XML 122 R11.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Mortgage Loan Servicing and Loans Originated for Sale | 12 Months Ended
--- | ---
Jun. 30, 2013
Transfers and Servicing [Abstract] |
Mortgage Loan Servicing and Loans Originated for Sale | Mortgage Loan Servicing and Loans Originated for Sale The following summarizes the unpaid principal balance of loans serviced for others by the Corporation at the dates indicated:
(In Thousands) | As of June 30,
2013 | 2012 | 2011
Loans serviced for Freddie Mac | $ | 4,160 |  | $ | 4,727 |  | $ | 3,269 |
Loans serviced for Fannie Mae | 34,023 |  | 24,063 |  | 16,791 |
Loans serviced for FHLB – San Francisco | 52,096 |  | 68,013 |  | 87,022 |
Loans serviced for other investors | 1,877 |  | 2,072 |  | 2,269 |
Total loans serviced for others | $ | 92,156 |  | $ | 98,875 |  | $ | 109,351 |
MSA are recorded when loans are sold to investors and the servicing of those loans is retained by the Bank. MSA are subject to interest rate risk and may become impaired when interest rates fall and the borrowers refinance or prepay their mortgage loans. The MSA are derived primarily from single-family loans. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors and processing foreclosures. Income from servicing loans is reported as loan servicing and other fees in the Corporation’s consolidated statements of operations, and the amortization of MSA is reported as a reduction to the loan servicing income. Loan servicing income includes servicing fees from investors and certain fees collected from borrowers, such as late payment fees. As of June 30, 2013 and 2012, the Corporation held borrowers’ escrow balances related to loans serviced for others of $283,000 and $302,000, respectively. In estimating fair values of the MSA at June 30, 2013 and 2012, the Corporation used a weighted-average constant prepayment rate (“CPR”) of 24.90% and 26.61%, respectively, and a weighted-average discount rate of 9.11% and 9.10%, respectively. The CPR was derived from an independent third party vendor and the weighted-average discount rate was derived from market data. The MSA, which is included in prepaid expenses and other assets in the Consolidated Statements of Financial Condition, had a carrying value of $334,000 and a fair value of $395,000 at June 30, 2013. This compares to the MSA at June 30, 2012 which had a carrying value of $327,000 and a fair value of $398,000. An allowance may be recorded to adjust the carrying value of each category of MSA to the lower of cost or market. As of June 30, 2013, a total allowance of $200,000 was required for five categories of MSA, compared to a total allowance of $164,000 from four categories of MSA as of June 30, 2012. Total additions to the MSA during the years ended June 30, 2013, 2012 and 2011 were $104,000, $106,000 and $16,000, respectively. Total amortization of the MSA during the years ended June 30, 2013, 2012 and 2011 was $61,000, $45,000 and $45,000, respectively. Loans sold to the FHLB – San Francisco were completed under the MPF Program, which entitles the Bank to a credit enhancement fee collected from FHLB – San Francisco on a monthly basis as described in Note 1 under PBM activities. The following table summarizes the Corporation’s MSA for years ended June 30, 2013 and 2012.
| Year Ended June 30,
(Dollars In Thousands) | 2013 | 2012
MSA balance, beginning of fiscal year | $ | 491 |  | $ | 430 |
Additions | 104 |  | 106 |
Amortization | (61 | ) | (45 | )
MSA balance, end of fiscal year, before allowance | 534 |  | 491 |
Allowance | (200 | ) | (164 | )
MSA balance, end of fiscal year | $ | 334 |  | $ | 327 |
Fair value, beginning of fiscal year | $ | 398 |  | $ | 589 |
Fair value, end of fiscal year | $ | 395 |  | $ | 398 |
Allowance, beginning of fiscal year | $ | 164 |  | $ | 76 |
Impairment provision | 36 |  | 88 |
Allowance, end of fiscal year | $ | 200 |  | $ | 164 |
Key Assumptions: |  |
Weighted-average discount rate | 9.11 | % | 9.10 | %
Weighted-average prepayment speed | 24.90 | % | 26.61 | %
The following table summarizes the estimated future amortization of MSA for the next five years and thereafter:
| Amount
Year Ending June 30, | (In Thousands)
2014 | $ | 130 |
2015 | 94 |
2016 | 67 |
2017 | 43 |
2018 | 23 |
Thereafter | 177 |
Total estimated amortization expense | $ | 534 |
The following table represents the hypothetical effect on the fair value of the Corporation’s MSA using an unfavorable shock analysis of certain key valuation assumptions as of June 30, 2013 and 2012. This analysis is presented for hypothetical purposes only. As the amounts indicate, changes in fair value based on changes in assumptions generally cannot be extrapolated because the relationship of the change in assumptions to the change in fair value may not be linear.
