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Fair Value of Financial Instruments (Tables)

12 Months Ended

Jun. 30, 2021

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, 2021:	​	​	​	​	​	​	​	​	​
Loans held for investment, at fair value	​	$	1,874	​	$	1,934	​	$	(60)
​	​	​	​	​	​	​	​	​	​
As of June 30, 2020:	​			​			​
Loans held for investment, at fair value	​	$	2,258	​	$	2,369	​	$	(111)

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

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Fair Value Measurement at June 30, 2021 Using:

(In Thousands)

Level 1

Level 2

Level 3

Total

Assets:

​

​

​

​

​

​

​

​

​

​

​

​

Investment securities - available for sale:

​

​

​

​

​

​

​

​

​

​

​

​

U.S. government agency MBS

​

$

—

​

$

2,222

​

$

—

​

$

2,222

U.S. government sponsored enterprise MBS

​

—

​

1,211

​

—

​

1,211

Private issue CMO

​

—

​

—

​

154

​

154

Investment securities - available for sale

​

—

​

3,433

​

154

​

3,587

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans held for investment, at fair value

​

—

​

—

​

1,874

​

1,874

Interest-only strips

​

—

​

—

​

10

​

10

Total assets

​

$

—

​

$

3,433

​

$

2,038

​

$

5,471

​

​

​

​

​

​

​

​

​

​

​

​

​

Liabilities:

​

$

—

​

$

—

​

$

—

​

$

—

Total liabilities

​

$

—

​

$

—

​

$

—

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

​

$

—

​

$

—

​

$

—

​

$

—

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

​

Only

​

​

(In Thousands)

CMO

fair value(1)

Strips

Total

Beginning balance at June 30, 2020

​

$

197

​

$

2,258

​

$

14

​

$

2,469

Total gains or losses (realized/unrealized):

​

​

​

​

​

​

​

​

​

​

​

​

Included in earnings

​

—

​

51

​

—

​

51

Included in other comprehensive income (loss)

​

9

​

—

​

(4)

​

5

Purchases

​

—

​

—

​

—

​

—

Issuances

​

—

​

—

​

—

​

—

Settlements

​

(52)

​

(435)

​

—

​

(487)

Transfers in and/or out of Level 3

​

—

​

—

​

—

​

—

Ending balance at June 30, 2021

​

$

154

​

$

1,874

​

$

10

​

$

2,038

​

(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-

​

​

​

​

Issue

​

Investment, at

​

Only

​

​

(In Thousands)

CMO

fair 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.

​

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, 2021 Using:

(In Thousands)

Level 1

Level 2

Level 3

Total

Non-performing loans

​

$

—

​

$

899

​

$

7,747

​

$

8,646

Mortgage servicing assets

​

—

​

—

​

208

​

208

Total

​

$

—

​

$

899

​

$

7,955

​

$

8,854

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

Total

​

$

—

​

$

2,042

​

$

3,264

​

$

5,306

​

Schedule of fair value assets measured on nonrecurring basis

​

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, 2021:

​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	Impact to
​	​	Fair Value		​	​	​	​	​	​	​	Valuation
​	​	As of		​	​	​	​	​	​	​	from an
​	​	June 30,		​	Valuation	​	​	​	Range(1)	​	Increase in
(Dollars In Thousands)		2021			Techniques		Unobservable Inputs		(Weighted Average)		Inputs(2)
Assets:	​	​	​	​	​	​	​	​	​	​	​
Securities available-for sale: Private issue CMO	​	$	154		Market comparable pricing		Comparability adjustment		1.0% - 1.8% (1.7%)		Increase
​	​	​	​	​	​	​	​	​	​	​	​
Loans held for investment, at fair value	​	$	1,874		Relative value analysis		Broker quotes		98.0% - 104.0% (101.1%) of par		Increase
​	​	​	​	​	​	​	Credit risk factor		1.3% - 100.0% (4.3%)	​	Decrease
​	​	​	​	​	​	​	​	​	​	​	​
Non-performing loans(3)	​	$	6,767		Discounted cash flow		Default rates		5.0% - 8.8% (5.4%)	​	Decrease
​	​	​	​	​	​	​	​	​	​	​	​
Non-performing loans(4)	​	$	980		Relative value analysis		Credit risk factor		20.0% - 30.0% (28.3%)		Decrease
​	​	​	​	​	​	​	​	​	​	​	​
Mortgage servicing assets	​	$	208		Discounted cash flow		Prepayment speed (CPR)		16.4% - 60.0% (21.8%)		Decrease
​	​	​	​	​	​		Discount rate		9.0% - 10.5% (9.1%)		Decrease
​	​	​	​	​	​	​	​	​	​	​	​
Interest-only strips	​	$	10		Discounted cash flow		Prepayment speed (CPR)		20.1% - 23.0% (22.8%)	​	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, 2021 and 2020 were as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

June 30, 2021

​

​

Carrying

​

Fair

​

​

​

​

​

​

​

​

​

(In Thousands)

Amount

Value

Level 1

Level 2

Level 3

Financial assets:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Loans held for investment, not recorded at fair value

​

$

849,086

​

$

848,727

​

$

—

​

$

—

​

$

848,727

Investment securities - held to maturity

​

$

223,306

​

$

224,721

​

$

—

​

$

224,721

​

$

—

FHLB – San Francisco stock

​

$

8,155

​

$

8,155

​

$

—

​

$

8,155

​

$

—

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

Financial liabilities:

​

​

​

​

​

Deposits

​

$

937,973

​

$

904,673

​

$

—

​

$

—

​

$

904,673

Borrowings

​

$

100,983

​

$

104,526

​

$

—

​

$

—

​

$

104,526

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

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

​

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Tabular disclosure of input and valuation technique used to measure fair value and change in valuation approach and technique for each separate class of asset and liability measured on recurring and nonrecurring basis.

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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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