10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period ended December 31, 2016

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-51201

BofI HOLDING, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0867444
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
4350 La Jolla Village Drive, Suite 140, San Diego, CA	92122
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 350-6200

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    x  Yes    ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filed, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934.

Large accelerated filer  x Accelerated filer  o Non-accelerated filer  ¨ Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    ¨  Yes    x  No

The number of shares outstanding of the Registrant’s common stock on the last practicable date: 63,362,109 shares of common stock, $0.01 par value per share, as of January 24, 2017.

BOFI HOLDING, INC.

INDEX

	Page
PART I – FINANCIAL INFORMATION	1
ITEM 1.       FINANCIAL STATEMENTS	1
Condensed Consolidated Balance Sheets (unaudited) as of December 31, 2016 and June 30, 2016	1
Condensed Consolidated Statements of Income (unaudited) for the three and six months ended December 31, 2016 and 2015	2
Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and six months ended December 31, 2016 and 2015	3
Condensed Consolidated Statement of Stockholders’ Equity (unaudited) for the six months ended December 31, 2016	4
Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended December 31, 2016 and 2015	5
Notes to Condensed Consolidated Financial Statements	6
ITEM 2.        MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	40
SELECTED FINANCIAL DATA	43
RESULTS OF OPERATIONS	45
FINANCIAL CONDITION	52
LIQUIDITY	57
OFF-BALANCE SHEET COMMITMENTS AND CONTRACTUAL OBLIGATIONS	57
CAPITAL RESOURCES AND REQUIREMENTS	59
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	60
ITEM 3:       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS	62
ITEM 4:       CONTROLS AND PROCEDURES	62
PART II – OTHER INFORMATION	64
ITEM 1.       LEGAL PROCEEDINGS	64
ITEM 1A.    RISK FACTORS	64
ITEM 2.       UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	64
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	64
ITEM 4.     MINE SAFETY DISCLOSURES	64
ITEM 5.       OTHER INFORMATION	64
ITEM 6.       EXHIBITS	65
SIGNATURES	66

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BOFI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share data)	December 31, 2016			June 30, 2016
ASSETS
Cash and due from banks	$	683,487		$	486,627
Federal funds sold	24,106			100
Total cash and cash equivalents	707,593			486,727
Securities:
Trading	8,151			7,584
Available-for-sale	379,734			265,447
Held-to-maturity—fair value $202,677 as of June 30, 2016	—			199,174
Stock of the Federal Home Loan Bank, at cost	54,351			57,123
Loans held for sale, carried at fair value	33,990			20,871
Loans held for sale, lower of cost or fair value	15,905			33,530
Loans and leases—net of allowance for loan and lease losses of $40,928 as of December 31, 2016 and $35,826 as of June 30, 2016	6,811,470			6,354,679
Accrued interest receivable	21,538			26,201
Furniture, equipment and software—net	15,126			13,995
Deferred income tax	32,058			39,171
Cash surrender value of life insurance	6,083			5,990
Mortgage servicing rights, carried at fair value	6,150			3,943
Other real estate owned and repossessed vehicles	961			252
Other assets	74,766			84,617
TOTAL ASSETS	$	8,167,876		$	7,599,304
LIABILITIES AND STOCKHOLDERS’ EQUITY
Deposits:
Non-interest bearing	$	634,350		$	588,774
Interest bearing	5,976,324			5,455,277
Total deposits	6,610,674			6,044,051
Securities sold under agreements to repurchase	35,000			35,000
Advances from the Federal Home Loan Bank	665,000			727,000
Subordinated notes and debentures and other	56,408			56,016
Accrued interest payable	1,700			1,667
Accounts payable and other liabilities	45,423			51,980
Total liabilities	7,414,205			6,915,714
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock—$0.01 par value; 1,000,000 shares authorized;
Series A—$10,000 stated value and liquidation preference per share; 515 shares issued and outstanding as of December 31, 2016 and June 30, 2016	5,063			5,063
Common stock—$0.01 par value; 150,000,000 shares authorized; 64,761,369 shares issued and 63,359,001 shares outstanding as of December 31, 2016; 64,513,494 shares issued and 63,219,392 shares outstanding as of June 30, 2016	648			645
Additional paid-in capital	337,698			331,156
Accumulated other comprehensive income (loss)—net of tax	(2,502		)	(7,304		)
Retained earnings	445,857			384,815
Treasury stock, at cost; 1,402,368 shares as of December 31, 2016 and 1,294,102 shares as of June 30, 2016	(33,093		)	(30,785		)
Total stockholders’ equity	753,671			683,590
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	8,167,876		$	7,599,304

See accompanying notes to the condensed consolidated financial statements.

