Note 3 - Securities Available for Sale

Securities available-for-sale include U.S. Treasury securities, corporate and municipal bonds, U.S. government agency (“Agency”) mortgaged-backed securities (“MBS”), mutual fund and equity investments. The amortized cost, fair value, and carrying value of available-for-sale-securities were as follows:

	at June 30, 2016
(in thousands)	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
U.S. Treasury notes	$	47,355	$	1,419	$	-		$	48,774
Corporate debt securities		13,291		97		(3	)		13,385
Agency MBS		31,782		441		-			32,223
Mutual fund investments		1,215		247		-			1,462
Total securities available-for-sale	$	93,643	$	2,204	$	(3	)	$	95,844

	at June 30, 2015
(in thousands)	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
U.S. Treasury notes	$	47,286	$	484	$	-		$	47,770
Corporate debt securities		13,165		18		(31	)		13,152
Agency MBS		18,765		53		(149	)		18,669
Securities of state and political subdivisions		406		6		-			412
Mutual fund investments		1,215		-		(6	)		1,209
Total securities available-for-sale	$	80,837	$	561	$	(186	)	$	81,212

The following table presents the fair value and associated gross unrealized loss on available-for-sale securities with a gross unrealized loss at June 30, 2016 and 2015.

	Less than 12 Months					12 Months or More				Total
	Unrealized			Estimated		Unrealized		Estimated		Unrealized			Estimated
	Loss			Fair Value		Loss		Fair Value		Loss			Fair Value
	(in thousands)
At June 30, 2016
Corporate debt securities	$	(3	)	$	3,266	$	-	$	-	$	(3	)	$	3,266
Total	$	(3	)	$	3,266	$	-	$	-	$	(3	)	$	3,266

At June 30, 2015
Corporate debt securities	$	(31	)	$	8,388	$	-	$	-	$	(31	)	$	8,388
Agency MBS		(149	)		14,170		-		-		(149	)		14,170
Mutual fund investments		(6	)		1,209		-		-		(6	)		1,209
Total	$	(186	)	$	23,767	$	-	$	-	$	(186	)	$	23,767

The Company conducts a regular assessment of its investment portfolios to determine whether any securities are other-than-temporarily impaired. In estimating other-than-temporary impairment losses, management considers, among other factors, length of time and extent to which the fair value has been less than cost, the financial condition and near term prospects of the issuer, and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any recovery. The $3,000 unrealized loss at June 30, 2016 relates to fluctuations in interest rates and financial markets and not credit quality. Because the Company has the intent to hold this security and more likely than not will not need to sell it, the Company does not consider this investment to be other-than-temporarily impaired at June 30, 2016.

The $186,000 in unrealized losses at June 30, 2015 related to fluctuations in interest rates and financial markets and not credit quality. Because the Company has the intent to hold these securities and more likely than not will not need to sell them, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2015. In September 2014, the Company recorded a pre-tax impairment charge of $91,000 related to the mutual fund investment. While the Company had the ability and intent to retain this investment, given that the fund lowered its dividend by 11% in May 2014 and had traded below its recorded cost for over twelve months, the Company determined that an other than temporary impairment had occurred.

The amortized cost and estimated fair value of available-for-sale securities at June 30, 2016, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized Cost		Fair Value
	(in thousands)
Due in three months or less	$	-	$	-
Due after three months to one year		-		-
Due after one year to five years		60,646		62,159
Due after five years		31,782		32,223
No stated maturity		1,215		1,462
Total securities available-for-sale	$	93,643	$	95,844

The following table presents the Company’s gross realized gains and gross realized losses on available-for-sale securities. These gains and losses were recognized using the specific identification method and were included in non-interest income.

(in thousands)	Available-for-sale
	For the years ended June 30,
	2016		2015			2014
Gross realized gains	$	23	$	572		$	-
Gross realized losses		-		-			-
Other than temporary impairment		-		(91	)		-
Total	$	23	$	481		$	-

During the twelve months ended June 30, 2016, the Company realized a gain of $23,000 from an early call of a corporate debt security for proceeds of $4.8 million. The net gain is recognized using the specific identification method and is included in non-interest income. During the twelve months ended June 30, 2015, the Company realized a gain of $572,000 from the sale of equity investments for proceeds of $994,000. The net gain is recognized using the specific identification method and is included in non-interest income. In September 2014, the Company recorded a pre-tax impairment charge of $91,000 related to the mutual fund investment discussed above.

At June 30, 2016, U.S. Treasury notes and Agency MBS with an amortized cost of $79.1 million are pledged to secure borrowings from the FHLB (see Note 9). At June 30, 2015, U.S. Treasury notes and Agency MBS with an amortized cost of $66.1 million are pledged to secure borrowings from the FHLB.