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Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2018

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, 2018:
Loans held for investment, at fair value	$	4,996		$	5,319		$	(323	)
Loans held for sale, at fair value	$	89,823		$	87,513		$	2,310
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 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, 2018 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—		$	4,656		$	—		$	4,656
U.S. government sponsored enterprise MBS	—			2,951			—			2,951
Private issue CMO	—			—			395			395
Investment securities - available for sale	—			7,607			395			8,002
Loans held for investment, at fair value	—			—			4,996			4,996
Loans held for sale, at fair value	—			89,823			—			89,823
Interest-only strips	—			—			24			24
Derivative assets:
Commitments to extend credit on loans to be held for sale	—			—			985			985
Derivative assets	—			—			985			985
Total assets	$	—		$	97,430		$	6,400		$	103,830
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale	$	—		$	—		$	3		$	3
Mandatory loan sale commitments	—			—			50			50
TBA MBS trades	—			436			—			436
Derivative liabilities	—			436			53			489
Total liabilities	$	—		$	436		$	53		$	489

	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 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, 2018
	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)			Total
Beginning balance at December 31, 2017	$	419		$	5,157		$	26		$	716		$	(24	)	$	6,294
Total gains or losses (realized/unrealized):
Included in earnings	—			(118		)	—			266			(26		)	122
Included in other comprehensive loss	(2		)	—			(2		)	—			—			(4		)
Purchases	—			—			—			—			—			—
Issuances	—			—			—			—			—			—
Settlements	(22		)	(43		)	—			—			—			(65		)
Transfers in and/or out of Level 3	—			—			—			—			—			—
Ending balance at March 31, 2018	$	395		$	4,996		$	24		$	982		$	(50	)	$	6,347

⁽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 March 31, 2017
	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 December 31, 2016	$	538		$	5,964		$	37		$	1,476		$	(280	)	$	—		$	7,735
Total gains or losses (realized/unrealized):
Included in earnings	—			(10		)	—			628			216			(11		)	823
Included in other   comprehensive income (loss)	—			—			(2		)	—			—			—			(2		)
Purchases	—			—			—			—			—			42			42
Issuances	—			—			—			—			—			—			—
Settlements	(37		)	(399		)	—			—			5			—			(431		)
Transfers in and/or out of Level 3	—			695			—			—			—			—			695
Ending balance at March 31, 2017	$	501		$	6,250		$	35		$	2,104		$	(59	)	$	31		$	8,862

⁽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 Nine Months Ended March 31, 2018
	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	—			(72		)	—			173			(99		)	(37		)	(35		)
Included in other comprehensive loss	(1		)	—			(7		)	—			—			—			(8		)
Purchases	—			—			—			—			—			—			—
Issuances	—			—			—			—			—			—			—
Settlements	(65		)	(1,899		)	—			—			2			—			(1,962		)
Transfers in and/or out of Level 3	—			522			—			—			—			—			522
Ending balance at March 31, 2018	$	395		$	4,996		$	24		$	982		$	(50	)	$	—		$	6,347

⁽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 Nine Months Ended March 31, 2017
	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	—			(111		)	—			(1,681		)	(39		)	333			(1,498		)
Included in other comprehensive   (loss) income	1			—			(12		)	—			—			—			(11		)
Purchases	—			—			—			—			—			180			180
Issuances	—			—			—			—			—			—			—
Settlements	(101		)	(1,077		)	—			—			11			(482		)	(1,649		)
Transfers in and/or out of Level 3	—			2,279			—			—			—			—			2,279
Ending balance at March 31, 2017	$	501		$	6,250		$	35		$	2,104		$	(59	)	$	31		$	8,862

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, 2018 Using:
(In Thousands)	Level 1			Level 2			Level 3			Total
Non-performing loans	$	—		$	5,695		$	1,071		$	6,766
MSA	—			—			139			139
Real estate owned, net	—			787			—			787
Total	$	—		$	6,482		$	1,210		$	7,692

	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
MSA	—			—			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 March 31, 2018:

(Dollars In Thousands)	Fair Value As of March 31, 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	$	395		Market comparable pricing	Comparability adjustment	0.5% – 1.0% (0.9%)	Increase
Loans held for investment,     at fair value	$	4,996		Relative value analysis	Broker quotes Credit risk factors	95.4% –  102.3% (98.5%) of par 1.2% - 100.0% (4.6%)	Increase Decrease
Non-performing loans	$	741		Discounted cash flow	Default rates	5.0%	Decrease
Non-performing loans	$	330		Relative value analysis	Loss severity	20.0% - 30.0% (23.3%)	Decrease
MSA	$	139		Discounted cash flow	Prepayment speed (CPR) Discount rate	8.0% - 60.0% (27.9%) 9.0% - 10.5% (9.4%)	Decrease Decrease
Interest-only strips	$	24		Discounted cash flow	Prepayment speed (CPR) Discount rate	15.6% - 32.8% (29.0%) 9.0%	Decrease Decrease
Commitments to extend credit on loans to be held for sale	$	985		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	98.3% –  103.9% (101.5%) of par 15.1% - 27.1% (26.3%)	Increase   Decrease
Liabilities:
Commitments to extend credit on loans to be held for sale	$	3		Relative value analysis	TBA-MBS broker quotes Fall-out ratio (3)	100.6% –  103.8% (102.4%) of par 15.1% - 27.1% (26.3%)	Increase   Decrease
Mandatory loan sale commitments	$	50		Relative value analysis	TBA MBS broker quotes  Roll-forward costs (4)	100.0% - 104.5% (101.7%) 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⁾  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 March 31, 2018 and June 30, 2017 was as follows:

	March 31, 2018
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Investment securities - held to maturity	$	95,724		$	94,941		—		$	94,941		$	—
Loans held for investment, not recorded at fair value	$	889,171		$	861,134		—		—			$	861,134
FHLB – San Francisco stock	$	8,108		$	8,108		—		$	8,108		—
Financial liabilities:
Deposits	$	922,499		$	887,824		—		—			$	887,824
Borrowings	$	111,176		$	109,498		—		—			$	109,498

	June 30, 2017
(In Thousands)	Carrying Amount			Fair Value			Level 1		Level 2			Level 3
Financial assets:
Investment securities - held to maturity	$	60,441		$	60,629		—		$	60,629		—
Loans held for investment, not recorded at fair value	$	898,474		$	885,650		—		—			$	885,650
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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