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:			Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability or inputs that are derived principally from, or corroborated by, market data by correlation or other means.

Level 3:			Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The Company’s available for sale investment securities are reported at fair value utilizing Level 2 inputs. For these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the securities’ terms and conditions, among other things. From time to time, the Company validates prices supplied by the independent pricing service by comparison to prices obtained from third-party sources or derived using internal models.

The Company has contracted with a third party vendor to provide periodic valuations for its interest rate derivatives to determine the fair value of its interest rate contracts. The vendor utilizes standard valuation methodologies applicable to interest rate derivatives such as discounted cash flow analysis and extensions of the Black-Scholes model. Such valuations are based upon readily observable market data and are therefore considered Level 2 valuations by the Company.


	March 31, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Assets:
Debt securities available for sale:

Asset-backed securities	$	—	$	86,360	$	—	$	86,360
Collateralized loan obligations	—		406,695		—		406,695
Corporate bonds	—		125,081		—		125,081
Total debt securities	—		618,136		—		618,136

Mortgage-backed securities available for sale:

Residential pass-through securities	—		344,972		—		344,972
Commercial pass-through securities	—		135,547		—		135,547
Total mortgage-backed securities	—		480,519		—		480,519
Total securities available for sale	$	—	$	1,098,655	$	—	$	1,098,655

Interest rate contracts	$	—	$	55,794	$	—	$	55,794

Total assets	$	—	$	1,154,449	$	—	$	1,154,449


	June 30, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Assets:
Debt securities available for sale:

Asset-backed securities	$	—	$	136,170	$	—	$	136,170
Collateralized loan obligations	—		376,996		—		376,996
Corporate bonds	—		135,018		—		135,018
Total debt securities	—		648,184		—		648,184

Mortgage-backed securities available for sale:

Residential pass-through securities	—		436,151		—		436,151
Commercial pass-through securities	—		143,394		—		143,394
Total mortgage-backed securities	—		579,545		—		579,545
Total securities available for sale	$	—	$	1,227,729	$	—	$	1,227,729

Interest rate contracts	$	—	$	71,624	$	—	$	71,624

Total assets	$	—	$	1,299,353	$	—	$	1,299,353

The fair value of collateral dependent loans that are individually analyzed is determined based upon the appraised fair value of the underlying collateral, less costs to sell. Such collateral primarily consists of real estate and, to a lesser extent, other business assets. Management may also adjust appraised values to reflect estimated changes in market values or apply other adjustments to appraised values resulting from its knowledge of the collateral. Internal valuations may be utilized to determine the fair value of other business assets. For non-collateral-dependent loans, management estimates fair value using discounted cash flows based on inputs that are largely unobservable and instead reflect management’s own estimates of the assumptions as a market participant would in pricing such loans. Individually analyzed collateral dependent loans are considered a Level 3 valuation by the Company.

Other real estate owned is recorded at estimated fair value, less estimated selling costs when acquired, thus establishing a new cost basis. Fair value is generally based on independent appraisals. These appraisals include adjustments to comparable assets based on the appraisers’ market knowledge and experience. When an asset is acquired, the excess of the loan balance over fair value, less estimated selling costs, is charged to the allowance for credit losses. If further declines in the estimated fair value of the asset occur, a write-down is recorded through expense. The valuation of foreclosed assets is subjective in nature and may be adjusted in the future because of changes in economic conditions. Other real estate owned is considered a Level 3 valuation by the Company.


	March 31, 2024
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Collateral dependent loans:

Multi-family mortgage	$	—	$	—	$	1,896	$	1,896

Total	$	—	$	—	$	1,896	$	1,896


	June 30, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(In Thousands)
Collateral dependent loans:
Residential mortgage	$	—	$	—	$	449	$	449
Multi-family mortgage	—		—		7,300		7,300
Nonresidential mortgage	—		—		9,972		9,972
Total	$	—	$	—	$	17,721	$	17,721

Other real estate owned, net:
Nonresidential	$	—	$	—	$	12,956	$	12,956
Total	$	—	$	—	$	12,956	$	12,956


	March 31, 2024
	Fair Value		Valuation Techniques		Unobservable Input		Range	Weighted Average
	(Dollars in Thousands)
Collateral dependent loans:

Multi-family mortgage	$	1,896	Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	13.09%	13.09	%

