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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Schedule of Aggregate Fair Value and Aggregate Unpaid Principal Balance of Loans Held for Sale

The following table describes the difference at the dates indicated between the aggregate fair value and the aggregate unpaid principal balance of loans held for sale at fair value.

(In Thousands)	Aggregate Fair Value			Aggregate Unpaid Principal Balance			Net Unrealized Gain
As of September 30, 2014:
Loans held for sale, measured at fair value	$	180,558		$	174,564		$	5,994
As of June 30, 2014:
Loans held for sale, measured at fair value	$	158,883		$	152,192		$	6,691

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following fair value hierarchy tables present information at the dates indicated about the Corporation’s assets measured at fair value on a recurring basis:

	Fair Value Measurement at September 30, 2014 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities:
U.S. government agency MBS	$	—		$	8,714		$	—		$	8,714
U.S. government sponsored enterprise MBS	—			6,001			—			6,001
Private issue CMO	—			—			828			828
Common stock - community development financial institution	—			—			250			250
Investment securities	—			14,715			1,078			15,793
Loans held for sale, at fair value	—			180,558			—			180,558
Interest-only strips	—			—			70			70
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			1,797			1,797
Option contracts	—			—			33			33
Derivative assets	—			—			1,830			1,830
Total assets	$	—		$	195,273		$	2,978		$	198,251
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	12		$	12
Mandatory loan sale commitments	—			—			245			245
TBA MBS trades	—			246			—			246
Derivative liabilities	—			246			257			503
Total liabilities	$	—		$	246		$	257		$	503

	Fair Value Measurement at June 30, 2014 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities:
U.S. government agency MBS	$	—		$	9,109		$	—		$	9,109
U.S. government sponsored enterprise MBS	—			6,385			—			6,385
Private issue CMO	—			—			853			853
Investment securities	—			15,494			853			16,347
Loans held for sale, at fair value	—			158,883			—			158,883
Interest-only strips	—			—			62			62
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			2,570			2,570
Derivative assets	—			—			2,570			2,570
Total assets	$	—		$	174,377		$	3,485		$	177,862
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	4		$	4
Mandatory loan sale commitments	—			—			93			93
TBA MBS trades	—			1,335			—			1,335
Derivative liabilities	—			1,335			97			1,432
Total liabilities	$	—		$	1,335		$	97		$	1,432

Schedule for Reconciliation of Recurring Fair Value Measurements Using Level 3 Inputs

The following tables summarize reconciliations of the beginning and ending balances during the periods shown of recurring fair value measurements recognized in the Condensed Consolidated Statements of Financial Condition using Level 3 inputs:

	For the Quarter Ended September 30, 2014
	Fair Value Measurement Using Significant Other Unobservable Inputs (Level 3)
(In Thousands)	Private Issue CMO			Common stock (1)			Interest- Only Strips			Loan Commit- ments to Originate (2)			Manda- tory Commit- ments (3)			Option Contracts			Total
Beginning balance at June 30, 2014	$	853		$	—		$	62		$	2,566		$	(93	)	$	—		$	3,388
Total gains or losses (realized/   unrealized):
Included in earnings	—			—			—			(781		)	(156		)	(105		)	(1,042		)
Included in other comprehensive  loss	(1		)	—			8			—			—			—			7
Purchases	—			250			—			—			—			187			437
Issuances	—			—			—			—			—			—			—
Settlements	(24		)	—			—			—			4			(49		)	(69		)
Transfers in and/or out of Level 3	—			—			—			—			—			—			—
Ending balance at September 30, 2014	$	828		$	250		$	70		$	1,785		$	(245	)	$	33		$	2,721

⁽¹⁾  Common stock of a community development financial institution

⁽²⁾  Consists of commitments to extend credit on loans to be held for sale.

⁽³⁾  Consists of mandatory loan sale commitments.

	For the Quarter Ended September 30, 2013
	Fair Value Measurement Using Significant Other Unobservable Inputs (Level 3)
(In Thousands)	Private Issue CMO			Interest- Only Strips			Loan Commit- ments to  Originate (1)			Manda- tory Commit- ments (2)			Option Contracts			Total
Beginning balance at June 30, 2013	$	1,019		$	98		$	(1,032	)	$	83		$	589		$	757
Total gains or losses (realized/unrealized):
Included in earnings	—			—			4,397			(230		)	107			4,274
Included in other comprehensive loss	—			5			—			—			—			5
Purchases	—			—			—			—			216			216
Issuances	—			—			—			—			—			—
Settlements	(66		)	—			—			6			(830		)	(890		)
Transfers in and/or out of Level 3	—			—			—			—			—			—
Ending balance at September 30, 2013	$	953		$	103		$	3,365		$	(141	)	$	82		$	4,362

⁽¹⁾  Consists of commitments to extend credit on loans to be held for sale.

