XML 22 R11.htm IDEA: XBRL DOCUMENT
v3.23.3

FAIR VALUE | 3 Months Ended
--- | ---
Sep. 30, 2023
Fair Value Disclosures [Abstract] |
FAIR VALUE | FAIR VALUE The following tables sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2023 and June 30, 2023. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement:
|  | September 30, 2023
(Dollars in thousands) |  |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
ASSETS: |  |  |  |  |  |  |
Securities—Trading |  |  | $ | 640 |  |  | $ | — |  |  | $ | 640 |
Securities—Available-for-sale: |  |  |  |  |  |  |
Agency MBS 1 |  |  | 27,624 |  |  | — |  |  | 27,624 |
Non-Agency MBS 2 |  |  | — |  |  | 206,076 |  |  | 206,076 |
Municipal |  |  | 3,026 |  |  | — |  |  | 3,026 |
Total—Securities—Available-for-sale |  |  | $ | 30,650 |  |  | $ | 206,076 |  |  | $ | 236,726 |
Loans held for sale |  |  | $ | 8,014 |  |  | $ | — |  |  | $ | 8,014 |
Servicing rights |  |  | $ | — |  |  | $ | 29,338 |  |  | $ | 29,338 |
Other assets—Derivative instruments |  |  | $ | 1,295 |  |  | $ | — |  |  | $ | 1,295 |
LIABILITIES: |  |  |  |  |  |  |
Accrued expense and other liabilities—Derivative instruments |  |  | $ | 934 |  |  | $ | — |  |  | $ | 934 |
|  | June 30, 2023
(Dollars in thousands) |  |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
ASSETS: |  |  |  |  |  |  |
Securities—Trading |  |  | $ | 758 |  |  | $ | — |  |  | $ | 758 |
Securities—Available-for-sale: |  |  |  |  |  |  |
Agency MBS 1 |  |  | 23,947 |  |  | — |  |  | 23,947 |
Non-Agency MBS 2 |  |  | — |  |  | 205,005 |  |  | 205,005 |
Municipal |  |  | 3,398 |  |  | — |  |  | 3,398 |
Total—Securities—Available-for-sale |  |  | $ | 27,345 |  |  | $ | 205,005 |  |  | $ | 232,350 |
Loans held for sale |  |  | $ | 23,203 |  |  | $ | — |  |  | $ | 23,203 |
Servicing rights |  |  | $ | — |  |  | $ | 25,443 |  |  | $ | 25,443 |
Other assets—Derivative instruments |  |  | $ | 919 |  |  | $ | — |  |  | $ | 919 |
LIABILITIES: |  |  |  |  |  |  |
Accrued expense and other liabilities—Derivative instruments |  |  | $ | 691 |  |  | $ | — |  |  | $ | 691 |
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac. 2 Private sponsors of securities collateralized primarily by first-lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option adjustable rate mortgages (“ARMs”). The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:
|  |  | For the Three Months Ended
|  |  | September 30, 2023
(Dollars in thousands) |  |  | Securities – Available-for-Sale: Non-Agency RMBS |  | Servicing Rights 1 |  |  |  |  |  | Total
Opening Balance |  |  | $ | 205,005 |  |  | $ | 25,443 |  |  |  |  |  |  | $ | 230,448 |
Total gains or losses for the period: |  |  |  |  |  |  |  |  |  |  |
Included in earnings—Mortgage banking and servicing rights income |  |  | — |  |  | 1,858 |  |  |  |  |  |  | 1,858 |
Included in other comprehensive income |  |  | 1,316 |  |  | — |  |  |  |  |  |  | 1,316 |
Purchases, retentions, issues, sales and settlements: |  |  |  |  |  |  |  |  |  |  |
Purchases/Retentions |  |  | — |  |  | 2,037 |  |  |  |  |  |  | 2,037 |
Settlements |  |  | (245) |  |  | — |  |  |  |  |  |  | (245) |
Closing balance |  |  | $ | 206,076 |  |  | $ | 29,338 |  |  |  |  |  |  | $ | 235,414 |
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period |  |  | $ | — |  |  | $ | 1,858 |  |  |  |  |  |  | $ | 1,858 |
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.2 million for the three months ended September 30, 2023 and an increase in servicing rights value resulting from market-driven changes in interest rates of $2.1 million for the three months ended September 30, 2023. Additions to servicing rights were related to purchases and servicing rights retained upon sale of loans held for sale.
