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Fair Value of Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2024

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 September 30, 2024:
Loans held for investment, at fair value		$	1,082		$	1,190		$	(108)

As of June 30, 2024:
Loans held for investment, at fair value		$	1,047		$	1,200		$	(153)

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


		Fair Value Measurement at September 30, 2024 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS		$	—		$	1,185		$	—		$	1,185
U.S. government sponsored enterprise MBS			—			539			—			539
Private issue CMO			—			—			85			85
Investment securities - available for sale			—			1,724			85			1,809

Loans held for investment, at fair value			—			—			1,082			1,082
Other equity investments, fair value			—			565			—			565
Interest-only strips			—			—			6			6
Total assets		$	—		$	2,289		$	1,173		$	3,462

Liabilities:		$	—		$	—		$	—		$	—
Total liabilities		$	—		$	—		$	—		$	—


		Fair Value Measurement at June 30, 2024 Using:
(In Thousands)			Level 1			Level 2			Level 3			Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS		$	—		$	1,208		$	—		$	1,208
U.S. government sponsored enterprise MBS			—			553			—			553
Private issue CMO			—			—			88			88
Investment securities - available for sale			—			1,761			88			1,849

Loans held for investment, at fair value			—			—			1,047			1,047
Other equity investments, fair value			—			540			—			540
Interest-only strips			—			—			8			8
Total assets		$	—		$	2,301		$	1,143		$	3,444

Liabilities:		$	—		$	—		$	—		$	—
Total liabilities		$	—		$	—		$	—		$	—

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


		For the Quarter Ended September 30, 2024
		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, 2024		$	88		$	1,047		$	8		$	1,143
Total gains or losses (realized/unrealized):
Included in earnings			—			45			—			45
Included in other comprehensive income			2			—			(2)			—
Purchases			—			—			—			—
Issuances			—			—			—			—
Settlements			(5)			(10)			—			(15)
Transfers in and/or out of Level 3			—			—			—			—
Ending balance at September 30, 2024		$	85		$	1,082		$	6		$	1,173

(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 the interest rate characteristics of each loan.


		For the Quarter Ended September 30, 2023
		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, 2023		$	102		$	1,312		$	9		$	1,423
Adjustment due to ASC 326 CECL adoption			—			28			—			28
Total gains or losses (realized/unrealized):
Included in earnings			—			(52)			—			(52)
Included in other comprehensive loss			(1)			—			—			(1)
Purchases			—			—			—			—
Issuances			—			—			—			—
Settlements			(3)			(227)			—			(230)
Transfers in and/or out of Level 3			—			—			—			—
Ending balance at September 30, 2023		$	98		$	1,061		$	9		$	1,168

(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 the interest rate characteristics of each loan.

Schedule of fair value assets measured on nonrecurring basis


		Fair Value Measurement at September 30, 2024 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Loans with individually evaluated allowance		$	—		$	—		$	—		$	—
Mortgage servicing assets			—			—			101			101
Total		$	—		$	—		$	101		$	101


		Fair Value Measurement at June 30, 2024 Using:
(In Thousands)		Level 1			Level 2			Level 3			Total
Loans with individually evaluated allowance		$	—		$	—		$	695		$	695
Mortgage servicing assets			—			—			87			87
Total		$	—		$	—		$	782		$	782

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, which are measured at fair value and categorized within Level 3 as of September 30, 2024:


											Impact to
		Fair Value									Valuation
		As of									from an
		September 30,			Valuation				Range⁽¹⁾		Increase in
(Dollars In Thousands)		2024			Techniques		Unobservable Inputs		(Weighted Average)		Inputs⁽²⁾
Assets:
Securities available-for sale: Private issue CMO		$	85		Market comparable pricing		Comparability adjustment		0.4% - (3.6%) (0.4%)		Increase

Loans held for investment, at fair value		$	1,082		Relative value analysis		Broker quotes		90.3% - 92.8% (91.9%)		Increase
							ACL factors		0.8% - 1.1% (1.0%)		Decrease

Mortgage servicing assets		$	101		Discounted cash flow		Prepayment speed (CPR)		6.2% - 60.0% (14.9%)		Decrease
							Discount rate		9.0% - 10.5% (9.1%)		Decrease

Interest-only strips		$	6		Discounted cash flow		Prepayment speed (CPR)		11.2% - 25.7% (20.9%)		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 asset instruments 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.

Schedule of carrying amount and fair value of financial instruments


		September 30, 2024
		Carrying			Fair
(In Thousands)		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value		$	1,047,551		$	1,000,376		$	—		$	—		$	1,000,376
Investment securities - held to maturity		$	124,268		$	112,969		$	—		$	112,969		$	—
FHLB – San Francisco stock		$	9,568		$	9,568		$	—		$	9,568		$	—

Financial liabilities:
Deposits		$	863,864		$	864,774		$	—		$	864,774		$	—
Borrowings		$	249,500		$	250,401		$	—		$	250,401		$	—


		June 30, 2024
		Carrying			Fair
(In Thousands)		Amount			Value			Level 1			Level 2			Level 3
Financial assets:
Loans held for investment, not recorded at fair value		$	1,051,932		$	973,453		$	—		$	—		$	973,453
Investment securities - held to maturity		$	130,051		$	114,393		$	—		$	114,393		$	—
FHLB – San Francisco stock		$	9,568		$	9,568		$	—		$	9,568		$	—

Financial liabilities:
Deposits		$	888,348		$	888,527		$	—		$	888,527		$	—
Borrowings		$	238,500		$	237,691		$	—		$	237,691		$	—

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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