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Impairment of Securities | 9 Months Ended
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Mar. 31, 2019
Investments Debt And Equity Securities [Abstract] |
Impairment of Securities | 9. IMPAIRMENT OF SECURITIES The following two tables summarize the fair values, gross unrealized and unrecognized losses and the number of securities impaired within the available for sale and held to maturity portfolios at March 31, 2019 and June 30, 2018. The gross unrealized and unrecognized losses, presented by security type, represent temporary impairments of value within each portfolio as of the dates presented. Temporary impairments within the available for sale portfolio have been recognized through other comprehensive loss as reductions in stockholders’ equity on a tax-effected basis. The tables are followed by a discussion that summarizes the Company’s rationale for recognizing impairments, where applicable, as temporary versus those identified as other-than-temporary. Such rationale is presented by investment type and generally applies consistently to both the available for sale and held to maturity portfolios, except where specifically noted.
| March 31, 2019 |
| Less than 12 Months |  |  | 12 Months or More |  |  | Total |
| Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |  |  | Number of Securities |  |  | Fair Value |  |  | Unrealized Losses |
| (Dollars in Thousands) |
Securities Available for Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities | $ | - |  |  | $ | - |  |  | $ | 3,737 |  |  | $ | 28 |  |  |  | 8 |  |  | $ | 3,737 |  |  | $ | 28 |
Obligations of state and political subdivisions |  | - |  |  |  | - |  |  |  | 6,583 |  |  |  | 37 |  |  |  | 15 |  |  |  | 6,583 |  |  |  | 37 |
Asset-backed securities |  | 35,733 |  |  |  | 242 |  |  |  | 14,682 |  |  |  | 26 |  |  |  | 6 |  |  |  | 50,415 |  |  |  | 268 |
Collateralized loan obligations |  | 153,332 |  |  |  | 1,047 |  |  |  | 54,574 |  |  |  | 577 |  |  |  | 20 |  |  |  | 207,906 |  |  |  | 1,624 |
Corporate bonds |  | 67,193 |  |  |  | 801 |  |  |  | 44,421 |  |  |  | 558 |  |  |  | 12 |  |  |  | 111,614 |  |  |  | 1,359 |
Trust preferred securities |  | - |  |  |  | - |  |  |  | 2,775 |  |  |  | 192 |  |  |  | 2 |  |  |  | 2,775 |  |  |  | 192 |
Collateralized mortgage obligations |  | - |  |  |  | - |  |  |  | 21,660 |  |  |  | 582 |  |  |  | 6 |  |  |  | 21,660 |  |  |  | 582 |
Residential pass-through securities |  | - |  |  |  | - |  |  |  | 67,566 |  |  |  | 1,193 |  |  |  | 13 |  |  |  | 67,566 |  |  |  | 1,193 |
Total | $ | 256,258 |  |  | $ | 2,090 |  |  | $ | 215,998 |  |  | $ | 3,193 |  |  |  | 82 |  |  | $ | 472,256 |  |  | $ | 5,283 |
| June 30, 2018 |
| Less than 12 Months |  |  | 12 Months or More |  |  | Total |
| Fair Value |  |  | Unrealized Losses |  |  | Fair Value |  |  | Unrealized Losses |  |  | Number of Securities |  |  | Fair Value |  |  | Unrealized Losses |
| (Dollars in Thousands) |
Securities Available for Sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. agency securities | $ | 2,579 |  |  | $ | 43 |  |  | $ | 1,832 |  |  | $ | 20 |  |  |  | 9 |  |  | $ | 4,411 |  |  | $ | 63 |
Obligations of state and political subdivisions |  | 24,443 |  |  |  | 672 |  |  |  | 540 |  |  |  | 37 |  |  |  | 65 |  |  |  | 24,983 |  |  |  | 709 |
Asset-backed securities |  | - |  |  |  | - |  |  |  | 24,728 |  |  |  | 134 |  |  |  | 3 |  |  |  | 24,728 |  |  |  | 134 |
Collateralized loan obligations |  | 189,258 |  |  |  | 914 |  |  |  | - |  |  |  | - |  |  |  | 19 |  |  |  | 189,258 |  |  |  | 914 |
Corporate bonds |  | 5,035 |  |  |  | 4 |  |  |  | 64,184 |  |  |  | 790 |  |  |  | 6 |  |  |  | 69,219 |  |  |  | 794 |
