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Disclosures About Fair Value of Assets
 3 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Disclosures About Fair Value of Assets
Note 13: Disclosures About Fair Value of Assets
Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs. There is a hierarchy of three levels of inputs that may be used to measure fair value:
 
  Level 1
Quoted prices in active markets for identical assets
 
  Level 2
Observable inputs other than Level 1 prices, such as quoted prices for similar assets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets
 
  Level 3
Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets
 
Recurring Measurements
The following table presents the fair value measurements of assets recognized in the accompanying condensed consolidated balance sheets measured at fair value on a recurring basis and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2024 and June 30, 2024:
 
           
Fair Value Measurements Using
  
    
Fair Value
     
Quoted
Prices in
Active
Markets for
Identical
Assets

(Level 1)
     
Significant
Other
Observable
Inputs

(Level 2)
     
Significant
Unobservable
Inputs

(Level 3)
  
September 30, 2024:
            
Available-for-sale
securities:
            
U.S. Government and federal agency and Government sponsored enterprises (GSE’s)
    $ 5,763      $ —       $ 5,763      $ —   
Mortgage-backed: GSE residential
      169,638        —         169,638        —   
Small Business Administration
      14,152        —         14,152        —   
State and political subdivisions
      3,098        —         1,041        2,057  
Mortgage servicing rights
      1,366        —         —         1,366  
           
Fair Value Measurements Using
  
    
Fair Value
     
Quoted
Prices in
Active
Markets for
Identical
Assets

(Level 1)
     
Significant
Other
Observable
Inputs

(Level 2)
     
Significant
Unobservable
Inputs

(Level 3)
  
June 30, 2024:
            
Available-for-sale
securities:
            
U.S. Treasury
    $ 444      $ 444      $ —       $ —   
U.S. Government and federal agency and Government sponsored enterprises (GSE’s)
      6,609        —         6,609        —   
Mortgage-backed: GSE residential
      166,236        —         166,236        —   
Small Business Administration
      14,086        —         14,086        —   
State and political subdivisions
      3,100        —         1,043        2,057  
Mortgage servicing rights
      1,491        —         —         1,491  
Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a recurring basis and recognized in the accompanying condensed consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy. There have been no significant changes in the valuation techniques during the period ended September 30, 2024. For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.
Available-for-sale
Securities
Where quoted market prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated by using pricing models, quoted prices of securities with similar characteristics or discounted cash flows. For these investments, the inputs used by the pricing
 
service to determine fair value may include one, or a combination of, observable inputs such as benchmark yields, reported trades, broker/dealer quotes, issuer spreads,
two-sided
markets, benchmark securities, bid, offers and reference data market research publications and are classified within Level 2 of the valuation hierarchy. Level 2 securities include U.S. Treasury, U.S. Government and federal agency, mortgage-backed securities (GSE—residential), Small Business Administration and state and political subdivisions. In certain cases where Level 1 or Level 2 inputs are not available, securities are classified within Level 3 of the hierarchy.
Mortgage Servicing Rights
Mortgage servicing rights do not trade in an active, open market with readily observable prices. Accordingly, fair value is estimated using discounted cash flow models. Due to the nature of the valuation inputs, mortgage servicing rights are classified within Level 3 of the hierarchy.
Level 3 Reconciliation
The following is a reconciliation of the beginning and ending balances of recurring fair value measurements recognized in the accompanying balance sheet using significant unobservable (Level 3) inputs:
 
    
Three months ended September 30, 2024
  
    
Obligations of
State and
Political
Subdivisions
     
 Mortgage 
Servicing
Rights
     
Total
  
Beginning balance
    $ 2,057      $ 1,491      $ 3,548  
Transfers into Level 3
      —         47        47  
Transfers out of Level 3
      —         (34 )       (34 ) 
Total realized and unrealized gains and losses included in net income
      —         (138 )       (138 ) 
Purchases
      —         —         —   
Sales
      —         —         —   
Settlements
      —         —         —   
  
 
 
     
 
 
     
 
 
  
Ending balance
    $ 2,057      $ 1,366      $ 3,423  
  
 
 
     
 
 
     
 
 
  
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date
    $ —       $ (138 )     $ (138 ) 
  
 
 
     
 
 
     
 
 
  
 
    
Year ended June 30, 2024
  
    
Obligations of
State and
Political
Subdivisions
     
 Mortgage 
Servicing
Rights
     
Total
  
Beginning balance
    $ 2,361      $ 1,482      $ 3,843  
Transfers into Level 3
      —         151        151  
Transfers out of Level 3
      —         (143 )       (143 ) 
Total realized and unrealized gains and losses included in net income
      —         1        1  
Purchases
      —         —         —   
Sales
      —         —         —   
Settlements
      (304 )       —         (304 ) 
  