1

BOFI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands, except per share data)	2016			2015			2016			2015
INTEREST AND DIVIDEND INCOME:
Loans and leases, including fees	$	85,839		$	70,117		$	166,458		$	135,195
Investments	8,462			5,818			15,323			11,969
Total interest and dividend income	94,301			75,935			181,781			147,164
INTEREST EXPENSE:
Deposits	14,011			9,709			27,525			18,732
Advances from the Federal Home Loan Bank	2,605			2,626			5,469			5,278
Other borrowings	1,324			429			2,646			855
Total interest expense	17,940			12,764			35,640			24,865
Net interest income	76,361			63,171			146,141			122,299
Provision for loan and lease losses	4,100			3,400			6,000			5,800
Net interest income, after provision	72,261			59,771			140,141			116,499
NON-INTEREST INCOME:
Realized gain (loss) on sale of securities	1,622			933			2,612			933
Other-than-temporary loss on securities:
Total impairment (losses) gains	(7,718		)	(1,037		)	(8,999		)	(1,779		)
Loss (gain) recognized in other comprehensive income	6,368			1,014			7,529			1,638
Net impairment loss recognized in earnings	(1,350		)	(23		)	(1,470		)	(141		)
Fair value gain (loss) on trading securities	456			(196		)	567			(126		)
Total unrealized (loss) gain on securities	(894		)	(219		)	(903		)	(267		)
Prepayment penalty fee income	637			738			1,935			1,614
Gain on sale – other	2,033			5,551			3,726			9,247
Mortgage banking income	4,837			2,909			9,970			4,787
Banking service fees and other income	8,465			6,308			14,092			9,695
Total non-interest income	16,700			16,220			31,432			26,009
NON-INTEREST EXPENSE:
Salaries and related costs	19,933			16,440			39,340			30,762
Professional services	1,086			1,270			2,440			1,633
Occupancy and equipment	1,363			934			2,638			1,847
Data processing and internet	2,941			2,299			6,113			4,179
Advertising and promotional	1,981			1,597			4,522			3,225
Depreciation and amortization	1,411			998			2,764			2,006
Real estate owned and repossessed vehicles	348			24			506			(50		)
FDIC and regulator fees	884			1,108			2,124			2,172
Other general and administrative	3,353			2,775			5,731			4,589
Total non-interest expense	33,300			27,445			66,178			50,363
INCOME BEFORE INCOME TAXES	55,661			48,546			105,395			92,145
INCOME TAXES	23,361			20,397			44,198			38,495
NET INCOME	$	32,300		$	28,149		$	61,197		$	53,650
NET INCOME ATTRIBUTABLE TO COMMON STOCK	$	32,222		$	28,071		$	61,042		$	53,495
COMPREHENSIVE INCOME	$	29,198		$	27,635		$	65,999		$	54,006
Basic earnings per share	$	0.50		$	0.44		$	0.94		$	0.84
Diluted earnings per share	$	0.50		$	0.44		$	0.94		$	0.84

See accompanying notes to the condensed consolidated financial statements.

2

BOFI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands)	2016			2015			2016			2015
NET INCOME	$	32,300		$	28,149		$	61,197		$	53,650
Other comprehensive income, net of tax:
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(3,976) and $(376) for the three months ended December 31, 2016 and 2015, and $1,777 and $(552) for the six months ended December 31, 2016 and 2015, respectively.	(5,353		)	(538		)	2,435			(776		)
Other-than-temporary impairment on securities recognized in other comprehensive income, net of tax expense (benefit) of $2,363 and $401 for the three months ended December 31, 2016 and 2015, and $2,830 and $1,195 for the six months ended December 31, 2016 and 2015, respectively.	3,182			572			3,877			1,680
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $691 and $385 for the three months ended December 31, 2016 and 2015, and $1,102 and $385 for the six months ended December 31, 2016 and 2015, respectively.	(931		)	(548		)	(1,510		)	(548		)
Other comprehensive income	(3,102		)	(514		)	4,802			356
Comprehensive income	$	29,198		$	27,635		$	65,999		$	54,006

See accompanying notes to the condensed consolidated financial statements.

3

BOFI HOLDING, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(Unaudited)

	Preferred Stock			Common Stock						Additional Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Loss, Net of Income Tax			Treasury Stock			Total
				Number of Shares
(Dollars in thousands)	Shares	Amount		Issued	Treasury		Outstanding	Amount
BALANCE—June 30, 2016	515	$	5,063	64,513,494	(1,294,102	)	63,219,392	$	645	$	331,156	$	384,815		$	(7,304	)	$	(30,785	)	$	683,590
Net income	—	—		—	—		—	—		—		61,197			—			—			61,197
Other comprehensive income	—	—		—	—		—	—		—		—			4,802			—			4,802
Cash dividends on preferred stock	—	—		—	—		—	—		—		(155		)	—			—			(155		)
Stock-based compensation expense	—	—		—	—		—	—		6,450		—			—			—			6,450
Restricted stock unit vesting and tax benefits	—	—		247,875	(108,266	)	139,609	3		92		—			—			(2,308		)	(2,213		)
BALANCE—December 31, 2016	515	$	5,063	64,761,369	(1,402,368	)	63,359,001	$	648	$	337,698	$	445,857		$	(2,502	)	$	(33,093	)	$	753,671

See accompanying notes to the condensed consolidated financial statements.

4

BOFI HOLDING, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended
	December 31,
(Dollars in thousands)	2016			2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	61,197		$	53,650
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion of discounts on securities	(1,722		)	(2,329		)
Net accretion of discounts on loans and leases	2,724			1,636
Amortization of borrowing costs	104			2
Stock-based compensation expense	6,450			5,116
Tax benefit from exercise of common stock options and vesting of restricted stock grants	(95		)	(2,510		)
Valuation of financial instruments carried at fair value	(567		)	126
Net gain on sale of investment securities	(2,612		)	(933		)
Impairment charge on securities	1,470			141
Provision for loan and lease losses	6,000			5,800
Deferred income taxes	2,090			(3,963		)
Origination of loans held for sale	(844,456		)	(904,453		)
Unrealized (gain) loss on loans held for sale	(112		)	(62		)
Gain on sales of loans held for sale	(13,696		)	(14,034		)
Proceeds from sale of loans held for sale	859,495			937,049
Change in fair value of mortgage servicing rights	(364		)	51
(Gain) loss on sale of other real estate and foreclosed assets	4			(108		)
Depreciation and amortization of furniture, equipment and software	2,764			2,006
Net changes in assets and liabilities which provide (use) cash:
Accrued interest receivable	3,775			1,087
Other assets	7,803			(14,049		)
Accrued interest payable	33			(4		)
Accounts payable and other liabilities	(7,135		)	5,194
Net cash provided by (used in) operating activities	83,150			69,413
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities	(93,151		)	(96,928		)
Proceeds from sale of available-for-sale securities	121,252			10,069
Proceeds from repayment of securities	69,016			35,914
Purchase of stock of Federal Home Loan Bank	(30,939		)	(68,649		)
Proceeds from redemption of stock of Federal Home Loan Bank	33,711			67,500
Origination of loans and leases for portfolio	(1,946,482		)	(1,761,693		)
Origination of mortgage warehouse loans, net	(50,401		)	(54,327		)
Proceeds from sales of other real estate owned and repossessed assets	146			1,442
Purchases of loans and leases, net of discounts and premiums	—			(384		)
Principal repayments on loans	1,533,896			1,086,419
Net purchases of furniture, equipment and software	(3,895		)	(3,890		)
Net cash used in investing activities	(366,847		)	(784,527		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	566,623			748,049
Proceeds from Federal Home Loan Bank advances	411,000			524,000
Repayment of Federal Home Loan Bank advances	(473,000		)	(519,000		)
Proceeds from exercise of common stock options	—			147
Proceeds from issuance of common stock	—			21,120
Tax benefit from exercise of common stock options and vesting of restricted stock grants	95			2,510
Cash dividends on preferred stock	(155		)	(155		)
Net cash provided by financing activities	504,563			776,671
NET CHANGE IN CASH AND CASH EQUIVALENTS	220,866			61,557
CASH AND CASH EQUIVALENTS—Beginning of year	486,727			222,874
CASH AND CASH EQUIVALENTS—End of period	$	707,593		$	284,431
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds	$	35,607		$	24,869
Income taxes paid	$	38,717		$	37,216
Transfers to other real estate owned and repossessed vehicles from loans	$	1,340		$	518
Transfers from loans held for investment to loans held for sale	$	—		$	7,985
Transfers from loans held for sale to loans held for investment	$	2,047		$	18,846
Securities transferred from held-to-maturity to available-for-sale portfolio	$	194,153		$	—

See accompanying notes to the condensed consolidated financial statements.

5

BOFI HOLDING, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTH PERIODS ENDED DECEMBER 31, 2016 AND 2015

(Dollars in thousands, except per share data)

(Unaudited)

1. BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of BofI Holding, Inc. and its wholly owned subsidiary, BofI Federal Bank (the “Bank” and collectively with BofI Holding, Inc., the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the six months ended December 31, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”)with respect to interim financial reporting. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended June 30, 2016 included in our Annual Report on Form 10-K.

2. SIGNIFICANT ACCOUNTING POLICIES

Securities. Debt securities are classified as held-to-maturity and carried at amortized cost when management has both the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Trading securities refer to certain types of assets that banks hold for resale at a profit or when the Company elects to account for certain securities at fair value. Increases or decreases in the fair value of trading securities are recognized in earnings as they occur. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. During the quarter ended September 30, 2016, the Company elected to reclassify all of its held-to-maturity securities to available-for-sale. See Note 4 – “Securities” for further information.

Gains and losses on securities sales are based on a comparison of sales proceeds and the amortized cost of the security sold using the specific identification method. Purchases and sales are recognized on the trade date. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized or accreted using the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company’s portfolios of held-to-maturity and available-for-sale securities are reviewed quarterly for other-than-temporary impairment. In performing this review, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) how to record an impairment by assessing whether the Company intends to sell or it is more likely than not that it will be required to sell a security in an unrealized loss position before the Company recovers the security’s amortized cost. If either of these criteria for (4) is met, the entire difference between amortized cost and fair value is recognized in earnings. Alternatively, if the criteria for (4) is not met, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Loans and Leases. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred purchase premiums and discounts, deferred loan origination fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Premiums and discounts on loans purchased as well as loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method.

The Company provides equipment financing to its customers through a variety of lease arrangements. The most common arrangement is a direct financing (capital) lease. For direct financing leases, lease receivables are recorded on the balance sheet but the leased property is not, although the Company generally retains legal title to the leased property until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized over the weighted average life of the lease portfolio. Leases acquired in an acquisition are initially measured and recorded at their fair value on the acquisition date. Purchase discounts or premiums on acquired leases are recognized as an adjustment to interest

6

income over the contractual life of the leases using the effective interest method or taken into income when the related leases are paid off. Direct financing leases are subject to our allowance for loans and leases.

Recognition of interest income on all portfolio segments is generally discontinued at the time the loan or lease is 90 days delinquent unless the loan or lease is well secured and in process of collection. Past due status is based on the contractual terms of the loan or lease. In all cases, loans or leases are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans or leases placed on nonaccrual, is reversed against interest income. Interest received on such loans or leases is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans and leases are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans Held for Sale. U.S government agency (“agency”) loans originated and intended for sale in the secondary market are carried at fair value. Net unrealized gains and losses are recognized through the income statement. The Bank sells its mortgage loans with either servicing released or servicing retained depending upon market pricing. Gains and losses on loan sales are recorded as mortgage banking income, based on the difference between sales proceeds and carrying value. Non-agency loans held for sale are carried at the lower of cost or fair value.

Loans that were originated with the intent and ability to hold for the foreseeable future (loans held in portfolio) but which have been subsequently designated as being held for sale for risk management or liquidity needs are carried at the lower of cost or fair value calculated on an individual loan by loan basis.

