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Mortgage-backed Securities

6 Months Ended

Sep. 30, 2013

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, 2013
FHLMC mortgage-backed securities ⁽¹⁾	$	29	$	2	$	-	$	31
FNMA mortgage-backed securities ⁽²⁾		79		-		-		79
Total	$	108	$	2	$	-	$	110
March 31, 2013
FHLMC mortgage-backed securities	$	31	$	3	$	-	$	34
FNMA mortgage-backed securities		94		1		-		95
Total	$	125	$	4	$	-	$	129

⁽¹⁾ Federal Home Loan Mortgage Corporation (FHLMC)
⁽²⁾ Federal National Mortgage Association (FNMA)

The contractual maturities of mortgage-backed securities classified as held to maturity at September 30, 2013 are as follows (in thousands):

September 30, 2013		Amortized Cost		Estimated Fair Value

Due in one year or less	$	1	$	1
Due after one year through five years		-		-
Due after five years through ten years		12		12
Due after ten years		95		97
Total	$	108	$	110

Mortgage-backed securities held to maturity with an amortized cost of $39,000 and $53,000 and a fair value of $40,000 and $55,000 at September 30, 2013 and March 31, 2013, 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):

September 30, 2013		Amortized Cost		Gross Unrealized Gains			Gross Unrealized Losses			Estimated Fair Value

Real estate mortgage investment conduits	$	191	$	4		$	-		$	195
FHLMC mortgage-backed securities		4,576		18	7		(85	)		4,509
FNMA mortgage-backed securities		10,945		47			(233	)		10,759
SBA mortgage-backed securities ⁽¹⁾		2,220		23			-			2,243
Total	$	17,932	$	92		$	(318	)	$	17,706
March 31, 2013
Real estate mortgage investment conduits	$	230	$	7		$	-		$	237
FHLMC mortgage-backed securities		183		8			-			191
FNMA mortgage-backed securities		3		-			-			3
Total	$	416	$	15		$	-		$	431

⁽¹⁾ Small Business Administration (SBA)

The contractual maturities of mortgage-backed securities available for sale at September 30, 2013 are as follows (in thousands):

September 30, 2013		Amortized Cost		Estimated Fair Value

Due in one year or less	$	55	$	58
Due after one year through five years		39		41
Due after five years through ten years		7,134		7,184
Due after ten years		10,704		10,423
Total	$	17,932	$	17,706

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

	Less than 12 months					12 months or longer				Total
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
September 30, 2013

FHLMC mortgage-backed securities	$	1,877	$	(85	)	$	-	$	-	$	1,877	$	(85	)
FNMA mortgage-backed securities		3,729		(233	)		-		-		3,729		(233	)
Total	$	5,606	$	(318	)	$	-	$	-	$	5,606	$	(318	)

There were no mortgage-backed securities that were temporarily impaired at March 31, 2013.

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 approaches 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 will differ from contractual maturities because borrowers may have the right to prepay obligations with or without prepayment penalties.

Mortgage-backed securities available for sale with an amortized cost of $246,000 and $416,000 and a fair value of $254,000 and $431,000 at September 30, 2013 and March 31, 2013, respectively, were pledged as collateral for government public funds held by the Bank. The real estate mortgage investment conduits consist of FHLMC and FNMA securities.