 
 
     
 
 
     
 
 
  
Ending balance
    $ 2,057      $ 1,491      $ 3,548  
  
 
 
     
 
 
     
 
 
  
Total gains or losses for the period included in net income attributable to the change in unrealized gains or losses related to assets and liabilities still held at the reporting date
    $ —       $ 1      $ 1  
  
 
 
     
 
 
     
 
 
  
Realized and unrealized gains and losses for items reflected in the table above are included in net income in the condensed consolidated statements of income as noninterest income.
Unobservable (Level 3) Inputs
The following tables present quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements at September 30, 2024 and June 30, 2024.
 
    
Fair Value at
September 30, 2024
     
Valuation Technique
   
Unobservable Inputs
   
Range (Weighted
Average)
Mortgage servicing rights
    $ 1,366      Discounted cash flow   
Discount rate
Constant prepayment rate
Probability of default
   
10.0% (10.0%)
7.2% - 10.0% (7.7%)
0.08% - 0.12% (0.11%)
State and political subdivision
    $ 2,057      Discounted cash flow   
Maturity/Call Date
Weighted average coupon
Marketability yield adjustment
   
1 month – 7 years
2.97% - 3.08% (3.04%)
1.0% - 2.0% (1.6%)
 
    
Fair Value at
June 30, 2024
     
Valuation Technique
   
Unobservable Inputs
   
Range (Weighted
Average)
Mortgage servicing rights
    $ 1,491      Discounted cash flow   
Discount rate
Constant prepayment rate
Probability of default
   
10.0% (
10.0%)
6.2% - 8.0% (7.7%)
0.08% - 0.12% (0.11%)
State and political subdivision
      2,057      Discounted cash flow   
Maturity/Call Date
Weighted average coupon
Marketability yield adjustment
   
1 month – 7 years
2.97% - 3.08% (3.04%)
1.0% - 2.0% (1.6%)
Fair Value of Financial Instruments
The following tables present estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall at September 30, 2024 and June 30, 2024.
 
    
Carrying
Amount
     
Fair Value
Measurements
Using

Quoted Prices in
Active Markets
for Identical
Assets

(Level 1)
     
Significant
Other
Observable
Inputs

(Level 2)
     
Significant
Unobservable
Inputs

(Level 3)
  
September 30, 2024:
            
Financial assets
            
Cash and cash equivalents
    $ 7,784      $ 7,784      $ —       $ —   
Interest-bearing time deposits in banks
      250        250        —         —   
Loans, net of allowance for credit losses
      647,064        —         —         619,357  
Federal Home Loan Bank stock
      4,758        —         4,758        —   
Accrued interest receivable
      3,823        —         3,823        —   
Financial liabilities
            
Deposits
      677,159        —         363,156        314,167  
Repurchase agreements
      17,913        —         17,913        —   
Federal Home Loan Bank advances
      83,499        —         83,119        —   
Other borrowings
      25,175           25,183     
Advances from borrowers for taxes and insurance
      510        —         510        —   
Accrued interest payable
      2,756        —         2,756        —   
Unrecognized financial instruments (net of contract amount)
      —         —         —         —   
Commitments to originate loans
      —         —         —         —   
 
    
Carrying
Amount
     
Fair Value
Measurements
Using

Quoted Prices in
Active Markets
for Identical
Assets

(Level 1)
     
Significant
Other
Observable
Inputs

(Level 2)
     
Significant
Unobservable
Inputs

(Level 3)
  
June 30, 2024:
            
Financial assets
            
Cash and cash equivalents
    $ 9,571      $ 9,571      $ —       $ —   
Interest-bearing time deposits in banks
      250        250        —         —   
Loans, net of allowance for credit losses
      639,297        —         —         607,076  
Federal Home Loan Bank stock
      4,499        —         4,499        —   
Accrued interest receivable
      3,457        —         3,457        —   
Financial liabilities
            
Deposits
      727,177        —         407,544        318,612  
Repurchase agreements
      17,772        —         17,772        —   
Federal Home Loan Bank advances
      32,999        —         32,560        —   
Other Borrowings
      25,250        —         25,199        —   
Advances from borrowers for taxes and insurance
      968        —         968        —   
Accrued interest payable
      3,009        —         3,009        —   
Unrecognized financial instruments (net of contract amount)
            
Commitments to originate loans
      —         —         —         —   
The methods utilized to measure the fair value of financial instruments at September 30, 2024,
represent
an approximation of exit price; however, an actual exit price may differ.