|  |  | For the Three Months Ended |  |
|  |  | September 30, 2022
(Dollars in thousands) |  |  | Securities – Available-for-Sale: Non-Agency RMBS |  | Servicing Rights 1 |  | Derivative Instruments, net |  | Total |  |
Opening Balance |  |  | $ | 186,814 |  |  | $ | 25,213 |  |  | $ | 464 |  |  | $ | 212,491 |  |  |
Total gains or losses for the period: |  |  |  |  |  |  |  |  |  |  |
Included in earnings—Mortgage banking and servicing rights income |  |  | — |  |  | 953 |  |  | 71 |  |  | 1,024 |  |  |
Included in other comprehensive income |  |  | (2,473) |  |  | — |  |  | — |  |  | (2,473) |  |  |
Purchases, retentions, issues, sales and settlements: |  |  |  |  |  |  |  |  |  |  |
Purchases/Retentions |  |  | — |  |  | 207 |  |  | — |  |  | 207 |  |  |
Settlements |  |  | (329) |  |  | — |  |  | — |  |  | (329) |  |  |
Closing balance |  |  | $ | 184,012 |  |  | $ | 26,373 |  |  | $ | 535 |  |  | $ | 210,920 |  |  |
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period |  |  | $ | — |  |  | $ | 953 |  |  | $ | 71 |  |  | $ | 1,024 |  |  |
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.4 million for the three months ended September 30, 2022 and an increase in servicing rights value resulting from market-driven changes in interest rates of $1.4 million for the three months ended September 30, 2022. Additions to servicing rights were retained upon sale of loans held for sale. The table below summarizes the quantitative information about Level 3 fair value measurements as of the dates indicated:
| September 30, 2023
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)
Securities – Non-agency MBS | $ | 206,076 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over SOFR Swaps | 0.0 to 58.1% (34.9%) 0.0 to 7.6% (2.4%) 0.0 to 68.7% (28.5%) 2.6 to 6.5% (2.6%)
Servicing Rights | $ | 29,338 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 4.8 to 39.9% (13.0%) 1.7 to 15.8 (7.4) 9.5 to 11.5% (9.8%)
| June 30, 2023
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average)
Securities – Non-agency MBS | $ | 205,005 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR | 0.0 to 59.7% (32.0%) 0.0 to 7.5% (2.4%) 0.0 to 68.7% (28.5%) 2.6 to 7.5% (2.7%)
Servicing Rights | $ | 25,443 |  | Discounted Cash Flow | Projected Constant Prepayment Rate, Life (in years), Discount Rate | 6.1 to 40.1% (12.6%) 1.8 to 10.9 (7.7) 9.5 to 11.5% (9.6%)
For mortgage-backed securities, significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the projected loss severity and a directionally opposite change in the assumption used for projected prepayment rates. For servicing rights, significant increases in projected prepayment rates or discount rates in isolation would result in a significantly lower fair value measurement, while a significant increase in expected life in isolation would result in a significantly higher fair value measurement. Generally, a change in the projected prepayment rates is accompanied by a directionally opposite change in expected life. The aggregate fair value of loans held for sale, carried at fair value, contractual balance (including accrued interest), and unrealized gain were:
(Dollars in thousands) | September 30, 2023 |  | June 30, 2023
Aggregate fair value | $ | 8,014 |  |  | $ | 23,203 |
Contractual balance | 7,878 |  |  | 22,844 |
Unrealized gain | $ | 136 |  |  | $ | 359 |
The total interest income and amount of gains and losses from changes in fair value included in earnings for loans held for sale were:
| For the Three Months Ended |  |
| September 30, |  |
(Dollars in thousands) | 2023 |  | 2022 |  |  |  |
