3. Cash Equivalents and Marketable Securities

We consider all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. We classify marketable securities having original maturities of one year or less, but more than three months, as short-term investments and marketable securities with maturities of more than one year as long-term investments. We further classify marketable securities as either held-to-maturity or available-for-sale. We classify marketable securities as held-to-maturity when we believe we have the ability and intent to hold such securities to their scheduled maturity dates. All other marketable securities are classified as available-for-sale. We have not designated any of our marketable securities as trading securities.

We carry held-to-maturity marketable securities at their amortized cost and available-for-sale marketable securities at their fair value and report any unrealized appreciation or depreciation in the fair value of available-for-sale marketable securities in accumulated other comprehensive net loss. We monitor our investment portfolio for any decline in fair value that is other-than-temporary and record any such impairment as an impairment loss. We recorded no impairment losses for other-than-temporary declines in the fair value of marketable securities for the three months ended June 30, 2012 and 2011.

Cash and cash equivalents include highly liquid money market funds of $2.7 million and $3.3 million as of June 30, 2012 and March 31, 2012, respectively. Money market funds present negligible risk of changes in value due to changes in interest rates, and their cost approximates their fair market value.

Short-term and long-term investments include held-to-maturity certificates of deposit with maturities of one to fifteen months of $5.3 million as of June 30, 2012 and $8.6 million as of March 31, 2012. Due to the negligible risk of changes in value due to changes in interest rates and the short-term nature of these investments, their cost approximates their fair market value.

The amortized cost and fair value of our marketable securities classified as available-for-sale are summarized as follows:

	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
June 30, 2012
Short-term investments:
U.S. Government and Agency debt securities	$	3,019,000	$	-	$	1,000	$	3,018,000
Bank holding company debt securities		2,216,000		-		1,000		2,215,000
Long-term investments:
U.S. Government and Agency debt securities		1,006,000		-		-		1,006,000

Total	$	6,241,000	$	-	$	2,000	$	6,239,000

March 31, 2012
Short-term investments:
U.S. Government and Agency debt securities	$	1,001,000	$	-	$	-	$	1,001,000
Long-term investments:
U.S. Government and Agency debt securities		2,030,000		-		1,000		2,029,000

Total	$	3,031,000	$	-	$	1,000	$	3,030,000

All our available-for-sale marketable securities mature within two years from the date of purchase.