⁽²⁾  Consists of mandatory loan sale commitments.

Schedule of Fair Value Assets Measured on Nonrecurring Basis

The following fair value hierarchy tables present information about the Corporation’s assets measured at fair value at the dates indicated on a nonrecurring basis:

	Fair Value Measurement at September 30, 2014 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	11,026		$	1,765		$	12,791
MSA	—			—			213			213
Real estate owned, net	—			2,707			—			2,707
Total	$	—		$	13,733		$	1,978		$	15,711

	Fair Value Measurement at June 30, 2014 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	10,910		$	5,026		$	15,936
MSA	—			—			241			241
Real estate owned, net	—			2,467			—			2,467
Total	$	—		$	13,377		$	5,267		$	18,644

Schedule of Additional Information About Valuation Techniques and Inputs Used for Assets and Liabilities

The following table presents additional information about valuation techniques and inputs used for assets and liabilities, including derivative financial instruments, which are measured at fair value and categorized within Level 3 as of September 30, 2014:

(Dollars In Thousands)	Fair Value As of September 30, 2014			Valuation Techniques	Unobservable Inputs	Range (1) (Weighted Average)	Impact to Valuation from an Increase in Inputs (2)
Assets:
Securities available-for sale: Private issue CMO	$	828		Market comparable pricing	Comparability adjustment	0.1% – 1.5% (1.3%)	Increase
Common stock of community    development financial    institution	$	250		Market pricing	Pricing indications from recent transactions	$0.00 - $0.14 ($0.05)	Increase
Non-performing loans	$	77		Discounted cash flow	Default rates	0.0% - 30.0% (0.0%)	Decrease
Non-performing loans	$	1,688		Relative value analysis	Loss severity	20.0% - 38.0% (23.2%)	Decrease
MSA	$	213		Discounted cash flow	Prepayment speed (CPR) Discount rate	12.8% - 60.0% (29.7%) 9.0% - 10.5% (9.2%)	Decrease Decrease
Interest-only strips	$	70		Discounted cash flow	Prepayment speed (CPR) Discount rate	19.7% - 38.8% (24.6%) 9.0%	Decrease Decrease
Commitments to extend credit on loans to be held for sale	$	1,797		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	98.6% –  105.1% (99.0%) of par 21.9% - 28.0% (27.5%)	Decrease   Decrease
Option contracts	$	33		Relative value analysis	Broker quotes	105.2% - 105.5% (105.2%) of par	Increase
Liabilities:
Commitments to extend credit on loans to be held for sale	$	12		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	100.3% –  103.3% (101.9%) of par 21.9% - 28.0% (27.5%)	Increase   Increase
Mandatory loan sale commitments	$	245		Relative value analysis	Investor quotes TBA MBS broker quotes  Roll-forward costs (4)	102.8% - 106.4% (104.0%) of par 102.0% - 108.5% (104.2%) of par 0.003%	Increase  Increase Increase

⁽¹⁾  The range is based on the estimated fair values and management estimates.

⁽²⁾  Unless otherwise noted, this column represents the directional change in the fair value of the Level 3 investments that would result from an increase to the corresponding unobservable input. A decrease to the unobservable input would have the opposite effect. Significant changes in these inputs in isolation could result in significantly higher or lower fair value measurements.

⁽³⁾  The percentage of commitments to extend credit on loans to be held for sale which management has estimated may not fund.

⁽⁴⁾  An estimated cost to roll forward the mandatory loan sale commitments which management has estimated may not be delivered to the corresponding investors in a timely manner.

Schedule of Carrying Amount and Fair Value of Financial Instruments

The carrying amount and fair value of the Corporation’s other financial instruments as of September 30, 2014 and June 30, 2014 were as follows:

	September 30, 2014
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Loans held for investment, net	$	788,958		$	795,408		—		—			$	795,408
FHLB – San Francisco stock	$	7,056		$	7,056		—		$	7,056		—
Financial liabilities:
Deposits	$	902,432		$	879,761		—		—			$	879,761
Borrowings	$	41,416		$	44,531		—		—			$	44,531

	June 30, 2014
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Loans held for investment, net	$	772,141		$	778,851		—		—			$	778,851
FHLB – San Francisco stock	$	7,056		$	7,056		—		$	7,056		—
Financial liabilities:
Deposits	$	897,870		$	875,440		—		—			$	875,440
Borrowings	$	41,431		$	44,424		—		—			$	44,424

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