| Year Ended June 30,
(Dollars In Thousands) | 2013 | 2012
MSA net carrying value | $ | 334 |  | $ | 327 |
CPR assumption (weighted-average) | 24.90 | % | 26.61 | %
Impact on fair value with 10% adverse change in prepayment speed | $ | (18 | ) | $ | (18 | )
Impact on fair value with 20% adverse change in prepayment speed | $ | (33 | ) | $ | (34 | )
Discount rate assumption (weighted-average) | 9.11 | % | 9.10 | %
Impact on fair value with 10% adverse change in discount rate | $ | (12 | ) | $ | (11 | )
Impact on fair value with 20% adverse change in discount rate | $ | (24 | ) | $ | (21 | )
The Corporation has also recorded interest-only strips with a fair value of $98,000, comprised of gross unrealized gains of $96,000 and an unamortized cost of $2,000 at June 30, 2013. This compares to interest-only strips at June 30, 2012 with a fair value of $130,000, comprised of gross unrealized gains of $127,000 and an unamortized cost of $3,000. There were no additions to interest-only strips during fiscal 2013, 2012 or 2011. Total amortization of the interest-only strips during the years ended June 30, 2013, 2012 and 2011 were $1,000, $1,000 and $1,000, respectively. Loans sold consisted of the following for the years indicated:
(In Thousands) | Year Ended June 30,
2013 | 2012 | 2011
Loans sold: |  |  |
Servicing – released | $ | 3,506,027 |  | $ | 2,460,281 |  | $ | 2,115,845 |
Servicing – retained | 16,331 |  | 13,121 |  | 1,999 |
Total loans sold | $ | 3,522,358 |  | $ | 2,473,402 |  | $ | 2,117,844 |
During the years ended June 30, 2013, 2012 and 2011, the Corporation sold 20%, 43% and 45%, respectively, of its loans originated for sale to a single investor, other than Freddie Mac or Fannie Mae. If the Corporation is unable to sell loans to its primary investor, find alternative investors, or change its loan programs to meet investor guidelines, it may have a significant negative impact on the Corporation’s results of operations. Loans held for sale, at fair value, at June 30, 2013 and 2012 consisted of the following:
(In Thousands) | June 30,
2013 | 2012
Fixed rate | $ | 183,999 |  | $ | 228,070 |
Adjustable rate | 4,051 |  | 3,569 |
Total loans held for sale, at fair value | $ | 188,050 |  | $ | 231,639 |

X
- Definition The entire disclosure for mortgage loans on real estate, this includes the supplemental information pertaining to each mortgage loan receivable that equals or exceeds three percent of the carrying amount of mortgages. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04.(c) Schedule IV) -URI http://asc.fasb.org/extlink&oid=6882300&loc=d3e5864-122674 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 29 -Article 12 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 04 -Paragraph c -Subparagraph Schedule IV -Article 5 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 948 -SubTopic 310 -Section S99 -Paragraph 1 -Subparagraph (SX 210.12-29) -URI http://asc.fasb.org/extlink&oid=6589523&loc=d3e617274-123014 + Details
Name: | us-gaap_MortgageLoansOnRealEstateByLoanDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_TransfersAndServicingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration