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FAIR VALUE (Tables)

6 Months Ended

Dec. 31, 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 December 31, 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:

						December 31, 2023
(Dollars in thousands)									Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
ASSETS:
Trading securities									$	329					$	—					$	329
Available-for-sale securities:
Agency MBS1									28,664						—						28,664
Non-Agency MBS2									—						207,708						207,708
Municipal									3,440						—						3,440
Total—Available-for-sale securities:									$	32,104					$	207,708					$	239,812
Loans held for sale									$	13,468											$	13,468
Servicing rights									$	—					$	28,043					$	28,043
Other assets—Derivative instruments									$	96,084					$	—					$	96,084
LIABILITIES:
Accounts payable and other liabilities—Derivative instruments									$	92,144					$	—					$	92,144
						June 30, 2023
(Dollars in thousands)									Significant Other Observable Inputs (Level 2)						Significant Unobservable Inputs (Level 3)						Total
ASSETS:
Trading securities									$	758					$	—					$	758
Available-for-sale securities:
Agency MBS1									23,947						—						23,947
Non-Agency MBS2									—						205,005						205,005
Municipal									3,398						—						3,398
Total—Available-for-sale securities:									$	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:
Accounts payable 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
									December 31, 2023
(Dollars in thousands)									Available-for-Sale Securities: Non-Agency MBS						Servicing Rights1																		Total
Opening balance									$	206,076					$	29,338																	$	235,414
Total gains or losses for the period:
Included in earnings—Mortgage banking and servicing rights income									—						(1,494)																		(1,494)
Included in other comprehensive income									1,876						—																		1,876
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions									—						199																		199
Settlements									(244)						—																		(244)
Closing balance									$	207,708					$	28,043																	$	235,751
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period									$	—					$	(1,494)																	$	(1,494)
									For the Six Months Ended
									December 31, 2023
(Dollars in thousands)									Available-for-Sale Securities: Non-Agency MBS						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									—						365																		365
Included in other comprehensive income									3,191						—																		3,191
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions									—						2,235																		2,235
Settlements									(488)						—																		(488)
Closing balance									$	207,708					$	28,043																	$	235,751
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period									$	—					$	365																	$	365

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 $0.3 million and $0.5 million for the three and six months ended December 31, 2023 and a decrease in servicing rights value resulting from market-driven changes in interest rates of $1.2 million three months ended December 31, 2023 and an increase of $0.9 million for the six months ended December 31, 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
									December 31, 2022
(Dollars in thousands)									Available-for-Sale Securities: Non-Agency MBS						Servicing Rights1						Derivative Instruments, net						Total
Opening balance									$	184,012					$	26,373					$	535					$	210,920
Total gains or losses for the period:
Included in earnings—Mortgage banking and servicing rights income									—						(1,046)						(517)						(1,563)
Included in other comprehensive income									(2,143)						—						—						(2,143)
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions									—						199						—						199
Settlements									(6,746)						—						—						(6,746)
Closing balance									$	175,123					$	25,526					$	18					$	200,667
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period									$	—					$	(1,046)					$	(517)					$	(1,563)
									For the Six Months Ended
									December 31, 2022
(Dollars in thousands)									Available-for-Sale Securities: Non-Agency MBS						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									—						(93)						(446)						(539)
Included in other comprehensive income									(4,616)						—						—						(4,616)
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions									—						406						—						406
Settlements									(7,075)						—						—						(7,075)
Closing balance									$	175,123					$	25,526					$	18					$	200,667
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period									$	—					$	(93)					$	(446)					$	(539)

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 $0.1 million and $0.5 million for the three and six months ended December 31, 2022 and an decrease in servicing rights value resulting from market-driven changes in interest rates of $0.9 million for the three months ended December 31, 2022 and an increase of $0.4 million for the six months ended December 31, 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:

December 31, 2023

(Dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average)1

Securities – Non-agency MBS

$

207,708

Discounted Cash Flow

Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over SOFR Swaps

0.0 to 59.2% (34.0%) 0.0 to 31.4% (2.5%) 0.0 to 68.7% (28.5%) 2.6 to 6.5% (2.6%)

Servicing Rights

$

28,043

Discounted Cash Flow

Projected Constant Prepayment Rate, Life (in years), Discount Rate

5.2 to 38.1% (12.2%) 1.6 to 15.2 (7.6) 9.5 to 11.5% (9.8%)

June 30, 2023

(Dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average)1

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%)

1 The weighted average for Securities - Non-agency MBS is based on the relative fair value of the securities and for Servicing Rights is based on the relative unpaid principal of the loans being serviced.

The following table presents quantitative information about Level 3 fair value measurements for other real estate owned measured at fair value on a non-recurring basis:

December 31, 2023

(Dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average) 1

Other real estate owned:

Single family real estate

$

5,574

Sales comparison approach

Differences between the comparable sales

62.1 to 93.6% (62.1%)

June 30, 2023

(Dollars in thousands)

Fair Value

Valuation Technique

Unobservable Input

Range (Weighted Average) 1

Other real estate owned:

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 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. The weighted average is based on the relative fair value of comparable sales.

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)			December 31, 2023						June 30, 2023
Aggregate fair value			$	13,468					$	23,203
Contractual balance			13,013						22,844
Unrealized gain			$	455					$	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												For the Six Months Ended
			December 31,												December 31,
(Dollars in thousands)			2023						2022						2023						2022
Interest income			$	141					$	103					$	330					$	153
Change in fair value			33						(422)						(96)						(331)
Total			$	174					$	(319)					$	234					$	(178)

Schedule of Fair Value Assets Measured on Nonrecurring Basis

The table below summarizes assets measured at fair value on a non-recurring basis:

			December 31, 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
Autos			$	—					$	—					$	1,743					$	1,743
Total			$	—					$	—					$	7,317					$	7,317
			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 December 31, 2023 and June 30, 2023 were:

			December 31, 2023
									Fair Value
(Dollars in thousands)			Carrying Amount						Level 1						Level 2						Level 3						Total Fair Value
Financial assets:
Cash, cash equivalents and segregated cash			$	1,763,723					$	1,763,723					$	—					$	—					$	1,763,723
Trading securities			329						—						329						—						329
Available-for-sale securities			239,812						—						32,104						207,708						239,812
Stock of regulatory agencies			21,534						—						21,534						—						21,534
Loans held for sale, at fair value			13,468						—						13,468						—						13,468
Loans held for investment—net			18,264,354						—						—						18,313,778						18,313,778
Securities borrowed			145,176						—						—						155,513						155,513
Customer, broker-dealer and clearing receivables			265,857						—						—						278,219						278,219
Servicing rights			28,043						—						—						28,043						28,043
Other assets - derivative instruments			96,084						—						96,084						—						96,084
Financial liabilities:
Total deposits			18,203,912						—						18,120,805						—						18,120,805
Advances from the Federal Home Loan Bank			90,000						—						84,150						—						84,150
Borrowings, subordinated notes and debentures			341,086						—						314,321						—						314,321
Securities loaned			155,492						—						—						155,492						155,492
Customer, broker-dealer and clearing payables			368,885						—						—						368,885						368,885
Accounts payable and other liabilities - derivative instruments			92,144						—						92,144						—						92,144

			June 30, 2023
									Fair Value
(Dollars in thousands)			Carrying Amount						Level 1						Level 2						Level 3						Total Fair Value
Financial assets:
Cash, cash equivalents and segregated cash			$	2,382,086					$	2,382,086					$	—					$	—					$	2,382,086
Trading securities			758						—						758						—						758
Available-for-sale securities			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
Accounts payable and other liabilities - derivative instruments			691						—						691						—						691

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