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Fair Value of Financial Instruments | 3 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is the exchange price that would be received for an asset or paid transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2: Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3: Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset. Valuation techniques include use of option pricing models, discounted cash flow models and similar techniques. The methods of determining the fair value of assets and liabilities presented in this note are consistent with the methodologies disclosed in Note 19 of the 2022 Form 10-K. Financial Assets Recorded at Fair Value The following table presents financial assets measured at fair value on a recurring basis at the dates indicated:
| September 30, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
U.S government agencies | $ | 17,316 |  |  | $ | — |  |  | $ | 17,316 |  |  | $ | — |
MBS, residential | 91,507 |  |  | — |  |  | 91,507 |  |  | — |
Municipal bonds | 5,420 |  |  | — |  |  | 5,420 |  |  | — |
Corporate bonds | 47,498 |  |  | — |  |  | 47,498 |  |  | — |
Total | $ | 161,741 |  |  | $ | — |  |  | $ | 161,741 |  |  | $ | — |
| June 30, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
U.S government agencies | $ | 18,459 |  |  | $ | — |  |  | $ | 18,459 |  |  | $ | — |
MBS, residential | 47,233 |  |  | — |  |  | 47,233 |  |  | — |
Municipal bonds | 5,558 |  |  | — |  |  | 5,558 |  |  | — |
Corporate bonds | 55,728 |  |  | — |  |  | 55,728 |  |  | — |
Total | $ | 126,978 |  |  | $ | — |  |  | $ | 126,978 |  |  | $ | — |
There were no transfers between levels during the three months ended September 30, 2022 and 2021. The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
| September 30, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
Collateral dependent loans |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |
Commercial and industrial | $ | 344 |  |  | $ | — |  |  | $ | — |  |  | $ | 344 |
| June 30, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
Collateral dependent loans |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |
Commercial and industrial | $ | 415 |  |  | $ | — |  |  | $ | — |  |  | $ | 415 |
A loan is considered to be collateral dependent when, based on current information and events, the Company expects repayment of the financial assets to be provided substantially through the operation or sale of the collateral and the Company has determined that the borrower is experiencing financial difficulty as of the measurement date. For real estate loans, the fair value of the loan's collateral is determined by a third party appraisal, which is then adjusted for the estimated selling and closing costs related to liquidation of the collateral (typically ranging from 8% to 12% of the appraised value). For this asset class, the actual valuation methods (income, sales comparable, or cost) vary based on the status of the project or property. Additional discounts of 5% to 15% may be applied depending on the age of the appraisals. The unobservable inputs may vary depending on the individual asset with no one of the three methods being the predominant approach. For non-real estate loans, the fair value of the loan's collateral may be determined using an appraisal, net book value per the borrower's financial statements, or aging reports, adjusted or discounted based on management's historical knowledge, changes in market conditions from the time of the valuation, and management's expertise and knowledge of the customer and customer's business. The stated carrying value and estimated fair value amounts of financial instruments as of September 30, 2022 and June 30, 2022, are summarized below:
| September 30, 2022
| Carrying Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 94,159 |  |  | $ | 94,159 |  |  | $ | 94,159 |  |  | $ | — |  |  | $ | — |
Commercial paper, net | 85,296 |  |  | 85,296 |  |  | 85,296 |  |  | — |  |  | — |
Certificates of deposit in other banks | 27,535 |  |  | 27,535 |  |  | — |  |  | 27,535 |  |  | — |
Debt securities available for sale | 161,741 |  |  | 161,741 |  |  | — |  |  | 161,741 |  |  | — |
Loans held for sale | 76,252 |  |  | 77,513 |  |  | — |  |  | — |  |  | 77,513 |
Loans, net | 2,829,482 |  |  | 2,756,169 |  |  | — |  |  | — |  |  | 2,756,169 |
FHLB and FRB stock | 9,404 |  |  | N/A |  | N/A |  | N/A |  | N/A
SBIC investments | 12,235 |  |  | 12,235 |  |  | — |  |  | — |  |  | 12,235 |
Accrued interest receivable | 9,667 |  |  | 9,667 |  |  | — |  |  | 777 |  |  | 8,890 |
Liabilities |  |  |  |  |  |  |  |  |
Noninterest-bearing and NOW deposits | 1,431,101 |  |  | 1,431,101 |  |  | — |  |  | 1,431,101 |  |  | — |
Money market accounts | 960,150 |  |  | 960,150 |  |  | — |  |  | 960,150 |  |  | — |
Savings accounts | 240,412 |  |  | 240,412 |  |  | — |  |  | 240,412 |  |  | — |
Certificates of deposit | 471,005 |  |  | 462,500 |  |  | — |  |  | 462,500 |  |  | — |
Accrued interest payable | 193 |  |  | 193 |  |  | — |  |  | 193 |  |  | — |
| June 30, 2022
| Carrying Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 105,119 |  |  | $ | 105,119 |  |  | $ | 105,119 |  |  | $ | — |  |  | $ | — |
Commercial paper, net | 194,427 |  |  | 194,427 |  |  | 194,427 |  |  | — |  |  | — |
Certificates of deposit in other banks | 23,551 |  |  | 23,551 |  |  | — |  |  | 23,551 |  |  | — |
Debt securities available for sale | 126,978 |  |  | 126,978 |  |  | — |  |  | 126,978 |  |  | — |
Loans held for sale | 79,307 |  |  | 80,489 |  |  | — |  |  | — |  |  | 80,489 |
Loans, net | 2,734,605 |  |  | 2,687,293 |  |  | — |  |  | — |  |  | 2,687,293 |
FHLB and FRB stock | 9,326 |  |  | N/A |  | N/A |  | N/A |  | N/A
SBIC investments | 12,758 |  |  | 12,758 |  |  | — |  |  | — |  |  | 12,758 |
Accrued interest receivable | 8,573 |  |  | 8,573 |  |  | 24 |  |  | 580 |  |  | 7,969 |
Liabilities |  |  |  |  |  |  |  |  |
Noninterest-bearing and NOW deposits | 1,400,727 |  |  | 1,400,727 |  |  | — |  |  | 1,400,727 |  |  | — |
Money market accounts | 969,661 |  |  | 969,661 |  |  | — |  |  | 969,661 |  |  | — |
Savings accounts | 238,197 |  |  | 238,197 |  |  | — |  |  | 238,197 |  |  | — |
Certificates of deposit | 491,176 |  |  | 485,452 |  |  | — |  |  | 485,452 |  |  | — |
Accrued interest payable | 80 |  |  | 80 |  |  | — |  |  | 80 |  |  | — |
The Company had off-balance sheet financial commitments, which included approximately $962,986 and $921,239 of commitments to originate loans, undisbursed portions of construction loans, unused lines of credit, and standby letters of credit at September 30, 2022 and June 30, 2022, respectively (see "Note 9 – Commitments and Contingencies"). Since these commitments are based on current rates, the carrying amount approximates the fair value.

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI https://asc.fasb.org/topic&trid=2155941 + Details
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