There may be times when loans have been classified as held for sale and for some reason cannot be sold. Loans transferred to a long-term-investment classification from held-for-sale are transferred at the lower of cost or market value on the transfer date. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. A loan cannot be classified as a long-term investment unless the Bank has both the ability and the intent to hold the loan for the foreseeable future or until maturity.

Allowance for Loan and Lease Losses. The allowance for loan and lease losses is maintained at a level estimated to provide for probable incurred losses in the loan and lease portfolio. Management determines the adequacy of the allowance based on reviews of individual loans and leases and pools of loans, recent loss experience, current economic conditions, the risk characteristics of the various categories of loans and other pertinent factors. This evaluation is inherently subjective and requires estimates that are susceptible to significant revision as more information becomes available. The allowance is increased by the provision for loan and lease losses, which is charged against current period operating results and recoveries of loans previously charged-off. The allowance is decreased by the amount of charge-offs of loans deemed uncollectible. Allocations of the allowance may be made for specific loans but the entire allowance is available for any loan that, in management’s judgment, should be charged off. See Note 5 of these financial statement footnotes and the financial statement footnotes for the year ended June 30, 2016 included in our Annual Report on Form 10-K for further information.

Brand Partnership Products. The Bank has agreements with H&R Block, Inc. (“H&R Block”) and its wholly-owned subsidiaries that allow the Bank to provide H&R Block-branded financial products and services. The products and services that represent the primary focus and the majority of transactional volume that the Bank processes are described in detail below.

The first product is Emerald Prepaid MasterCard® services. The Bank entered into agreements to offer this product in August 2015. Under the agreements, the Bank is responsible for the primary oversight and control of the prepaid card programs of a wholly-owned subsidiary of H&R Block. The Bank holds the prepaid card customer deposits for those cards issued under the prepaid programs in non-interest bearing accounts and earns a fixed fee paid by H&R Block’s subsidiary for each automated clearing house (“ACH”) transaction processed through the prepaid card customer accounts. A portion of H&R Block’s customers use the Emerald Card as an option to receive federal and state income tax refunds. The prepaid customer deposits are included in non-interest bearing deposit liabilities on the balance sheet of the Company and the ACH fee income is included in the income statement under the line banking service fees and other income.

The second product is Refund Transfer. The Bank entered into agreements to offer this product in August 2015. The Bank is responsible for the primary oversight and control of the refund transfer program of a wholly-owned subsidiary of H&R Block. The Bank opens a temporary bank account for each H&R Block customer who is receiving an income tax refund and elects to defer payment of his or her tax preparation fees. After the Internal Revenue Service and any state income tax authorities transfer the refund into the customer’s account, the net funds are transferred to the customer and the temporary deposit account is closed. The Bank earns a fixed fee paid by H&R Block for each of the H&R Block customers electing a Refund Transfer. The fees are earned primarily in the quarters ending March 31st and are included in the income statement under the line banking service fees and other income.

7

The third product is Emerald Advance. The Bank entered into agreements to offer this product in August 2015. Under the agreements the Bank is responsible for the underwriting guidelines and credit policies for unsecured consumer lines of credit offered to H&R Block customers. The Bank offers and funds unsecured lines of credit to consumers primarily through the H&R Block tax preparation offices and earns interest income and fee income. The Bank retains 10% of the Emerald Advance and sells the remainder to H&R Block. The lines of credit are included in loans and leases on the balance sheet of the Company and the interest income and fee income are included in the income statement under the line loans and leases interest and dividend income.

The fourth product is an Individual Retirement Account (“IRA”). The Bank entered into agreements to offer this product in August 2015, but the initial offering of this product through H&R Block offices occurs in conjunction with the tax season ending April 18, 2017. The Bank is responsible for the primary oversight and control of the IRA product. During a tax preparation session with an H&R Block tax preparer, the customer is given an option to open a traditional IRA or Roth IRA savings account with the Bank. If the customer elects the option to open an account and meets the Bank’s requirements, an account is opened on the Bank’s core operating system under the Bank’s oversight and control. The customer has the option to deposit funds for the IRA through check or ACH. The Bank provides IRA custodial services, earns a nominal fee paid by the customers for any account closures or transfers out, and pays customers interest based on their IRA balance. The fees are included in the income statement under the line banking service fees and other income and interest paid is included under the line deposit interest expense.

The fifth product is an interest-free Refund Advance loan. The Bank entered into agreements to offer this product in October 2016. Under the agreements the Bank will perform disbursement and repayment services and provide funding for interest-free Refund Advance loans to H&R Block customers. The Bank, in conjunction with its agreement partners, offers and funds interest-free loans to consumers, secured by the consumer’s tax refund receivable, primarily through the H&R Block tax preparation offices and earns fee income. The average life of the Refund Advance loan is expected to be ten days. The Bank retains the Refund Advance loans that it funds and will be included in loans and leases on the balance sheet of the Company and fee income will be included in the income statement under the line banking service fees and other income.

New Accounting Pronouncements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2015-03 Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Under the amended guidance, debt issuance costs related to a recognized debt liability are required to be presented as deductions from the carrying amounts of the corresponding debt liabilities, consistent with the presentation of debt discounts and premiums. The amended guidance was adopted for the quarter ended September 30, 2016 and applied retrospectively in accordance with the amended guidance, wherein the balance sheet of each individual period presented has been adjusted to reflect the period-specific effects of applying the amended guidance. The adoption of this guidance did not materially impact our consolidated financial position or consolidated results of operations.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account. ASU 2016-13 also requires certain incremental disclosures. ASU 2016-13 should be applied on a modified-retrospective transition approach that would require a cumulative-effect adjustment to the opening retained earnings in the statement of financial condition as of the date of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The guidance will be effective for the Company’s financial statements that include periods beginning July 1, 2020. Early adoption is permitted beginning July 1, 2019. The Company is currently evaluating the impact of this ASU and the Company expects ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

3. FAIR VALUE

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurement, also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 1 assets and liabilities include debt and equity securities that are actively traded in an exchange or over-the-counter market and are highly liquid, such as, among other assets and securities, certain U.S. treasury and other U.S. government debt.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market

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data for substantially the full term of the assets or liabilities. Level 2 assets include securities with quoted prices that are traded less frequently than exchange-traded instruments and whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

When available, the Company generally uses quoted market prices to determine fair value, in which case the items are classified in Level 1. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2.

