Note 8 - Fair Value of Financial Instruments

6 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Text Block]

(8)           Fair Value of Financial Instruments

ASC Topic 820-10 defines fair value, establishes a framework for measuring fair value in U.S. generally accepted accounting principles, and expands disclosure requirements for fair value measurements.  ASC Topic 820 does not require any new fair value measurements.  The adoption of ASC Topic 820-10 did not have a material impact on the consolidated financial statements.

ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as described below:

·	Level 1	Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities.
·	Level 2	Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly.  Level 2 inputs include quoted prices for similar assets, quoted prices in markets that are not considered to be active, and observable inputs other than quoted prices such as interest rates.
·	Level 3	Level 3 inputs are unobservable inputs.

Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands):

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
September 30, 2012
Available-for-sale securities	$	240		−		−
March 31, 2012
Available-for-sale securities	$	242		−		−

Assets and Liabilities on a Non-Recurring Basis

Assets and liabilities measured at fair value on a non-recurring basis at September 30, 2012 and March 31, 2012 are as follows (dollars in thousands):

	Fair Value Measurements at Reporting Date Using
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Other Unobservable Inputs (Level 3)
September 30, 2012
Impaired loans	$	─	$	7,089	$	─
Real estate owned	$	─	$	2,358	$	─
Total	$	─		9,447	$	─
March 31, 2012
Impaired loans	$	─	$	7,389	$	─
Real estate owned	$	─		846	$	─
Total	$	─	$	8,235	$	─

The fair value of impaired loans and real estate owned with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.

Off-balance sheet instruments

Off-balance sheet instruments are primarily comprised of loan commitments and unfunded lines of credit which are generally priced at market rate at the time of funding.  Therefore, these instruments have nominal value prior to funding.

A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input significant to the fair value measurement.

As required by ASC Topic 825-10-65, the estimated fair value of financial instruments at September 30, 2012 and March 31, 2012 was as follows:

	September 30, 2012				March 31, 2012
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
(Dollars in Thousands)
Financial Assets:
Cash and cash equivalents	$	6,790,161	$	6,790,161	$	6,649,685	$	6,649,685
Investment securities		21,679,762		22,025,701		17,694,594		17,848,574
Loans – net		92,694,794		97,077,000		99,431,618		103,700,000
FHLB stock		202,500		202,500		219,100		219,100
Accrued interest receivable		465,092		465,092		417,102		417,102
Real estate owned		2,357,738		2,357,738		845,669		845,669
Total financial assets	$	124,190,047	$	128,918,192	$	125,257,768	$	129,680,130
Financial Liabilities:
Deposits	$	120,017,653	$	121,208,000	$	121,588,891	$	122,204,000
Advance payments by borrowers for taxes and insurance		362,370		362,370		399,920		399,920
Accrued interest payable		11,467		11,467		15,912		15,912
Total financial liabilities	$	120,391,490	$	121,581,837	$	122,004,723	$	122,619,832

	September 30, 2012				March 31, 2012
	Contract Value		Estimated Fair Value		Contract Value		Estimated Fair Value
Off-balance sheet instruments
Commitments to extend credit	$	5,888,167	$	5,888,167	$	5,337,000	$	5,337,000