Total	$	1,896


	June 30, 2023
	Fair Value		Valuation Techniques		Unobservable Input		Range	Weighted Average
	(Dollars in Thousands)
Collateral dependent loans:
Residential mortgage	$	449	Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	6% - 9%	6.93	%
Multi-family mortgage	7,300		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	6% - 9%	7.78	%
Nonresidential mortgage	9,972		Market valuation of underlying collateral	(1)	Adjustments to reflect current conditions/selling costs	(2)	9% - 16%	11.78	%
Total	$	17,721

Other real estate owned, net:
Nonresidential	$	12,956	Market valuation of underlying collateral	(3)	Adjustments to reflect current conditions/selling costs	(2)	4.00%	4.00	%
Total	$	12,956

(2)The fair value basis of collateral dependent loans and other real estate owned is adjusted to reflect management’s estimates of selling costs including, but not limited to, real estate brokerage commissions and title transfer fees.

At March 31, 2024, collateral dependent loans valued using Level 3 inputs comprised loans with principal balances totaling $1.9 million and a valuation allowance of $9,000 reflecting an aggregate fair value of $1.9 million. By comparison, at June 30, 2023, collateral dependent loans valued using Level 3 inputs comprised loans with principal balances totaling $21.0 million and a valuation allowance of $3.3 million reflecting an aggregate fair value of $17.7 million.

Once a loan is foreclosed, the fair value of the other real estate owned continues to be evaluated based upon the fair value of the repossessed real estate originally securing the loan. At March 31, 2024, the Company had no other real estate owned assets. At June 30, 2023, the Company held other real estate owned totaling $13.0 million, whose carrying value was written down utilizing Level 3 inputs.


	March 31, 2024
	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	71,027	$	71,027	$	71,027	$	—	$	—
Investment securities available for sale	1,098,655		1,098,655		—		1,098,655		—
Investment securities held to maturity	139,643		123,576		—		123,576		—
Loans held-for-sale	4,117		4,159		—		4,159		—
Net loans receivable	5,713,406		5,150,589		—		—		5,150,589
FHLB Stock	81,347		—		—		—		—
Interest receivable	31,065		31,065		28		10,318		20,719
Interest rate contracts	55,794		55,794		—		55,794		—

Financial liabilities:
Deposits other than certificates of deposits	3,565,577		3,565,577		3,565,577		—		—
Certificates of deposits	1,643,473		1,632,554		—		—		1,632,554
Borrowings	1,722,178		1,716,261		—		—		1,716,261
Interest payable on deposits	5,849		5,849		3,611		—		2,238
Interest payable on borrowings	6,727		6,727		—		—		6,727


	June 30, 2023
	Carrying Amount		Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
	(In Thousands)
Financial assets:
Cash and cash equivalents	$	70,515	$	70,515	$	70,515	$	—	$	—
Investment securities available for sale	1,227,729		1,227,729		—		1,227,729		—
Investment securities held to maturity	146,465		131,169		—		131,169		—
Loans held-for-sale	9,591		9,442		—		9,442		—
Net loans receivable	5,780,687		5,261,808		—		—		5,261,808
FHLB Stock	71,734		—		—		—		—
Interest receivable	28,133		28,133		14		8,924		19,195
Interest rate contracts	71,624		71,624		—		71,624		—

Financial liabilities:
Deposits other than certificates of deposits	3,611,632		3,611,632		3,611,632		—		—
Certificates of deposits	2,017,551		1,989,434		—		—		1,989,434
Borrowings	1,506,812		1,498,920		—		—		1,498,920
Interest payable on deposits	6,826		6,826		1,933		—		4,893
Interest payable on borrowings	5,282		5,282		—		—		5,282

Commitments. The fair value of commitments to fund credit lines and originate or participate in loans held in portfolio or loans held for sale is estimated using fees currently charged to enter into similar agreements taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, including those relating to loans held for sale that are considered derivative instruments for financial statement reporting purposes, the fair value also considers the difference between current levels of interest and the committed rates. The carrying value, represented by the net deferred fee arising from the unrecognized commitment, and the fair value, determined by discounting the remaining contractual fee over the term of the commitment using fees currently charged to enter into similar agreements with similar credit risk, is not considered material for disclosure.

Limitations. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Because no fair value exists for a significant portion of the financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature, involve uncertainties and matters of judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The fair value estimates are based on existing on-and-off balance sheet financial instruments without attempting to value anticipated future business and the value of assets and liabilities that are not considered financial instruments. Other significant assets and liabilities that are not considered financial assets and liabilities include premises and equipment, and advances from borrowers for taxes and insurance. In addition, the ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of the estimates.

Finally, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates which must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies introduces a greater degree of subjectivity to these estimated fair values.