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Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

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

(In Thousands)	Aggregate Fair Value			Aggregate Unpaid Principal Balance			Net Unrealized (Loss) Gain
As of March 31, 2016:
Loans held for investment, at fair value	$	4,583		$	4,708		$	(125	)
Loans held for sale, at fair value	$	184,025		$	177,088		$	6,937
As of June 30, 2015:
Loans held for investment, at fair value	$	4,518		$	4,495		$	23
Loans held for sale, at fair value	$	224,715		$	219,143		$	5,572

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 March 31, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	6,947		$	—		$	6,947
U.S. government sponsored enterprise MBS	—			4,450			—			4,450
Private issue CMO	—			—			617			617
Common stock - community development financial institution	—			147			—			147
Investment securities - available for sale	—			11,544			617			12,161
Loans held for investment, at fair value	—			—			4,583			4,583
Loans held for sale, at fair value	—			184,025			—			184,025
Interest-only strips	—			—			50			50
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			3,037			3,037
Option contracts	—			—			24			24
Derivative assets	—			—			3,061			3,061
Total assets	$	—		$	195,569		$	8,311		$	203,880
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	1		$	1
Mandatory loan sale commitments	—			—			125			125
TBA MBS trades	—			1,665			—			1,665
Derivative liabilities	—			1,665			126			1,791
Total liabilities	$	—		$	1,665		$	126		$	1,791

	Fair Value Measurement at June 30, 2015 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	7,906		$	—		$	7,906
U.S. government sponsored enterprise MBS	—			5,387			—			5,387
Private issue CMO	—			—			717			717
Common stock - community development financial institution	—			—			151			151
Investment securities - available for sale	—			13,293			868			14,161
Loans held for investment, at fair value	—			4,518			—			4,518
Loans held for sale, at fair value	—			224,715			—			224,715
Interest-only strips	—			—			63			63
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			1,636			1,636
TBA MBS trades	—			812			—			812
Option contracts	—			—			192			192
Derivative assets	—			812			1,828			2,640
Total assets	$	—		$	243,338		$	2,759		$	246,097
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	137		$	137
Mandatory loan sale commitments	—			—			71			71
Derivative liabilities	—			—			208			208
Total liabilities	$	—		$	—		$	208		$	208

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 March 31, 2016
	Fair Value Measurement Using Significant Other Unobservable Inputs (Level 3)
(In Thousands)	Private Issue CMO			Common stock (1)			Loans Held For Investment, at fair value (2)			Interest- Only Strips			Loan Commit- ments to Originate (3)			Manda- tory Commit- ments (4)			Option Contracts			Total
Beginning balance at December 31,    2015	$	654		$	143		$	4,210		$	54		$	1,170		$	(51	)	$	24		$	6,204
Total gains or losses (realized/   unrealized):
Included in earnings	—			—			59			—			1,866			(105		)	85			1,905
Included in other  comprehensive income (loss)	(5		)	4			—			(4		)	—			—			—			(5		)
Purchases	—			—			—			—			—			—			82			82
Issuances	—			—			—			—			—			—			—			—
Settlements	(32		)	—			(1,165		)	—			—			31			(167		)	(1,333		)
Transfers in and/or out of Level 3	—			(147		)	1,479			—			—			—			—			1,332
Ending balance at March 31, 2016	$	617		$	—		$	4,583		$	50		$	3,036		$	(125	)	$	24		$	8,185

⁽¹⁾  Common stock of a community development financial institution.

⁽²⁾  The valuation of loans held for investment at fair value includes the management estimates of the specific credit risk attributes of each loan (Level 3), in addition to the quoted secondary-market prices which account for interest rate characteristics.

⁽³⁾  Consists of commitments to extend credit on loans to be held for sale.

⁽⁴⁾  Consists of mandatory loan sale commitments.

	For the Quarter Ended March 31, 2015
	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 December 31, 2014	$	799		$	250		$	64		$	2,129		$	(86	)	$	110		$	3,266
Total gains or losses (realized/unrealized):
Included in earnings	—			—			—			2,174			(296		)	(31		)	1,847
Included in other comprehensive   (loss) income	(2		)	—			(1		)	—			—			—			(3		)
Purchases	—			—			—			—			—			368			368
Issuances	—			—			—			—			—			—			—
Settlements	(21		)	—			—			—			20			(210		)	(211		)
Transfers in and/or out of Level 3	—			—			—			—			—			—			—
Ending balance at March 31, 2015	$	776		$	250		$	63		$	4,303		$	(362	)	$	237		$	5,267

