Fair Value of Financial Instruments (Tables)

9 Months Ended

Mar. 31, 2023

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 March 31, 2023:
Loans held for investment, at fair value	$	1,352	$	1,506	$	(154)
As of June 30, 2022:
Loans held for investment, at fair value	$	1,396	$	1,569	$	(173)

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

	Fair Value Measurement at March 31, 2023 Using:
(In Thousands)	Level 1		Level 2		Level 3		Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—	$	1,440	$	—	$	1,440
U.S. government sponsored enterprise MBS		—		713		—		713
Private issue CMO		—		—		98		98
Investment securities - available for sale		—		2,153		98		2,251
Loans held for investment, at fair value		—		—		1,352		1,352
Interest-only strips		—		—		8		8
Total assets	$	—	$	2,153	$	1,458	$	3,611
Liabilities:	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	—	$	—

	Fair Value Measurement at June 30, 2022 Using:
(In Thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment securities - available for sale:
U.S. government agency MBS	$	—	$	1,698	$	—	$	1,698
U.S. government sponsored enterprise MBS		—		865		—		865
Private issue CMO		—		—		113		113
Investment securities - available for sale		—		2,563		113		2,676
Loans held for investment, at fair value		—		—		1,396		1,396
Interest-only strips		—		—		7		7
Total assets	$	—	$	2,563	$	1,516	$	4,079
Liabilities:	$	—	$	—	$	—	$	—
Total liabilities	$	—	$	—	$	—	$	—

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

	For the Quarter Ended March 31, 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 December 31, 2022	$	102	$	1,345	$	9	$	1,456
Total gains or losses (realized/unrealized):
Included in earnings		—		30		—		30
Included in other comprehensive income (loss)		(1)		—		(1)		(2)
Purchases		—		—		—		—
Issuances		—		—		—		—
Settlements		(3)		(23)		—		(26)
Transfers in and/or out of Level 3		—		—		—		—
Ending balance at March 31, 2023	$	98	$	1,352	$	8	$	1,458

(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 March 31, 2022
	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 December 31, 2021	$	146	$	1,555	$	9	$	1,710
Total gains or losses (realized/unrealized):
Included in earnings		—		(67)		(1)		(68)
Included in other comprehensive income (loss)		(2)		—		—		(2)
Purchases		—		—		—		—
Issuances		—		—		—		—
Settlements		(9)		(18)		—		(27)
Transfers in and/or out of Level 3		—		—		—		—
Ending balance at March 31, 2022	$	135	$	1,470	$	8	$	1,613

(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 Nine Months Ended March 31, 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, 2022	$	113	$	1,396	$	7	$	1,516
Total gains or losses (realized/unrealized):
Included in earnings		—		19		—		19
Included in other comprehensive income (loss)		(5)		—		1		(4)
Purchases		—		—		—		—
Issuances		—		—		—		—
Settlements		(10)		(63)		—		(73)
Transfers in and/or out of Level 3		—		—		—		—
Ending balance at March 31, 2023	$	98	$	1,352	$	8	$	1,458

(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 Nine Months Ended March 31, 2022
	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, 2021	$	154	$	1,874	$	10	$	2,038
Total gains or losses (realized/unrealized):
Included in earnings		—		(59)		—		(59)
Included in other comprehensive income (loss)		(2)		—		(2)		(4)
Purchases		—		—		—		—
Issuances		—		—		—		—
Settlements		(17)		(345)		—		(362)
Transfers in and/or out of Level 3		—		—		—		—
Ending balance at March 31, 2022	$	135	$	1,470	$	8	$	1,613

Schedule of fair value assets measured on nonrecurring basis

	Fair Value Measurement at March 31, 2023 Using:
(In Thousands)	Level 1		Level 2		Level 3		Total
Non-performing loans	$	—	$	56	$	889	$	945
Mortgage servicing assets		—		—		94		94
Total	$	—	$	56	$	983	$	1,039

	Fair Value Measurement at June 30, 2022 Using:
(In Thousands)	Level 1		Level 2		Level 3		Total
Non-performing loans	$	—	$	515	$	908	$	1,423
Mortgage servicing assets		—		—		168		168
Total	$	—	$	515	$	1,076	$	1,591

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 March 31, 2023:

						Impact to
	Fair Value					Valuation
	As of					from an
	March 31,		Valuation		Range(1)	Increase in
(Dollars In Thousands)	2023		Techniques	Unobservable Inputs	(Weighted Average)	Inputs(2)
Assets:
Securities available-for sale: Private issue CMO	$	98	Market comparable pricing	Comparability adjustment	(8.2%) - (8.7%) (8.6%)	Increase
Loans held for investment, at fair value	$	1,352	Relative value analysis	Broker quotes	91.5% - 98.0% (93.1%)	Increase
				Credit risk factor	1.2% - 6.6% (3.3%)	Decrease
Non-performing loans(3)	$	710	Discounted cash flow	Default rates	5.0%	Decrease
Non-performing loans(4)	$	179	Relative value analysis	Credit risk factor	20.0%	Decrease
Mortgage servicing assets	$	94	Discounted cash flow	Prepayment speed (CPR)	5.3% - 60.0% (9.7%)	Decrease
				Discount rate	9.0% - 10.5% (9.1%)	Decrease
Interest-only strips	$	8	Discounted cash flow	Prepayment speed (CPR)	7.2% - 15.1% (14.6%)	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.

(3) Consists of restructured loans.

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

Schedule of carrying amount and fair value of financial instruments

	March 31, 2023
	Carrying		Fair
(In Thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Loans held for investment, not recorded at fair value	$	1,076,352	$	1,002,191	$	—	$	—	$	1,002,191
Investment securities - held to maturity	$	161,336	$	143,870	$	—	$	143,870	$	—
FHLB – San Francisco stock	$	8,239	$	8,239	$	—	$	8,239	$	—
Financial liabilities:
Deposits	$	983,046	$	866,706	$	—	$	—	$	866,706
Borrowings	$	205,010	$	203,541	$	—	$	—	$	203,541

	June 30, 2022
	Carrying		Fair
(In Thousands)	Amount		Value		Level 1		Level 2		Level 3
Financial assets:
Loans held for investment, not recorded at fair value	$	938,596	$	892,339	$	—	$	—	$	892,339
Investment securities - held to maturity	$	185,745	$	171,724	$	—	$	171,724	$	—
FHLB – San Francisco stock	$	8,239	$	8,239	$	—	$	8,239	$	—
Financial liabilities:
Deposits	$	955,504	$	917,220	$	—	$	—	$	917,220
Borrowings	$	85,000	$	84,299	$	—	$	—	$	84,299