The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and should be given little, if any, weight in measuring fair value.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified:

Securities—trading. Trading securities are recorded at fair value. The trading portfolio consists of two different issues of floating-rate debt securities collateralized by pools of bank trust preferred securities. Recent liquidity and economic uncertainty have made the market for collateralized debt obligations less active or inactive. As quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying assets. The Company’s expected cash flows are calculated for each security and include the impact of actual and forecasted bank defaults within each collateral pool as well as structural features of the security’s tranche such as lock outs, subordination and overcollateralization. The forecast of underlying bank defaults in each pool is based upon a quarterly financial update including the trend in non-performing assets, the allowance for loan and lease losses and the underlying bank’s capital ratios. Also a factor is the Company’s loan and lease loss experience in the local economy in which the bank operates. At December 31, 2016, the Company’s forecast of cash flows for both securities includes actual and forecasted defaults totaling 17.9% of all banks in the collateral pools, compared to 16.1% of the banks actually in default. The expected cash flows reflect the Company’s best estimate of all pool losses which are then applied to the overcollateralization reserve and the subordinated tranches to determine the cash flows. The Company selects a discount rate margin based upon the spread between U.S. Treasury rates and the market rates for active credit grades for financial companies. The discount margin when added to the U.S. Treasury rate determines the discount rate, reflecting primarily market liquidity and interest rate risk since expected credit loss is included in the cash flows. At December 31, 2016, the Company used a weighted average discount margin of 475 basis points above U.S. Treasury rates to calculate the net present value of the expected cash flows and the fair value of its trading securities.

The Level 3 fair values determined by the Company for its trading securities rely heavily on management’s assumptions as to the future credit performance of the collateral banks, the impact of the global and regional economic activity, the timing of forecasted defaults and the discount rate applied to cash flows. The fair value of the trading securities at December 31, 2016 is sensitive to an increase or decrease in the discount rate. An increase in the discount margin of 100 basis points would have reduced the total fair value of the trading securities and decreased net income before income tax by $803. A decrease in the discount margin of 100 basis points would have increased the total fair value of the trading securities and increased net income before income tax by $921.

Securities—available-for-sale and held-to-maturity. Available-for-sale (“AFS”) securities are recorded at fair value and consist of residential mortgage-backed securities (“RMBS”) issued by U.S. agencies, non-agencies, collateralized loan obligations, and municipals. Held-to-maturity (“HTM”) securities are recorded at amortized cost and consist of RMBS issued by U.S. agencies, RMBS issued by non-agencies, and municipals. Fair value for U.S. agency securities is generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. There continues to be significant illiquidity in the market for RMBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices

9

are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency RMBS in the same manner (as described below) whether available-for-sale or held-to-maturity.

To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. For each security, the Company inputs a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of each security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by (and decreased by) the forecasted decrease or increase in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The national unemployment rate announced prior to the end of the period covered by this report (reported for November 2016) was 4.6%, down from the high of 10.0% in October 2009. Consensus estimates for unemployment are that the rate will continue to decline. Going forward, the Company is projecting lower monthly default rates. The range of loss severity rates applied to each default used in the Company’s projections at December 31, 2016 are from 40.0% up to 68.8% based upon individual bond historical performance. The default rates and the severities are projected for every non-agency RMBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above.

To determine the discount rates used to compute the present value of the expected cash flows for these non-agency RMBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency RMBS securities using market-participant assumptions for risk, capital and return on equity. The range of annual default rates used in the Company’s projections at December 31, 2016 are from 1.5% up to 13.7% with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range. The Company applies its discount rates to the projected monthly cash flows which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at December 31, 2016, the Company computed its discount rates as a spread between 239 and 668 basis points over the interpolated swap curve with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range.

The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of the security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about Level 3 fair value measurements.

Loans Held for Sale. Loans held for sale at fair value are primarily single-family and multifamily residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors.

Impaired Loans. Impaired loans are loans which are inadequately protected by the current net worth and paying capacity of the borrowers or the collateral pledged. The accrual of interest income has been discontinued for impaired loans. The impaired loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The Company assesses loans individually and identifies impairment when the loan is classified as impaired, has been restructured, or management has serious doubts about the future collectibility of principal and interest, even though the loans may currently be performing. The fair value of an impaired loan is determined based on an observable market price or current appraised value of the underlying collateral. The fair value of impaired loans with specific write-offs or allocations of the allowance for loan losses are generally based on recent real estate appraisals or internal valuation analyses consistent with the methodology used in real estate appraisals and include other third-party valuations and analysis of cash flows. These appraisals and analyses are updated at least on an annual basis. The Company primarily obtains real estate appraisals and in the rare cases where an appraisal cannot be obtained, the Company performs an internal valuation analysis. These appraisals and analyses may utilize a single valuation approach or a combination of approaches including comparable sales and income approaches. The sales comparison approach uses at least three recent similar property sales to help determine the fair value of the property being appraised. The income approach is calculated by taking the net operating income generated by the collateral property of the rent collected and dividing it by an

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assumed capitalization rate. Adjustments are routinely made in the process by the appraisers to account for differences between the comparable sales and income data available. When measuring the fair value of the impaired loan based upon the projected sale of the underlying collateral, the Company subtracts the costs expected to be incurred for the transfer of the underlying collateral, which includes items such as sales commissions, delinquent taxes and insurance premiums. These adjustments to the estimated fair value of non-performing loans may result in increases or decreases to the provision for loan losses recorded in current earnings. Such adjustments are typically significant and result in a Level 3 classification for the inputs for determining fair value.

