Note 6 - Investments

3 Months Ended

Sep. 30, 2014

NOTE 6 – INVESTMENTS:

Investments are carried at cost and consist of the following:

	September 30, 2014				June 30, 2014
	Carrying Cost		Fair Value		Carrying Cost		Fair Value
	(in thousands)
Federal Reserve Bank Stock	$	1,955	$	1,955	$	1,955	$	1,955
Federal Home Loan Bank Stock		475		475		475		475
Mortgage-backed investment		121		136		122		137
	$	2,551	$	2,566	$	2,552	$	2,567

The investment in Federal Home Loan Bank of San Francisco (“FHLB”) stock is a required investment related to CalFirst Bank’s borrowing arrangements with the FHLB. The FHLB obtains its funding primarily through issuance of consolidated obligations of the Federal Home Loan Bank system. The U.S. Government does not guarantee these obligations, and each of the twelve FHLB’s are generally jointly and severally liable for repayment of each other’s debt. Therefore, the Company’s investment could be adversely impacted by the financial operations of the FHLB and actions by the Federal Housing Finance Agency. These investments have no stated maturity.

The mortgage-backed investment consists of an Agency issued security. The Company has determined that it has the ability to hold this investment until maturity and, given the Company’s intent to do so, anticipates that it will realize the full carrying value of its investment and carries the security at amortized cost.