Interest income | $ | 189 |  |  | $ | 50 |  |  |  |  |
Change in fair value | (129) |  |  | 91 |  |  |  |  |
Total | $ | 60 |  |  | $ | 141 |  |  |  |  |
The table below summarizes assets measured for impairment on a non-recurring basis:
| September 30, 2023
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance
Other real estate owned and repossessed vehicles: |  |  |  |  |  |  |
Single family real estate | $ | — |  |  | $ | — |  |  | $ | 5,574 |  |  | $ | 5,574 |
Multifamily real estate | — |  |  | — |  |  | 1,392 |  |  | 1,392 |
Autos | $ | — |  |  | $ | — |  |  | $ | 1,813 |  |  | $ | 1,813 |
Total | $ | — |  |  | $ | — |  |  | $ | 8,779 |  |  | $ | 8,779 |
| June 30, 2023
(Dollars in thousands) | Quoted Prices in Active Markets for Identical Assets (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Balance
Other real estate owned and repossessed vehicles: |  |  |  |  |  |  |
Single family real estate | $ | — |  |  | $ | — |  |  | $ | 5,574 |  |  | $ | 5,574 |
Multifamily real estate | — |  |  | — |  |  | 1,392 |  |  | 1,392 |
Autos | — |  |  | — |  |  | 1,133 |  |  | 1,133 |
Total | $ | — |  |  | $ | — |  |  | $ | 8,099 |  |  | $ | 8,099 |
Other real estate owned and foreclosed assets, which are measured at the lower of carrying value or fair value less costs to sell, had a net carrying amount of $8.8 million at September 30, 2023, after write-downs of $0.4 million, and a net carrying amount of $8.1 million at June 30, 2023, after write-downs of $1.7 million. The following table presents quantitative information about Level 3 fair value measurements for other real estate owned and repossessed vehicles measured at fair value on a non-recurring basis at the periods indicated:
| September 30, 2023
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) 1
Other real estate owned and repossessed vehicles 2: |  |  |  |
Single family real estate | $ | 5,574 |  | Sales comparison approach | Differences between the comparable sales | 62.1 to 93.6% (62.1%)
Multifamily real estate | $ | 1,392 |  | Sales comparison approach and income approach | Differences between the comparable sales and differences in net operating income expectations, capitalization rate | 49.8% to 54.5% (49.8%)
| June 30, 2023
(Dollars in thousands) | Fair Value | Valuation Technique | Unobservable Input | Range (Weighted Average) 1
Other real estate owned and repossessed vehicles 2: |  |  |  |
Single family real estate | $ | 5,574 |  | Sales comparison approach | Differences between the comparable sales | 62.1 to 93.6% (62.1%)
Multifamily real estate | $ | 1,392 |  | Sales comparison approach and income approach | Differences between the comparable sales and differences in net operating income expectations, capitalization rate | 49.8 to 54.5%% (49.8%)
1 For other real estate owned and repossessed vehicles the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the asset being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted. 2 Repossessed vehicles are valued using third-party pricing information of comparable vehicle sales without adjustment. Fair Value of Financial Instruments Carrying amounts and estimated fair values of financial instruments at September 30, 2023 and June 30, 2023 were:
| September 30, 2023
|  |  | Fair Value |  |
(Dollars in thousands) | Carrying Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,413,769 |  |  | $ | 2,413,769 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,413,769 |
Securities—trading | 640 |  |  | — |  |  | 640 |  |  | — |  |  | 640 |
Securities—available-for-sale | 236,726 |  |  | — |  |  | 30,650 |  |  | 206,076 |  |  | 236,726 |