⁽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 Nine Months Ended March 31, 2016
	Fair Value Measurement Using Significant Other Unobservable Inputs (Level 3)
(In Thousands)	Private Issue CMO			Common stock (1)			Loans Held For Investment, at fair value (2)			Interest- Only Strips			Loan Commit- ments to Originate (3)			Manda- tory Commit- ments (4)			Option Contracts			Total
Beginning balance at June 30, 2015	$	717		$	151		$	—		$	63		$	1,499		$	(71	)	$	192		$	2,551
Total gains or losses (realized/unrealized):
Included in earnings	—			—			(149		)	—			1,537			(101		)	(87		)	1,200
Included in other comprehensive loss	(7		)	(4		)	—			(13		)	—			—			—			(24		)
Purchases	—			—			—			—			—			—			222			222
Issuances	—			—			—			—			—			—			—			—
Settlements	(93		)	—			(1,816		)	—			—			47			(303		)	(2,165		)
Transfers in and/or out of Level 3	—			(147		)	6,548			—			—			—			—			6,401
Ending balance at March 31, 2016	$	617		$	—		$	4,583		$	50		$	3,036		$	(125	)	$	24		$	8,185

⁽¹⁾  Common stock of a community development financial institution.

⁽²⁾  The valuation of loans held for investment at fair value includes the management estimates of the specific credit risk attributes of each loan (Level 3), in addition to the quoted secondary-market prices which account for interest rate characteristics.

⁽³⁾  Consists of commitments to extend credit on loans to be held for sale.

⁽⁴⁾  Consists of mandatory loan sale commitments.

	For the Nine Months Ended March 31, 2015
	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	—			—			—			1,737			(303		)	(193		)	1,241
Included in other comprehensive   (loss) income	(7		)	—			1			—			—			—			(6		)
Purchases	—			250			—			—			—			689			939
Issuances	—			—			—			—			—			—			—
Settlements	(70		)	—			—			—			34			(259		)	(295		)
Transfers in and/or out of Level 3	—			—			—			—			—			—			—
Ending balance at March 31, 2015	$	776		$	250		$	63		$	4,303		$	(362	)	$	237		$	5,267

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 March 31, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	9,571		$	2,690		$	12,261
MSA	—			—			444			444
Real estate owned, net	—			3,165			—			3,165
Total	$	—		$	12,736		$	3,134		$	15,870

	Fair Value Measurement at June 30, 2015 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	11,816		$	2,130		$	13,946
MSA	—			—			269			269
Real estate owned, net	—			2,398			—			2,398
Total	$	—		$	14,214		$	2,399		$	16,613

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 March 31, 2016:

(Dollars In Thousands)	Fair Value As of March 31, 2016			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	$	617		Market comparable pricing	Comparability adjustment	(0.9)% – 0.6% (0.3%)	Increase
Loans held for investment,     at fair value	$	4,583		Relative value analysis	Broker quotes Credit risk factors	100.0% –  106.7% (104.0%) of par 1.2% - 100.0% (6.5%)	Increase Decrease
Non-performing loans	$	78		Discounted cash flow	Default rates	5.0%	Decrease
Non-performing loans	$	2,612		Relative value analysis	Loss severity	20.0% - 45.0% (24.9%)	Decrease
MSA	$	444		Discounted cash flow	Prepayment speed (CPR) Discount rate	14.1% - 60.0% (19.4%) 9.0% - 10.5% (9.1%)	Decrease Decrease
Interest-only strips	$	50		Discounted cash flow	Prepayment speed (CPR) Discount rate	17.6% - 23.7% (18.2%) 9.0%	Decrease Decrease
Commitments to extend credit on loans to be held for sale	$	3,037		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (4)	98.6% –  105.4% (102.3%) of par 18.4% - 32.2% (31.3%)	Increase   Decrease
Option contracts	$	24		Relative value analysis	Broker quotes	130.4% of par	Increase
Liabilities:
Commitments to extend credit on loans to be held for sale	$	1		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (4)	104.0% –  104.6% (104.3%) of par 18.4% - 32.2% (31.3%)	Increase   Decrease
Mandatory loan sale commitments	$	125		Relative value analysis	TBA MBS broker quotes  Roll-forward costs (5)	102.3% - 106.8% (104.5%) of par 0.021%	Decrease    Decrease

⁽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⁾  Common stock of a community development financial institution.

⁽⁴⁾  The percentage of commitments to extend credit on loans to be held for sale which management has estimated may not fund.

⁽⁵⁾  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 March 31, 2016 and June 30, 2015 was as follows:

	March 31, 2016
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Investment securities - held to maturity	$	21,014		$	21,163		—		$	21,163		$	—
Loans held for investment, not recorded at fair value	$	800,984		$	807,288		—		—			$	807,288
FHLB – San Francisco stock	$	8,094		$	8,094		—		$	8,094		—
Financial liabilities:
Deposits	$	927,065		$	895,760		—		—			$	895,760
Borrowings	$	91,317		$	94,671		—		—			$	94,671

	June 30, 2015
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value	$	809,716		$	815,385		—		—			$	815,385
FHLB – San Francisco stock	$	8,094		$	8,094		—		$	8,094		—
Financial liabilities:
Deposits	$	924,086		$	895,664		—		—			$	895,664
Borrowings	$	91,367		$	93,219		—		—			$	93,219

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Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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