Other Real Estate Owned and Repossessed Vehicles. Non-recurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at the lower of carrying amount or fair value, less estimated costs to sell. Fair values are generally based on third-party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Mortgage Servicing Rights. The Company initially records all mortgage servicing rights (“MSRs”) at fair value and accounts for MSRs at fair value during the life of the MSR, with changes in fair value recorded through current period earnings. Fair value adjustments encompass market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is imputed from observable market activity and market participants and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset.

Mortgage Banking Derivatives. Fair value for mortgage banking derivatives are either based upon prices in active secondary markets for identical securities or based on quoted market prices of similar assets used to form a dealer quote or a pricing matrix. If no such quoted price exists, the fair value of a commitment is determined by quoted prices for a similar commitment or commitments, adjusted for the specific attributes of each commitment. These fair values are then adjusted for items such as fallout and estimated costs to originate the loan.

The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the Company’s valuation methodologies are appropriate and consistent with or, in some cases, more conservative than other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the relevant reporting date.

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The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and June 30, 2016. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	8,151	$	8,151
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,264	$	—	$	33,264
Non-Agency RMBS	—		—		82,226		82,226
Municipal	—		29,373		—		29,373
Other Debt Securities	—		234,871		—		234,871
Total—Securities—Available-for-Sale	$	—	$	297,508	$	82,226	$	379,734
Loans Held for Sale	$	—	$	33,990	$	—	$	33,990
Mortgage Servicing Rights	$	—	$	—	$	6,150	$	6,150
Other assets – Derivative Instruments	$	—	$	—	$	2,340	$	2,340
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	89	$	89
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	7,584	$	7,584
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,722	$	—	$	33,722
Non-Agency RMBS	—		—		9,364		9,364
Municipal	—		34,719		—		34,719
Other Debt Securities	—		187,642		—		187,642
Total—Securities—Available-for-Sale	$	—	$	256,083	$	9,364	$	265,447
Loans Held for Sale	$	—	$	20,871	$	—	$	20,871
Mortgage Servicing Rights	$	—	$	—	$	3,943	$	3,943
Other assets – Derivative Instruments	$	—	$	—	$	2,202	$	2,202
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	884	$	884

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The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	For the Three Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening balance	$	7,695	$	133,169		$	4,855	$	2,186	$	147,905
Transfers into Level 3	—		—			—		—		—
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(2,569		)	—		—		(2,569		)
Included in earnings—Fair value gain (loss) on trading securities	456		—			—		—		456
Included in earnings—Mortgage banking income	—		—			585		65		650
Included in other comprehensive income	—		1,780			—		—		1,780
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			710		—		710
Issues	—		—			—		—		—
Sales	—		(44,210		)	—		—		(44,210		)
Settlements	—		(4,594		)	—		—		(4,594		)
Other-than-temporary impairment	—		(1,350		)	—		—		(1,350		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	456	$	(2,569	)	$	585	$	65	$	(1,463	)
	For the Six Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening Balance	$	7,584	$	9,364		$	3,943	$	1,318	$	22,209
Transfers into Level 3	—		124,547			—		—		124,547
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(1,868		)	—		—		(1,868		)
Included in earnings—Fair value gain (loss) on trading securities	567		—			—		—		567
Included in earnings—Mortgage banking income	—		—			364		933		1,297
Included in other comprehensive income	—		9,314			—		—		9,314
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			1,843		—		1,843
Issues	—		—			—		—		—
Sales	—		(50,609		)	—		—		(50,609		)
Settlements	—		(7,052		)	—		—		(7,052		)
Other-than-temporary impairment	—		(1,470		)	—		—		(1,470		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	567	$	(1,868	)	$	364	$	933	$	(4	)

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	For the Three Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening balance	$	7,902		$	24,993		$	2,687		$	1,018		$	36,600
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain on trading securities	(196		)	—			—			—			(196		)
Included in earnings—Mortgage banking income	—			—			95			13			108
Included in other comprehensive income	—			(715		)	—			—			(715		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			693			—			693
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(369		)	—			—			(369		)
Other-than-temporary impairment	—			(4		)	—			—			(4		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(196	)	$	(680	)	$	95		$	13		$	(768	)
	For the Six Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening Balance	$	7,832		$	26,633		$	2,098		$	2,261		$	38,824
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain (loss) on trading securities	(126		)	—			—			—			(126		)
Included in earnings—Mortgage banking income	—			—			(51		)	(1,230		)	(1,281		)
Included in other comprehensive income	—			(961		)	—			—			(961		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			1,428			—			1,428
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(1,728		)	—			—			(1,728		)
Other-than-temporary impairment	—			(39		)	—			—			(39		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(126	)	$	(680	)	$	(51	)	$	(1,230	)	$	(2,087	)

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The table below summarizes the quantitative information about level 3 fair value measurements at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	8,151	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	13.7 to 22.0% (17.8%) 4.75 to 4.75% (4.75%)
Securities – Available-for-Sale: Non-agency RMBS	$	82,226	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.5 to 25.3% (10.0%) 1.5 to 13.7% (4.3%) 40.0 to 68.8% (57.4%) 2.39 to 6.68% (3.61%)
Mortgage Servicing Rights	$	6,150	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	6.6 to 21.7% (9.0%) 2.9 to 8.5 (6.9) 9.5 to 13.0% (9.7%)
Derivative Instruments, net	$	2,251	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.2 to 0.7% (0.5%)

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	7,584	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	11.7 to 21.0% (16.5%) 5.0 to 5.0% (5.0%)
Securities – Available-for-Sale: Non-agency RMBS	$	9,364	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	9.1 to 20.6% (14.2%) 1.5 to 13.6% (6.1%) 40.0 to 68.8% (51.5%) 2.5 to 2.9% (2.8%)
Mortgage Servicing Rights	$	3,943	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	7.8 to 21.8% (10.6%) 3.5 to 7.1 (6.2) 9.5 to 10.5% (9.5%)
Derivative Instruments, net	$	1,318	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.3 to 0.6% (0.4%)

The significant unobservable inputs used in the fair value measurement of the Company’s residential mortgage-backed securities are prepayment rates, probability of default, and loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates.

The table below summarizes changes in unrealized gains and losses and interest income recorded in earnings for level 3 trading assets and liabilities that are still held at the periods indicated:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income on investments	$	70	$	60		$	143	$	117
Fair value adjustment	456		(195		)	567		(126		)
Total	$	526	$	(135	)	$	710	$	(9	)

15

The table below summarizes assets measured for impairment on a non-recurring basis:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,351	$	28,351
Home equity	—		—		47		47
Multifamily real estate secured	—		—		5,478		5,478
Commercial real estate secured	—		—		232		232
Auto and RV secured	—		—		216		216
Other	—		—		445		445
Total	$	—	$	—	$	34,769	$	34,769
Other real estate owned and foreclosed assets:
Single family real estate	$	—	$	—	$	908	$	908
Autos and RVs	—		—		53		53
Total	$	—	$	—	$	961	$	961
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,610	$	28,610
Home equity	—		—		33		33
Multifamily real estate secured	—		—		2,218		2,218
Commercial real estate secured	—		—		254		254
Auto and RV secured	—		—		278		278
Other	—		—		676		676
Total	$	—	$	—	$	32,069	$	32,069
Other real estate owned and foreclosed assets:
Multifamily real estate	—		—		207		207
Autos and RVs	—		—		45		45
Total	$	—	$	—	$	252	$	252
HTM Securities – Non-Agency RMBS	$	—	$	—	$	79,164	$	79,164

Impaired loans measured for impairment on a non-recurring basis using the fair value of the collateral for collateral-dependent loans have a carrying amount of $34,769, after charge-offs of $903 for the six months endedDecember 31, 2016, and life to date charge-offs of $5,665. Impaired loans had a related allowance of $705 at December 31, 2016.

Other real estate owned and foreclosed assets, which are measured at the lower of carrying value or fair value less costs to sell, had a net carrying amount of $961 after charge-offs of $323 for the three months ended December 31, 2016.

Held-to-maturity securities measured for impairment on a non-recurring basis had no fair value and no carrying amount at December 31, 2016, with no net impairment charges to income and no changes to other comprehensive income during the six months ended December 31, 2016. The Company recognized net impairment charges to income of $102 and an increase in other

16

comprehensive income of $3,496 for the six months ended December 31, 2015. These held-to-maturity securities are valued using Level 3 inputs.

The Company has elected the fair value option for Agency loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan. None of these loans are 90 days or more past due nor on nonaccrual as of December 31, 2016 and June 30, 2016.

As of December 31, 2016 and June 30, 2016, the aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows:

(Dollars in thousands)	December 31, 2016		June 30, 2016
Aggregate fair value	$	33,990	$	20,871
Contractual balance	33,232		20,226
Unrealized gain	$	758	$	645

The total amount of unrealized gains and losses from changes in fair value included in earnings for the period indicated below for loans held for sale were:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income	$	192	$	161		$	329	$	433
Change in fair value	99		(286		)	1,046		(1,292		)
Total	$	291	$	(125	)	$	1,375	$	(859	)

17

The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,351	Sales comparison approach	Adjustment for differences between the comparable sales	-33.3 to 56.4% (-3.0%)
Home equity	$	47	Sales comparison approach	Adjustment for differences between the comparable sales	-7.8 to 22.0% (1.5%)
Multifamily real estate secured	$	5,478	Sales comparison approach, income approach, Discounted cash flows	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	-26.7 to 25.0% (-9.5%)
Commercial real estate secured	$	232	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	0.0 to 23.6% (11.8%)
Auto and RV secured	$	216	Sales comparison approach	Adjustment for differences between the comparable sales	-31.0 to 25.9% (-6.7%)
Other	$	445	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 4.9 to 6.0% (5.4%)
Other real estate owned and foreclosed assets:
Single family real estate	$	908	Sales comparison approach	Adjustment for differences between the comparable sales	-23.0 to 12.5% (-5.3%)
Autos and RVs	$	53	Sales comparison approach	Adjustment for differences between the comparable sales	-5.9 to 16.1% (4.3%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

