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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 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 September 30, 2016:
Loans held for investment, at fair value	$	5,529		$	5,657		$	(128	)
Loans held for sale, at fair value	$	264,379		$	254,779		$	9,600
As of June 30, 2016:
Loans held for investment, at fair value	$	5,159		$	5,324		$	(165	)
Loans held for sale, at fair value	$	189,458		$	181,380		$	8,078

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, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	6,131		$	—		$	6,131
U.S. government sponsored enterprise MBS	—			4,087			—			4,087
Private issue CMO	—			—			560			560
Investment securities - available for sale	—			10,218			560			10,778
Loans held for investment, at fair value	—			—			5,529			5,529
Loans held for sale, at fair value	—			264,379			—			264,379
Interest-only strips	—			—			42			42
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			2,598			2,598
Mandatory loan sale commitments	—			—			30			30
Option contracts	—			—			22			22
Derivative assets	—			—			2,650			2,650
Total assets	$	—		$	274,597		$	8,781		$	283,378
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	24		$	24
Mandatory loan sale commitments	—			—			54			54
TBA MBS trades	—			1,375			—			1,375
Derivative liabilities	—			1,375			78			1,453
Total liabilities	$	—		$	1,375		$	78		$	1,453

	Fair Value Measurement at June 30, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	6,572		$	—		$	6,572
U.S. government sponsored enterprise MBS	—			4,223			—			4,223
Private issue CMO	—			—			601			601
Common stock - community development financial institution	—			147			—			147
Investment securities - available for sale	—			10,942			601			11,543
Loans held for investment, at fair value	—			—			5,159			5,159
Loans held for sale, at fair value	—			189,458			—			189,458
Interest-only strips	—			—			47			47
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			3,788			3,788
Derivative assets	—			—			3,788			3,788
Total assets	$	—		$	200,400		$	9,595		$	209,995
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	3		$	3
Mandatory loan sale commitments	—			—			31			31
TBA MBS trades	—			3,165			—			3,165
Derivative liabilities	—			3,165			34			3,199
Total liabilities	$	—		$	3,165		$	34		$	3,199

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, 2016
	Fair Value Measurement Using Significant Other Unobservable Inputs (Level 3)
(In Thousands)	Private Issue CMO			Loans Held For Investment, at fair value (1)			Interest- Only Strips			Loan Commit- ments to Originate (2)			Manda- tory Commit- ments (3)			Option Contracts			Total
Beginning balance at June 30, 2016	$	601		$	5,159		$	47		$	3,785		$	(31	)	$	—		$	9,561
Total gains or losses (realized/unrealized):
Included in earnings	—			38			—			(1,211		)	(5		)	(22		)	(1,200		)
Included in other comprehensive  income (loss)	1			—			(5		)	—			—			—			(4		)
Purchases	—			—			—			—			—			44			44
Issuances	—			—			—			—			—			—			—
Settlements	(42		)	(428		)	—			—			12			—			(458		)
Transfers in and/or out of Level 3	—			760			—			—			—			—			760
Ending balance at September 30, 2016	$	560		$	5,529		$	42		$	2,574		$	(24	)	$	22		$	8,703

⁽¹⁾  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.

⁽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, 2015
	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	—			—			(155		)	—			1,005			(96		)	(88		)	666
Included in other   comprehensive (loss) income	(1		)	—			—			(3		)	—			—			—			(4		)
Purchases	—			—			—			—			—			—			89			89
Issuances	—			—			—			—			—			—			—			—
Settlements	(25		)	—			(638		)	—			—			17			(136		)	(782		)
Transfers in and/or out of Level 3	—			—			4,829			—			—			—			—			4,829
Ending balance at September 30, 2015	$	691		$	151		$	4,036		$	60		$	2,504		$	(150	)	$	57		$	7,349

⁽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.

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, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	7,012		$	3,001		$	10,013
MSA	—			—			588			588
Real estate owned, net	—			3,496			—			3,496
Total	$	—		$	10,508		$	3,589		$	14,097

	Fair Value Measurement at June 30, 2016 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	7,350		$	2,959		$	10,309
MSA	—			—			627			627
Real estate owned, net	—			2,706			—			2,706
Total	$	—		$	10,056		$	3,586		$	13,642

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, 2016:

(Dollars In Thousands)	Fair Value As of September 30, 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	$	560		Market comparable pricing	Comparability adjustment	0% – 0.9% (0.7%)	Increase
Loans held for investment,     at fair value	$	5,529		Relative value analysis	Broker quotes Credit risk factors	100.0% –  107.1% (103.8%) of par 1.2% - 100.0% (5.9%)	Increase Decrease
Non-performing loans	$	74		Discounted cash flow	Default rates	5.0%	Decrease
Non-performing loans	$	2,927		Relative value analysis	Loss severity	20.0% - 45.0% (22.9%)	Decrease
MSA	$	588		Discounted cash flow	Prepayment speed (CPR) Discount rate	13.4% - 60.0% (19.7%) 9.0% - 10.5% (9.1%)	Decrease Decrease
Interest-only strips	$	42		Discounted cash flow	Prepayment speed (CPR) Discount rate	15.8% - 21.3% (20.5%) 9.0%	Decrease Decrease
Commitments to extend credit on loans to be held for sale	$	2,598		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	98.9% –  105.0% (102.2%) of par 20.2% - 33.5% (32.6%)	Increase   Decrease
Mandatory loan sale commitments	$	30		Relative value analysis	TBA MBS broker quotes Roll-forward costs (4)	104.8% - 106.2% (104.9%) of par 0.006%	Decrease    Decrease
Option contracts	$	22		Relative value analysis	Broker quotes	131.1% of par	Increase
Liabilities:
Commitments to extend credit on loans to be held for sale	$	24		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	100.4% –  103.0% (100.7%) of par 20.2% - 33.5% (32.6%)	Increase   Decrease
Mandatory loan sale commitments	$	54		Relative value analysis	TBA MBS broker quotes  Roll-forward costs (4)	100.7% - 107.1% (104.2%) of par 0.006%	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⁾  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, 2016 and June 30, 2016 was as follows:

	September 30, 2016
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Investment securities - held to maturity	$	36,290		$	36,749		—		$	36,749		$	—
Loans held for investment, not recorded at fair value	$	848,429		$	854,095		—		—			$	854,095
FHLB – San Francisco stock	$	8,094		$	8,094		—		$	8,094		—
Financial liabilities:
Deposits	$	943,502		$	910,815		—		—			$	910,815
Borrowings	$	146,281		$	149,528		—		—			$	149,528

	June 30, 2016
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Investment securities - held to maturity	$	39,979		$	40,438		—		$	40,438		—
Loans held for investment, not recorded at fair value	$	834,863		$	844,124		—		—			$	844,124
FHLB – San Francisco stock	$	8,094		$	8,094		—		$	8,094		—
Financial liabilities:
Deposits	$	926,384		$	896,033		—		—			$	896,033
Borrowings	$	91,299		$	95,898		—		—			$	95,898

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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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