturity:
Mortgage-backed securities$—  $—  $87  $8,752  $87  $8,752  
Total held-to-maturity securities$—  $—  $87  $8,752  $87  $8,752  

A total of seven securities had an unrealized loss at March 31, 2020, compared to 35 at March 31, 2019. U.S. government agency securities and corporate bonds represented 89.1% and 8.3%, respectively, of total available-for-sale securities in an unrealized loss position at March 31, 2020. There were three U.S. government agency securities and one mortgage-backed security that had an unrealized loss position for more than 12 months at March 31, 2020. The cause of the temporary impairment is directly related to changes in interest rates. In general, as interest rates decline, the fair value of securities will rise, and conversely as interest rates rise, the fair value of securities will decline.  Management considers fluctuations in fair value as a result of interest rate changes to be temporary, which is consistent with the Bank's experience.  The impairments are deemed temporary based on the direct relationship of the change in fair value to movements in interest rates, the life of the investments and their high credit quality. Given the high credit quality of the securities which are backed by the U.S. government's guarantees, and the corporate securities which are all reputable institutions 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 has the ability and intent to hold the securities until maturity or the valuation recovers.

The Bank did not have any securities that were classified as having other-than-temporary impairment in its investment portfolio at March 31, 2020.

The following is a summary of the amortized cost and fair value of debt securities at March 31, 2020, 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 thousandsAmortized CostFair ValueWeighted
Average Yield
Available-for-Sale:
Less than one year$3,004  $2,998  1.61 %
One through five years4,632  4,670  2.24 %
Five through ten years7,226  7,175  2.64 %
After ten years15,786  15,693  2.41 %
Mortgage-backed securities34,249  35,293  2.38 %
$64,897  $65,829  2.37 %
Held-to-maturity:
One through five years$—  $—  — %
Five through ten years1,000  995  5.75 %
After ten years—  —  — %
Mortgage-backed securities9,151  9,569  2.49 %
$10,151  $10,564  2.81 %