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Fair Value of Financial Instruments | 9 Months Ended
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Mar. 31, 2023
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 to 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: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company's own assumptions about the assumptions that market participants would use in pricing an asset or liability. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following is a description of valuation methodologies used for assets recorded at fair value. As of both March 31, 2023 and June 30, 2022, the Company did not have any liabilities recorded at fair value. 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:
| March 31, 2023
| Total |  | Level 1 |  | Level 2 |  | Level 3
Debt securities available for sale |  |  |  |  |  |  |
U.S government agencies | $ | 15,565 |  |  | $ | — |  |  | $ | 15,565 |  |  | $ | — |
MBS, residential | 101,131 |  |  | — |  |  | 101,131 |  |  | — |
Municipal bonds | 3,432 |  |  | — |  |  | 3,432 |  |  | — |
Corporate bonds | 34,590 |  |  | — |  |  | 34,590 |  |  | — |
Total debt securities available for sale | $ | 154,718 |  |  | $ | — |  |  | $ | 154,718 |  |  | $ | — |
Loans held for sale | $ | 1,209 |  |  | $ | — |  |  | $ | 1,209 |  |  | $ | — |
| June 30, 2022
| Total |  | Level 1 |  | Level 2 |  | Level 3
Debt securities available for sale |  |  |  |  |  |  |
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 debt securities available for sale | $ | 126,978 |  |  | $ | — |  |  | $ | 126,978 |  |  | $ | — |
Loans held for sale carried at fair value are valued at the individual loan level using quoted secondary market prices. There were no transfers between levels during the nine months ended March 31, 2023 and June 30, 2022. The following table presents financial assets measured at fair value on a non-recurring basis at the dates indicated:
| March 31, 2023
| Total |  | Level 1 |  | Level 2 |  | Level 3
Collateral dependent loans |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |
Commercial real estate - owner occupied | $ | 920 |  |  | $ | — |  |  | $ | — |  |  | $ | 920 |
Commercial real estate - non-owner occupied | 2,971 |  |  | — |  |  | — |  |  | 2,971 |
Commercial loans |  |  |  |  |  |  |
Commercial and industrial | 336 |  |  | — |  |  | — |  |  | 336 |
Total | $ | 4,227 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,227 |
| 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 March 31, 2023 and June 30, 2022, are summarized below:
| March 31, 2023
| Carrying Value |  | Fair Value |  | Level 1 |  | Level 2 |  | Level 3
Assets |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 314,413 |  |  | $ | 314,413 |  |  | $ | 314,413 |  |  | $ | — |  |  | $ | — |
Certificates of deposit in other banks | 33,102 |  |  | 33,102 |  |  | — |  |  | 33,102 |  |  | — |
Debt securities available for sale, at fair value | 154,718 |  |  | 154,718 |  |  | — |  |  | 154,718 |  |  | — |
FHLB and FRB stock | 19,125 |  |  | N/A |  | N/A |  | N/A |  | N/A
SBIC investments, at cost | 13,620 |  |  | 13,620 |  |  | — |  |  | — |  |  | 13,620 |
Loans held for sale, at fair value | 1,209 |  |  | 1,209 |  |  | — |  |  | 1,209 |  |  | — |
Loans held for sale, at the lower of cost or fair value | 89,172 |  |  | 91,040 |  |  | — |  |  | — |  |  | 91,040 |
Loans, net | 3,601,830 |  |  | 3,468,167 |  |  | — |  |  | — |  |  | 3,468,167 |
Accrued interest receivable | 13,813 |  |  | 13,813 |  |  | — |  |  | 786 |  |  | 13,027 |
Liabilities |  |  |  |  |  |  |  |  |
Noninterest-bearing and NOW deposits | 1,550,670 |  |  | 1,550,670 |  |  | — |  |  | 1,550,670 |  |  | — |
Money market accounts | 1,299,503 |  |  | 1,299,503 |  |  | — |  |  | 1,299,503 |  |  | — |
Savings accounts | 228,390 |  |  | 228,390 |  |  | — |  |  | 228,390 |  |  | — |
Certificates of deposit | 597,036 |  |  | 588,776 |  |  | — |  |  | 588,776 |  |  | — |
Junior subordinated debt | 9,945 |  |  | 9,980 |  |  | — |  |  | 9,980 |  |  | — |
Borrowings | 320,263 |  |  | 320,261 |  |  | — |  |  | 320,261 |  |  | — |
Accrued interest payable | 1,660 |  |  | 1,660 |  |  | — |  |  | 1,660 |  |  | — |
| 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 |  |  | — |
FHLB and FRB stock | 9,326 |  |  | N/A |  | N/A |  | N/A |  | N/A
SBIC investments, at cost | 12,758 |  |  | 12,758 |  |  | — |  |  | — |  |  | 12,758 |
Loans held for sale | 79,307 |  |  | 80,489 |  |  | — |  |  | — |  |  | 80,489 |
Loans, net | 2,734,605 |  |  | 2,687,293 |  |  | — |  |  | — |  |  | 2,687,293 |
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 $993,018 and $921,239 of commitments to originate loans, undisbursed portions of construction loans, unused lines of credit, and standby letters of credit at March 31, 2023 and June 30, 2022, respectively (see "Note 12 – 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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