Trust preferred securities |  | - |  |  |  | - |  |  |  | 2,783 |  |  |  | 184 |  |  |  | 2 |  |  |  | 2,783 |  |  |  | 184 |
Collateralized mortgage obligations |  | 4,635 |  |  |  | 135 |  |  |  | 19,658 |  |  |  | 1,224 |  |  |  | 7 |  |  |  | 24,293 |  |  |  | 1,359 |
Residential pass-through securities |  | 63,889 |  |  |  | 1,921 |  |  |  | 26,697 |  |  |  | 1,573 |  |  |  | 19 |  |  |  | 90,586 |  |  |  | 3,494 |
Commercial pass-through securities |  | 3,890 |  |  |  | 66 |  |  |  | 3,982 |  |  |  | 8 |  |  |  | 2 |  |  |  | 7,872 |  |  |  | 74 |
Total | $ | 293,729 |  |  | $ | 3,755 |  |  | $ | 144,404 |  |  | $ | 3,970 |  |  |  | 132 |  |  | $ | 438,133 |  |  | $ | 7,725 |
| March 31, 2019 |
| Less than 12 Months |  |  | 12 Months or More |  |  | Total |
| Fair Value |  |  | Unrecognized Losses |  |  | Fair Value |  |  | Unrecognized Losses |  |  | Number of Securities |  |  | Fair Value |  |  | Unrecognized Losses |
| (Dollars in Thousands) |
Securities Held to Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of state and political subdivisions | $ | 2,235 |  |  | $ | 3 |  |  | $ | 35,556 |  |  | $ | 177 |  |  |  | 79 |  |  | $ | 37,791 |  |  | $ | 180 |
Subordinated debt |  | 20,212 |  |  |  | 182 |  |  |  | 4,991 |  |  |  | 9 |  |  |  | 6 |  |  |  | 25,203 |  |  |  | 191 |
Collateralized mortgage obligations |  | - |  |  |  | - |  |  |  | 10,088 |  |  |  | 298 |  |  |  | 6 |  |  |  | 10,088 |  |  |  | 298 |
Residential pass-through securities |  | 283 |  |  |  | 1 |  |  |  | 101,874 |  |  |  | 1,624 |  |  |  | 86 |  |  |  | 102,157 |  |  |  | 1,625 |
Commercial pass-through securities |  | - |  |  |  | - |  |  |  | 43,401 |  |  |  | 185 |  |  |  | 8 |  |  |  | 43,401 |  |  |  | 185 |
Total | $ | 22,730 |  |  | $ | 186 |  |  | $ | 195,910 |  |  | $ | 2,293 |  |  |  | 185 |  |  | $ | 218,640 |  |  | $ | 2,479 |
| June 30, 2018 |
| Less than 12 Months |  |  | 12 Months or More |  |  | Total |
| Fair Value |  |  | Unrecognized Losses |  |  | Fair Value |  |  | Unrecognized Losses |  |  | Number of Securities |  |  | Fair Value |  |  | Unrecognized Losses |
| (Dollars in Thousands) |
Securities Held to Maturity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of state and political subdivisions | $ | 86,678 |  |  | $ | 1,662 |  |  | $ | 3,151 |  |  | $ | 203 |  |  |  | 190 |  |  | $ | 89,829 |  |  | $ | 1,865 |
Subordinated debt |  | 41,010 |  |  |  | 284 |  |  |  | - |  |  |  | - |  |  |  | 7 |  |  |  | 41,010 |  |  |  | 284 |
Collateralized mortgage obligations |  | 42,712 |  |  |  | 753 |  |  |  | 12,730 |  |  |  | 595 |  |  |  | 8 |  |  |  | 55,442 |  |  |  | 1,348 |
Residential pass-through securities |  | 133,859 |  |  |  | 2,258 |  |  |  | 61,760 |  |  |  | 1,747 |  |  |  | 131 |  |  |  | 195,619 |  |  |  | 4,005 |
Commercial pass-through securities |  | 172,382 |  |  |  | 2,867 |  |  |  | 1,191 |  |  |  | 3 |  |  |  | 35 |  |  |  | 173,573 |  |  |  | 2,870 |
Total | $ | 476,641 |  |  | $ | 7,824 |  |  | $ | 78,832 |  |  | $ | 2,548 |  |  |  | 371 |  |  | $ | 555,473 |  |  | $ | 10,372 |
In general, if the fair value of a debt security is less than its amortized cost basis at the time of evaluation, the security is impaired and the impairment is to be evaluated to determine if it is other than temporary. The Company evaluates the impaired securities in its portfolio for possible other than temporary impairment (“OTTI”) on at least a quarterly basis. The following represents the circumstances under which an impaired security is determined to be other-than-temporarily impaired: (i) when the Company intends to sell the impaired debt