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FAIR VALUE (Tables)

3 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

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 MBS1									27,624						—						27,624
Non-Agency MBS2									—						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 MBS1									23,947						—						23,947
Non-Agency MBS2									—						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”).

Schedule of 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

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 Rights1																		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 Rights1						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.

Schedule of Quantitative Information About Level 3 Fair Value Measurements

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%)

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 vehicles2:

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 vehicles2:

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.

Schedule of Aggregate Fair Value, Contractual Balance, and Gains of Loans Held For Sale

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

Schedule of Fair Value Assets Measured on Nonrecurring Basis

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

Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments at Period-end

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

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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