Stock of regulatory agencies | 21,533 |  |  | — |  |  | 21,533 |  |  | — |  |  | 21,533 |
Loans held for sale, at fair value | 8,014 |  |  | — |  |  | 8,014 |  |  | — |  |  | 8,014 |
Loans held for investment—net | 16,955,041 |  |  | — |  |  | — |  |  | 16,935,835 |  |  | 16,935,835 |
Securities borrowed | 96,424 |  |  | — |  |  | — |  |  | 102,084 |  |  | 102,084 |
Customer, broker-dealer and clearing receivables | 285,423 |  |  | — |  |  | — |  |  | 294,499 |  |  | 294,499 |
Servicing rights | 29,338 |  |  | — |  |  | — |  |  | 29,338 |  |  | 29,338 |
Other assets - derivative instruments | 1,295 |  |  | — |  |  | 1,295 |  |  | — |  |  | 1,295 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Total deposits | 17,565,741 |  |  | — |  |  | 17,481,019 |  |  | — |  |  | 17,481,019 |
Advances from the Federal Home Loan Bank | 90,000 |  |  | — |  |  | 82,234 |  |  | — |  |  | 82,234 |
Borrowings, subordinated notes and debentures | 447,733 |  |  | — |  |  | 414,462 |  |  | — |  |  | 414,462 |
Securities loaned | 116,446 |  |  | — |  |  | — |  |  | 116,097 |  |  | 116,097 |
Customer, broker-dealer and clearing payables | 341,915 |  |  | — |  |  | — |  |  | 341,915 |  |  | 341,915 |
Accrued expense and other liabilities - derivative instruments | 934 |  |  | — |  |  | 934 |  |  | — |  |  | 934 |
| June 30, 2023
|  |  | Fair Value |  |
(Dollars in thousands) | Carrying Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value
Financial assets: |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 2,382,086 |  |  | $ | 2,382,086 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,382,086 |
Securities—trading | 758 |  |  | — |  |  | 758 |  |  | — |  |  | 758 |
Securities—available-for-sale | 232,350 |  |  | — |  |  | 27,345 |  |  | 205,005 |  |  | 232,350 |
Stock of regulatory agencies | 21,510 |  |  | — |  |  | 21,510 |  |  | — |  |  | 21,510 |
Loans held for sale, at fair value | 23,203 |  |  | — |  |  | 23,203 |  |  | — |  |  | 23,203 |
Loans held for sale, at lower of cost or fair value | 776 |  |  | — |  |  | — |  |  | 780 |  |  | 780 |
Loans held for investment—net | 16,456,728 |  |  | — |  |  | — |  |  | 16,417,183 |  |  | 16,417,183 |
Securities borrowed | 134,339 |  |  | — |  |  | — |  |  | 143,461 |  |  | 143,461 |
Customer, broker-dealer and clearing receivables | 374,074 |  |  | — |  |  | — |  |  | 386,082 |  |  | 386,082 |
Servicing rights | 25,443 |  |  | — |  |  | — |  |  | 25,443 |  |  | 25,443 |
Other assets - derivative instruments | 919 |  |  | — |  |  | 919 |  |  | — |  |  | 919 |
Financial liabilities: |  |  |  |  |  |  |  |  |
Total deposits | 17,123,108 |  |  | — |  |  | 17,064,084 |  |  | — |  |  | 17,064,084 |
Advances from the Federal Home Loan Bank | 90,000 |  |  | — |  |  | 83,192 |  |  | — |  |  | 83,192 |
Borrowings, subordinated notes and debentures | 361,779 |  |  | — |  |  | 327,564 |  |  | — |  |  | 327,564 |
Securities loaned | 159,832 |  |  | — |  |  | — |  |  | 159,416 |  |  | 159,416 |
Customer, broker-dealer and clearing payables | 445,477 |  |  | — |  |  | — |  |  | 445,447 |  |  | 445,447 |
Accrued expense and other liabilities - derivative instruments | 691 |  |  | — |  |  | 691 |  |  | — |  |  | 691 |
Carrying amount is the estimated fair value for cash and cash equivalents, stock of regulatory agencies, interest bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available for sale securities, loans held for sale and derivatives can be found in Note 3—“Fair Value” of the 2023 Form 10-K. The fair value of off-balance sheet items is not material.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration