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Fair Value of Financial Instruments (Tables)

12 Months Ended

Jun. 30, 2018

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 investment at fair value and loans held for sale at fair value:

(In Thousands)	Aggregate Fair Value			Aggregate Unpaid Principal Balance			Net Unrealized (Loss) Gain
As of June 30, 2018:
Loans held for investment, at fair value	$	5,234		$	5,546		$	(312	)
Loans held for sale, at fair value	$	96,298		$	93,791		$	2,507
As of June 30, 2017:
Loans held for investment, at fair value	$	6,445		$	6,696		$	(251	)
Loans held for sale, at fair value	$	116,548		$	112,940		$	3,608

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

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

	Fair Value Measurement at June 30, 2018 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	4,384		$	—		$	4,384
U.S. government sponsored enterprise MBS	—			2,762			—			2,762
Private issue CMO	—			—			350			350
Investment securities - available for sale	—			7,146			350			7,496
Loans held for investment, at fair value	—			—			5,234			5,234
Loans held for sale, at fair value	—			96,298			—			96,298
Interest-only strips	—			—			23			23
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			849			849
Derivative assets	—			—			849			849
Total assets	$	—		$	103,444		$	6,456		$	109,900
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	24		$	24
Mandatory loan sale commitments	—			—			32			32
TBA MBS trades	—			408			—			408
Derivative liabilities	—			408			56			464
Total liabilities	$	—		$	408		$	56		$	464

	Fair Value Measurement at June 30, 2017 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	5,383		$	—		$	5,383
U.S. government sponsored enterprise MBS	—			3,474			—			3,474
Private issue CMO	—			—			461			461
Investment securities - available for sale	—			8,857			461			9,318
Loans held for investment, at fair value	—			—			6,445			6,445
Loans held for sale, at fair value	—			116,548			—			116,548
Interest-only strips	—			—			31			31
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			847			847
Mandatory loan sale commitments	—			—			47			47
TBA MBS trades	—			539			—			539
Option contracts	—			—			37			37
Derivative assets	—			539			931			1,470
Total assets	$	—		$	125,944		$	7,868		$	133,812
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	38		$	38
Derivative liabilities	—			—			38			38
Total liabilities	$	—		$	—		$	38		$	38

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

The following is a reconciliation of the beginning and ending balances during the periods shown of recurring fair value measurements recognized in the Consolidated Statements of Financial Condition using Level 3 inputs:

	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, 2017	$	461		$	6,445		$	31		$	809		$	47		$	37		$	7,830
Total gains or losses (realized/   unrealized):
Included in earnings	—			(60		)	—			16			(87		)	(37		)	(168		)
Included in other comprehensive   income	(1		)	—			(8		)	—			—			—			(9		)
Purchases	—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—
Settlements	(110		)	(2,242		)	—			—			8			—			(2,344		)
Transfers in and/or out of Level 3	—			1,091			—			—			—			—			1,091
Ending balance at June 30, 2018	$	350		$	5,234		$	23		$	825		$	(32	)	$	—		$	6,400

⁽¹⁾  The valuation of loans held for investment at fair value includes the management estimates of the specific credit risk attributes of each loan, 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.

	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	—			(86		)	—			(2,976		)	66			260			(2,736		)
Included in other comprehensive   income	2			—			(16		)	—			—			—			(14		)
Purchases	—			—			—			—			—			284			284
Issuances	—			—			—			—			—			—			—
Settlements	(142		)	(1,135		)	—			—			12			(507		)	(1,772		)
Transfers in and/or out of Level 3	—			2,507			—			—			—			—			2,507
Ending balance at June 30, 2017	$	461		$	6,445		$	31		$	809		$	47		$	37		$	7,830

⁽¹⁾  The valuation of loans held for investment at fair value includes the management estimates of specific credit risk attributes of each loan, 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.

Schedule of Fair Value Assets Measured on Nonrecurring Basis

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

	Fair Value Measurement at June 30, 2018 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	4,845		$	1,212		$	6,057
Mortgage servicing assets	—			—			135			135
Real estate owned, net	—			906			—			906
Total	$	—		$	5,751		$	1,347		$	7,098

	Fair Value Measurement at June 30, 2017 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	7,049		$	946		$	7,995
Mortgage servicing assets	—			—			407			407
Real estate owned, net	—			1,615			—			1,615
Total	$	—		$	8,664		$	1,353		$	10,017

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 June 30, 2018:

(Dollars In Thousands)	Fair Value As of June 30, 2018			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	$	350		Market comparable pricing	Comparability adjustment	1.0% - 1.2% (1.1%)	Increase
Loans held for investment, at fair value	$	5,234		Relative value analysis	Broker quotes Credit risk factor	94.9% - 104.2% (99.0%) of par 1.2% - 100.0% (4.6%)	Increase Decrease
Non-performing loans	$	742		Discounted cash flow	Default rates	5.0%	Decrease
Non-performing loans	$	470		Relative value analysis	Loss severity	20.0% - 30.0% (22.4%)	Decrease
Mortgage servicing assets	$	135		Discounted cash flow	Prepayment speed (CPR) Discount rate	7.6% - 60.0% (28.2%) 9.0% - 10.5% (9.4%)	Decrease Decrease
Interest-only strips	$	23		Discounted cash flow	Prepayment speed (CPR) Discount rate	15.6% - 34.4% (29.3%) 9.0%	Decrease Decrease
Commitments to extend credit on loans to be held for sale	$	849		Relative value analysis	TBA MBS broker quotes Fall-out ratio(3)	98.3% –  104.6% (101.5%) of par 19.0% - 25.8% (24.7%)	Increase   Decrease
Liabilities:
Commitments to extend credit on loans to be held for sale	$	24		Relative value analysis	TBA MBS broker quotes Fall-out ratio(3)	100.0% – 103.3% (102.0%) of par 19.0% - 25.8% (24.7%)	Decrease   Decrease
Mandatory loan sale commitments	$	32		Relative value analysis	TBA MBS broker quotes Roll-forward costs(4)	99.3% - 104.9% (101.8%) of par 0.0221%	Increase Increase

⁽¹⁾  The range is based on the historical 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 June 30, 2018 and 2017 were as follows:

	June 30, 2018
(In Thousands)	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value	$	897,451		$	873,112		$	—		$	—		$	873,112
Investment securities - held to maturity	$	87,813		$	87,239		$	—		$	87,239		$	—
FHLB – San Francisco stock	$	8,199		$	8,199		$	—		$	8,199		$	—
Financial liabilities:
Deposits	$	907,598		$	877,641		$	—		$	—		$	877,641
Borrowings	$	126,163		$	123,778		$	—		$	—		$	123,778

	June 30, 2017
(In Thousands)	Carrying Amount			Fair Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value	$	898,474		$	885,650		$	—		$	—		$	885,650
Investment securities - held to maturity	$	60,441		$	60,629		$	—		$	60,629		$	—
FHLB – San Francisco stock	$	8,108		$	8,108		$	—		$	8,108		$	—
Financial liabilities:
Deposits	$	926,521		$	896,140		$	—		$	—		$	896,140
Borrowings	$	126,226		$	126,083		$	—		$	—		$	126,083

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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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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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