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Fair Value of Financial Instruments (Tables)

12 Months Ended

Jun. 30, 2020

Fair Value of Financial Instruments

Schedule of aggregate fair value and aggregate unpaid principal balance of loans held for sale

					Aggregate
					Unpaid			Net
		Aggregate			Principal			Unrealized
(In Thousands)		Fair Value			Balance			Loss
As of June 30, 2020:
Loans held for investment, at fair value		$	2,258		$	2,369		$	(111)
As of June 30, 2019:
Loans held for investment, at fair value		$	5,094		$	5,218		$	(124)

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

		Fair Value Measurement at June 30, 2020 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS		$	—		$	2,943		$	—		$	2,943
U.S. government sponsored enterprise MBS			—			1,577			—			1,577
Private issue CMO			—			—			197			197
Investment securities - available for sale			—			4,520			197			4,717
Loans held for investment, at fair value			—			—			2,258			2,258
Interest-only strips			—			—			14			14
Total assets		$	—		$	4,520		$	2,469		$	6,989
Liabilities:		$	—		$	—		$	—		$	—
Total liabilities		$	—		$	—		$	—		$	—

		Fair Value Measurement at June 30, 2019 Using:
(In Thousands)			Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS		$	—		$	3,613		$	—		$	3,613
U.S. government sponsored enterprise MBS			—			2,087			—			2,087
Private issue CMO			—			—			269			269
Investment securities - available for sale			—			5,700			269			5,969
Loans held for investment, at fair value			—			—			5,094			5,094
Interest-only strips			—			—			16			16
Total assets		$	—		$	5,700		$	5,379		$	11,079
Liabilities:		$	—		$	—		$	—		$	—
Total liabilities		$	—		$	—		$	—		$	—

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)
		Private			Loans Held For			Interest-
		Issue			Investment, at fair			Only
(In Thousands)		CMO			value(1)			Strips			Total
Beginning balance at June 30, 2019		$	269		$	5,094		$	16		$	5,379
Total gains or losses (realized/unrealized):
Included in earnings			—			13			—			13
Included in other comprehensive income (loss)			(14)			—			(2)			(16)
Purchases			—			—			—			—
Issuances			—			—			—			—
Settlements			(58)			(2,849)			—			(2,907)
Transfers in and/or out of Level 3			—			—			—			—
Ending balance at June 30, 2020		$	197		$	2,258		$	14		$	2,469

⁽¹⁾ The valuation of loans held for investment at fair value includes 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.

		Fair Value Measurement
		Using Significant Other Unobservable Inputs
		(Level 3)
		Private			Loans Held For			Interest-			Loan
		Issue			Investment, at fair			Only			Commit-ments to			Manda-tory
(In Thousands)		CMO			value(1)			Strips			Originate(2)			Commit-ments(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			—			188			—			(825)			19			(618)
Included in other comprehensive income (loss)			4			—			(7)			—			—			(3)
Purchases			—			—			—			—			—			—
Issuances			—			—			—			—			—			—
Settlements			(85)			(1,288)			—			—			13			(1,360)
Transfers in and/or out of Level 3			—			960			—			—			—			960
Ending balance at June 30, 2019		$	269		$	5,094		$	16		$	—		$	—		$	5,379

⁽¹⁾ The valuation of loans held for investment at fair value includes 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.

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, 2020 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Non-performing loans		$	—		$	2,042		$	2,882		$	4,924
Mortgage servicing assets			—			—			382			382
Real estate owned, net			—			—			—			—
Total		$	—		$	2,042		$	3,264		$	5,306

		Fair Value Measurement at June 30, 2019 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Non-performing loans		$	—		$	3,971		$	2,247		$	6,218
Mortgage servicing assets			—			—			627			627
Real estate owned, net			—			—			—			—
Total		$	—		$	3,971		$	2,874		$	6,845

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, 2020:

											Impact to
		Fair Value									Valuation
		As of									from an
		June 30,			Valuation				Range(1)		Increase in
(Dollars In Thousands)		2020			Techniques		Unobservable Inputs		(Weighted Average)		Inputs(2)
Assets:
Securities available-for sale: Private issue CMO		$	197		Market comparable pricing		Comparability adjustment		(3.2)% - (3.5)% ((3.3))%		Increase
Loans held for investment, at fair value		$	2,258		Relative value analysis		Broker quotes		98.0% - 106.1%  (101.5)% of par		Increase
							Credit risk factor		1.4% - 100.0%  (6.2)%		Decrease
Non-performing loans(3)		$	1,573		Discounted cash flow		Default rates		5.0%		Decrease
Non-performing loans(4)		$	1,309		Relative value analysis		Credit risk factor		20.0% - 30.0%  (20.1)%		Decrease
Mortgage servicing assets		$	382		Discounted cash flow		Prepayment speed (CPR)		18.3% - 60.0%  (26.1)%		Decrease
							Discount rate		9.0% - 10.5% (9.1)%		Decrease
Interest-only strips		$	14		Discounted cash flow		Prepayment speed (CPR)		18.3% - 24.2% (23.8)%		Decrease
							Discount rate		9.0%		Decrease
Liabilities:
None

⁽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⁾ Consist of restructured loans.

⁽⁴⁾ Consist of other non-performing loans, excluding restructured loans.

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, 2020 and 2019 were as follows:

	June 30, 2020
		Carrying			Fair
(In Thousands)		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value		$	900,538		$	902,074		$	—		$	—		$	902,074
Investment securities - held to maturity		$	118,627		$	121,201		$	—		$	121,201		$	—
FHLB – San Francisco stock		$	7,970		$	7,970		$	—		$	7,970		$	—
Financial liabilities:
Deposits		$	892,969		$	864,239		$	—		$	—		$	864,239
Borrowings		$	141,047		$	149,976		$	—		$	—		$	149,976

	June 30, 2019
		Carrying			Fair
(In Thousands)		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value		$	874,831		$	861,374		$	—		$	—		$	861,374
Investment securities - held to maturity		$	94,090		$	95,359		$	—		$	95,359		$	—
FHLB – San Francisco stock		$	8,199		$	8,199		$	—		$	8,199		$	—
Financial liabilities:
Deposits		$	841,271		$	813,087		$	—		$	—		$	813,087
Borrowings		$	101,107		$	102,826		$	—		$	—		$	102,826

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