Restrictions on Cash and Due From Bank Accounts

12 Months Ended

Mar. 31, 2013

Restrictions on Cash and Due From Bank Accounts

Note 3 – Restrictions on Cash and Due From Bank Accounts

AnchorBank fsb (Bank) is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank based on a percentage of deposits. The average amount of required reserve balances for the years ended March 31, 2013 and 2012 was approximately $5.5 million and $18.2 million, respectively, although at March 31, 2013 the Bank met the required reserves with cash balances in the branch system.

The Bank is required to maintain an account with its official check service provider equal to one day’s average remittance. The balance in this restricted account was $4.5 million at March 31, 2013 and 2012.

Investment Directions Inc. (IDI), a subsidiary of the Corporation, has a security interest in an interest reserve escrow account in conjunction with a lending arrangement resulting from the sale in 2009 of its investment in a real estate development company. At March 31, 2013 and 2012, the interest reserve escrow was $174,000 and $228,000, respectively.

The nature of the Corporation’s business requires that it maintain amounts due from banks and federal funds sold which, at times, may exceed federally insured limits. Management monitors these correspondent relationships and has not experienced any losses in such accounts.