Note

– Fair Value Measurement:

ASC Topic

820:

“Fair Value Measurements and Disclosures” defines fair value as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants in the principal or most advantageous market for the asset or liability. ASC Topic

820

establishes a

three

-tiered value hierarchy that prioritizes inputs based on the extent to which inputs used are observable in the market and requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs. If a value is based on inputs that fall in different levels of the hierarchy, the instrument will be categorized based upon the lowest level of input that is significant to the fair value calculation. The

three

levels of inputs are defined as follows:

•

Level

- Valuation is based upon unadjusted quoted prices for identical instruments traded in active markets;

•

Level

- Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are

not

active and model-based valuation techniques for which all significant assumptions are observable in the market;

•

Level

- Valuation is generated from model-based techniques that use inputs

not

observable in the market and based on the entity’s own judgment. Level

valuation techniques could include the use of option pricing models, discounted cash flow models and similar techniques, and rely on assumptions that market participants would use in pricing the asset or liability.

ASC

820

applies whenever other accounting pronouncements require presentation of fair value measurements, but does

not

change existing guidance as to whether or

not

an instrument is carried at fair value. As such, ASC

820

does

not

apply to the Company’s investment in leases. The Company’s financial assets measured at fair value on a recurring basis include primarily securities available-for-sale and at

June 30, 2017,

there were

liabilities subject to ASC

820.

The Company classifies financial assets and liabilities within the fair value hierarchy based on the availability of observable market information. Securities available-for-sale include U.S. Treasury securities, corporate bonds, U.S. government agency (“Agency”) mortgage-backed securities (“MBS”), mutual fund and equity investments and generally are reported at fair value utilizing Level

and Level

inputs. The fair value of corporate bonds and the MBS are obtained from independent quotation bureaus that use computerized valuation formulas to calculate current values based on observable transactions, but

not

a quoted bid, or are valued using prices obtained from the custodian, who uses

third

party data service providers (Level

input). U.S. Treasury securities, mutual funds and equity investments are valued by reference to the market closing or last trade price (Level

inputs). In the unlikely event that

trade occurred on the applicable date, an indicative bid or the last trade most proximate to the applicable date would be used (Level

input). Changes in markets, economic conditions or the Company valuation model

may

require the transfer of financial instruments from

one

level to another. Such transfer, if any, would be recorded at the fair value as of the beginning of the period in which the transfer occurred. The Company has had

transfers in fiscal

2017

and

2016.

The following table summarizes the Company’s assets, which are measured at fair value on a recurring basis as of

June 30, 2017

and

2016:

			Quoted Price in				Significant
			Active Markets for		Significant Other		Unobservable
	Total		Identical Assets		Observable Inputs		Inputs
Description of Assets / Liabilities	Fair Value		(Level 1)		(Level 2)		(Level 3)
	(in thousands)
As of June 30, 2017
U.S. Treasury Notes	$	47,721	$	47,721	$	-	$	-
Corporate debt securities		13,171		-		13,171		-
Agency MBS		25,577		-		25,577		-
Equity investments		7,709		7,709		-
Mutual fund investments		1,331		1,331		-		-
	$	95,509	$	56,761	$	38,748	$	-

As of June 30, 2016
U.S. Treasury Notes	$	48,774	$	48,774	$	-	$	-
Corporate debt securities		13,385		-		13,385		-
Agency MBS		32,223		-		32,223		-
Mutual fund investments		1,462		1,462		-		-
	$	95,844	$	50,236	$	45,608	$	-

Certain financial assets, such as collateral dependent impaired loans and repossessed or returned assets are measured at fair value on a nonrecurring basis; that is, the assets are

not

measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances.

During the year ended

June 30, 2016,

equipment subject to a lease rejected in bankruptcy was transferred from lease receivables and recorded as repossessed equipment in other assets. The fair value of the repossessed equipment was based on available market information, including sales results and appraisal, less estimated selling costs. The equipment repossessed was initially recorded at the estimated fair value less estimated selling costs at the time of transfer to repossessed assets and subsequently written down based on an updated appraisal in fiscal

2016

to a fair value of

$1.3

million based on “Significant Unobservable Inputs (Level

) at

June 30, 2016.

During fiscal

2017,

the repossessed asset was sold. The Company had

such assets or liabilities at

June 30, 2017.