Securities

12 Months Ended

Mar. 31, 2012

1. Securities

A summary of the amortized cost and estimated market values of securities is as follows:

*March 31, 2012*
		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Market
	Cost	Gains	Losses	Value

Held to Maturity

United States government and
agency obligations	$10,000,000	$17,430	$17,900	$9,999,530

Other	1,344,000	--	--	1,344,000
	11,344,000	17,430	17,900	11,343,530
Available for

Equity securities	38,647	--	--	38,647

	$11,382,647	$17,430	$17,900	$11,382,177

March 31, 2011


		Gross	Gross	Estimated
	Amortized	Unrealized	Unrealized	Market
	Cost	Gains	Losses	Value
Held to Maturity

United States government and
agency obligations	$2,000,000	--	$33,680	$1,966,320

Other	198,000	--	--	198,000
	2,198,000	--	33,680	2,164,320
Available for

Equity securities	38,647	--	--	38,647

	$2,236,647	--	$33,680	$2,202,967

The amortized cost and estimated market value of securities at March 31, 2012, by contractual maturity, are as follows:

		Estimated
	Amortized	Market
	Cost	Value
Held to Maturity

Due in one year or less	$348,000	$348,000
Due in one through five years	4,496,000	4,512,395
Over five years	6,500,000	6,483,135
	11,344,000	11,343,530

Available for

Equity securities	38,647	38,647

	$11,382,647	$11,382,177

Securities having a market value of $1,500,155 at March 31, 2011 were pledged by the Corporation for purposes required by law. No securities were pledged at March 31, 2012.

Information pertaining to securities with gross unrealized losses at March 31, 2012 and 2011, aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:

*March 31, 2012*
	Less Than Twelve Months		Over Twelve Months
	Gross	Estimated	Gross	Estimated
	Unrealized	Market	Unrealized	Market
	Losses	Value	Losses	Value
Held to Maturity

government and
agency obligations	$17,900	$5,982,100	$--	$--

March 31, 2011
	Less Than Twelve Months		Over Twelve Months
	Gross	Estimated	Gross	Estimated
	Unrealized	Market	Unrealized	Market
	Losses	Value	Losses	Value
Held to Maturity

government and
agency obligations	$33,680	$1,966,320	$--	$--

United States government and agency obligations. The unrealized loss on the six investments in direct obligations of government agencies was caused by interest rate increases. The contractual terms of these investments do not permit the issuer to settle at a price less than the amortized cost bases of the investment. Because the Corporation does not intend to sell the investment and it is not more likely than not that the Corporation will be required to sell the investment before recovery of the amortized cost basis, which may be maturity, the Corporation does not consider this investment to be other-than-temporarily impaired at March 31, 2012.

During the year ended March 31, 2009 due to the conservatorship of Fannie Mae and Freddie Mac in September 2008 and the related restrictions on its outstanding preferred stock (including the elimination of dividends), the Corporation recorded an other-than-temporary impairment (OTTI) charge with respect to the Fannie Mae and Freddie Mac preferred stock it owned of $11.5 million. The OTTI charge was based on the closing quoted stock market values on March 31, 2009. The Corporation used guidance in ASC 320, Investments – Debt and Equity Securities, to determine the OTTI. The Company sold its remaining 57,000 shares of Fannie Mae and Freddie Mac preferred stock during fiscal year 2011.

The Corporation's investment in FHLB stock totaled $5,206,300 at March 31, 2012. FHLB stock is generally viewed as a long-term investment and as a restricted security, which is carried at cost, because there is no market for the stock, other than the FHLBs or member institutions. Therefore, when evaluating FHLB stock for impairment, its value is based on the ultimate recoverability of the par value rather than by recognizing temporary declines in value. We do not consider this investment to be other-than-temporarily impaired at March 31, 2012 and no impairment has been recognized. FHLB stock is shown in restricted investments on the balance sheet and is not part of the AFS securities portfolio.

- Definition

Tabular disclosure of marketable securities. This may consist of investments in certain debt and equity securities, short-term investments and other assets.

+ References+ Details

COMMUNITY FINANCIAL CORP /VA/ 10-K