security; (ii) when the Company more likely than not will be required to sell the impaired debt security before recovery of its amortized cost; or (iii) when an impaired debt security does not meet either of the two conditions above, but the Company does not expect to recover the entire amortized cost of the security. In the first two circumstances noted above, the amount of OTTI to be recognized in earnings is the entire difference between the security’s amortized cost basis and its fair value at the balance sheet date. In the third circumstance, however, the OTTI is to be separated into the amount representing the credit loss from the amount related to all other factors. The credit loss component is to be recognized in earnings while the non-credit loss component is to be recognized in other comprehensive income. In these cases, OTTI is generally predicated on an adverse change in cash flows versus those expected at the time of purchase. The absence of an adverse change in expected cash flows generally indicates that a security’s impairment is related to other non-credit loss factors and is thereby generally not recognized as OTTI. The Company considers a variety of factors when determining whether a credit loss exists for an impaired security including, but not limited to (i) the length of time and the extent to which the fair value has been less than the amortized cost basis; (ii) adverse conditions specifically related to the security, an industry, or a geographic area; (iii) the historical and implied volatility of the fair value of the security; (iv) the payment structure of the debt security; (v) actual or expected failure of the issuer of the security to make scheduled interest or principal payments; (vi) changes to the rating of the security by external rating agencies; and (vii) recoveries or additional declines in fair value subsequent to the balance sheet date. The Company regularly monitors the historical cash flows and financial strength of all issuers and/or guarantors to confirm that security impairment, where applicable, is not due to an actual or expected adverse change in security cash flows that would result in the recognition of credit-related OTTI. The unrealized and unrecognized losses on the Company’s securities are due to the combined effects of several market-related factors including, most notably, changes in market interest rates and changing market conditions which affect the supply and demand for such securities. Those market conditions may fluctuate over time resulting in certain securities being impaired for periods in excess of 12 months. However, the longevity of such impairment is not necessarily reflective of an expectation for an adverse change in cash flows signifying a credit loss. Consequently, the impairments of value resulting directly from these changing market conditions are considered non-credit related and temporary in nature. The Company has the stated ability and intent to hold until forecasted recovery those securities so designated at March 31, 2019 and does not intend to sell the temporarily impaired available for sale securities prior to the recovery of their fair value to a level equal to or greater than the Company’s amortized cost. Furthermore, the Company has concluded that the possibility of being required to sell the securities prior to their anticipated recovery is unlikely. In light of the factors noted above, the Company does not consider its balance of securities with unrealized and unrecognized losses at March 31, 2019 and June 30, 2018, to be other-than-temporarily impaired as of those dates.

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