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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 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 September 30, 2018:
Loans held for investment, at fair value		$	4,945			$	5,306			$	(361	)
Loans held for sale, at fair value		$	78,794			$	77,126			$	1,668
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

Schedule of fair value, assets and liabilities measured on recurring basis

		Fair Value Measurement at September 30, 2018 Using:
(In Thousands)		Level 1				Level 2				Level 3				Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS		$	—			$	4,156			$	—			$	4,156
U.S. government sponsored enterprise MBS			—				2,561				—				2,561
Private issue CMO			—				—				316				316
Investment securities - available for sale			—				6,717				316				7,033
Loans held for investment, at fair value			—				—				4,945				4,945
Loans held for sale, at fair value			—				78,794				—				78,794
Interest-only strips			—				—				24				24
Derivative assets:
Commitments to extend credit on loans to be held for sale			—				—				516				516
Mandatory loan sale commitments			—				—				1				1
TBA MBS trades			—				248				—				248
Derivative assets			—				248				517				765
Total assets		$	—			$	85,759			$	5,802			$	91,561
Liabilities:
Derivative liabilities:
Commitments to extend credit on loans to be held for sale		$	—			$	—			$	20			$	20
Mandatory loan sale commitments			—				—				10				10
Derivative liabilities			—				—				30				30
Total liabilities		$	—			$	—			$	30			$	30

		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

Schedule for reconciliation of recurring fair value measurements using level 3 inputs

		For the Quarter Ended September 30, 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 Commitments to Originate (2)				Mandatory Commitments (3)				Total
Beginning balance at June 30, 2018		$	350			$	5,234			$	23			$	825			$	(32	)		$	6,400
Total gains or losses (realized/unrealized):
Included in earnings			—				(49	)			—				(329	)			22				(356	)
Included in other comprehensive loss			—				—				1				—				—				1
Purchases			—				—				—				—				—				—
Issuances			—				—				—				—				—				—
Settlements			(34	)			(710	)			—				—				1				(743	)
Transfers in and/or out of Level 3			—				470				—				—				—				470
Ending balance at September 30, 2018		$	316			$	4,945			$	24			$	496			$	(9	)		$	5,772

⁽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 the interest rate characteristics of each loan.

⁽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, 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, 2017		$	461			$	6,445			$	31			$	809			$	47			$	37			$	7,830
Total gains or losses (realized/unrealized):
Included in earnings			—				8				—				(122	)			(53	)			(37	)			(204	)
Included in other comprehensive income			1				—				(3	)			—				—				—				(2	)
Purchases			—				—				—				—				—				—				—
Issuances			—				—				—				—				—				—				—
Settlements			(14	)			(51	)			—				—				2				—				(63	)
Transfers in and/or out of Level 3			—				522				—				—				—				—				522
Ending balance at September 30, 2017		$	448			$	6,924			$	28			$	687			$	(4	)		$	—			$	8,083

⁽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 the interest rate characteristics of each loan.

⁽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

		Fair Value Measurement at September 30, 2018 Using:
(In Thousands)		Level 1				Level 2				Level 3				Total
Non-performing loans		$	—			$	4,893			$	1,969			$	6,862
Mortgage servicing assets			—				—				125				125
Real estate owned, net			—				524				—				524
Total		$	—			$	5,417			$	2,094			$	7,511

		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

Schedule of additional information about valuation techniques and inputs used for assets and liabilities

(Dollars In Thousands)

Fair Value As of  September 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

$

316

Market comparable pricing

Comparability adjustment

1.1% – 1.3% (1.1%)

Increase

Loans held for investment, at fair value

$

4,945

Relative value analysis

Broker quotes Credit risk factors

95.4% – 103.5% (98.4%) of par  1.2% - 100.0% (5.2%)

Increase   Decrease

Non-performing loans

$

735

Discounted cash flow

Default rates

5.0%

Decrease

Non-performing loans

$

1,234

Relative value analysis

Loss severity

20.0% - 30.0% (22.5%)

Decrease

Mortgage servicing assets

$

125

Discounted cash flow

Prepayment speed (CPR)  Discount rate

7.6% - 60.0% (27.0%) 9.0% - 10.5% (9.4%)

Decrease Decrease

Interest-only strips

$

24

Discounted cash flow

Prepayment speed (CPR)  Discount rate

12.2% - 25.8% (24.1%) 9.0%

Decrease Decrease

Commitments to extend credit on loans to be held for sale

$

516

Relative value analysis

TBA-MBS broker quotes Fall-out ratio (3)

97.3% – 104.6% (101.4%) of par  19.2% - 23.5% (22.6%)

Increase    Decrease

Mandatory loan sale commitments

$

1

Relative value analysis

TBA MBS broker quotes Roll-forward costs (4)

99.1% of par 0.029%

Decrease Decrease

Liabilities:

Commitments to extend credit on loans to be held for sale

$

20

Relative value analysis

TBA-MBS broker quotes Fall-out ratio (3)

101.3% – 103.5%   (101.3%) of par  19.2% - 23.5% (22.6%)

Decrease    Decrease

Mandatory loan sale commitments

$

10

Relative value analysis

TBA MBS broker quotes Roll-forward costs (4)

98.8% - 104.4%   (101.9%) of par  0.029%

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

		September 30, 2018
(In Thousands)		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial assets:
Investment securities - held to maturity		$	79,611			$	78,974				—			$	78,974			$	—
Loans held for investment, not recorded at fair value		$	872,146			$	842,453				—				—			$	842,453
FHLB – San Francisco stock		$	8,199			$	8,199				—			$	8,199				—
Financial liabilities:
Deposits		$	902,112			$	872,546				—				—			$	872,546
Borrowings		$	111,149			$	108,367				—				—			$	108,367

		June 30, 2018
(In Thousands)		Carrying Amount				Fair Value				Level 1				Level 2				Level 3
Financial assets:
Investment securities - held to maturity		$	87,813			$	87,239				—			$	87,239				—
Loans held for investment, not recorded at fair value		$	897,451			$	873,112				—				—			$	873,112
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

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Tabular disclosure of assets and liabilities by class, including financial instruments measured at fair value that are classified in shareholders' equity, if any, that are measured at fair value on a nonrecurring basis in periods after initial recognition (for example, impaired assets). Disclosures may include, but are not limited to: (a) the fair value measurements recorded and the reasons for the measurements and (b) the level within the fair value hierarchy in which the fair value measurements are categorized in their entirety (levels 1, 2, 3).

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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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