18

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,610	Sales comparison approach	Adjustment for differences between the comparable sales	-40.6 to 69.5% (6.2%)
Home equity	$	33	Sales comparison approach	Adjustment for differences between the comparable sales	-27.2 to 0.0% (-11.1%)
Multifamily real estate secured	$	2,218	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	-29.7 to 58.0% (3.0%)
Commercial real estate secured	$	254	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 66.7% (33.3%)
Auto and RV secured	$	278	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 22.8% (10.6%)
Other	$	676	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 6.6 to 8.0% (7.3%)
Other real estate owned and foreclosed assets:
Multifamily real estate	$	207	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 25.0% (12.5%)
Autos and RVs	$	45	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 20.6% (10.2%)
HTM Securities – Non-Agency RMBS	$	79,164	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.6 to 48.8% (12.0%) 1.5 to 17.8% (5.7%) 40.0 to 65.9% (56.5%) 2.9 to 8.2% (5.7%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

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Fair value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at December 31, 2016 and June 30, 2016 were as follows:

	December 31, 2016
			Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	707,593	$	707,593	$	—	$	—	$	707,593
Securities trading	8,151		—		—		8,151		8,151
Securities available-for-sale	379,734		—		297,508		82,226		379,734
Loans held for sale, at fair value	33,990		—		33,990		—		33,990
Loans held for sale, at lower of cost or fair value	15,905		—		—		16,610		16,610
Loans and leases held for investment—net	6,811,470		—		—		6,982,624		6,982,624
Accrued interest receivable	21,538		—		—		21,538		21,538
Mortgage servicing rights	6,150		—		—		6,150		6,150
Financial liabilities:
Time deposits and savings	6,610,674		—		6,238,765		—		6,238,765
Securities sold under agreements to repurchase	35,000		—		35,640		—		35,640
Advances from the Federal Home Loan Bank	665,000		—		671,061		—		671,061
Subordinated notes and debentures and other	56,408		—		52,401		—		52,401
Accrued interest payable	1,700		—		1,700		—		1,700

	June 30, 2016
	Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	486,727	$	486,727	$	—	$	—	$	486,727
Securities trading	7,584		—		—		7,584		7,584
Securities available-for-sale	265,447		—		256,083		9,364		265,447
Securities held-to-maturity	199,174		—		77,415		125,262		202,677
Loans held for sale, at fair value	20,871		—		20,871		—		20,871
Loans held for sale, at lower of cost or fair value	33,530		—		—		33,530		33,530
Loans and leases held for investment—net	6,354,679		—		—		6,640,918		6,640,918
Accrued interest receivable	26,201		—		—		26,201		26,201
Mortgage servicing rights	3,943		—		—		3,943		3,943
Financial liabilities:
Time deposits and savings	6,044,051		—		5,946,991		—		5,946,991
Securities sold under agreements to repurchase	35,000		—		36,391		—		36,391
Advances from the Federal Home Loan Bank	727,000		—		747,940		—		747,940
Subordinated notes and debentures and other	56,016		—		58,299		—		58,299
Accrued interest payable	1,667		—		1,667		—		1,667

The methods and assumptions, not previously presented, used to estimate fair value are described as follows: Carrying amount is the estimated fair value for cash and cash equivalents, interest bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available for sale securities and loans held for sale can be found earlier in this footnote. The carrying amount of stock of the Federal Home Loan Bank (“FHLB”) approximates the estimated fair value of this investment. The fair value of off-balance sheet items is not considered material.

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4. SECURITIES

The amortized cost, carrying amount and fair value for the major categories of securities: trading, available-for-sale, and held-to-maturity at December 31, 2016 and June 30, 2016 were:

	December 31, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,422	$	265	$	(423	)	$	33,264	$	—	$	—	$	—		$	—
Non-agency2	—		79,469		5,800		(3,043		)	82,226		—		—		—			—
Total mortgage-backed securities	—		112,891		6,065		(3,466		)	115,490		—		—		—			—
Other debt securities:
Municipal	—		29,907		15		(549		)	29,373		—		—		—			—
Non-agency	8,151		233,048		1,975		(152		)	234,871		—		—		—			—
Total other debt securities	8,151		262,955		1,990		(701		)	264,244		—		—		—			—
Total debt securities	$	8,151	$	375,846	$	8,055	$	(4,167	)	$	379,734	$	—	$	—	$	—		$	—
	June 30, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,256	$	489	$	(23	)	$	33,722	$	35,067	$	843	$	(1	)	$	35,909
Non-agency2	—		9,043		321		—			9,364		128,211		7,095		(10,044		)	125,262
Total mortgage-backed securities	—		42,299		810		(23		)	43,086		163,278		7,938		(10,045		)	161,171
Other debt securities:
Municipal	—		34,543		185		(10		)	34,718		35,896		5,610		—			41,506
Non-agency	7,584		186,316		1,501		(174		)	187,643		—		—		—			—
Total other debt securities	7,584		220,859		1,686		(184		)	222,361		35,896		5,610		—			41,506
Total debt securities	$	7,584	$	263,158	$	2,496	$	(207	)	$	265,447	$	199,174	$	13,548	$	(10,045	)	$	202,677

__________________________________

^1.  U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

^2.  Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

During the quarter ended September 30, 2016, the Company elected to reclassify all of its HTM securities to AFS. At the time of reclassification, while the Company had the ability to hold those transferred securities to maturity and did not intend to sell the securities, the Company concluded that there were sufficient uncertainties associated with i) future fiscal and monetary policy resulting from domestic and international political changes, ii) future interpretations and applications of new accounting principles and regulatory guidance; iii) the pace of future market interest rate increases given that market interest rates remain at historical lows, all of which could, depending upon the outcomes, change the Company’s intent to hold its securities. Under Accounting Standards Codification 320-10 Investments—Debt Securities, there are very limited exceptions that allow an entity to reclassify or sell one or more securities from HTM and still use the HTM classification for any remaining securities. The Company concluded that such exceptions may not apply to all results and elected to reclassify all HTM securities to AFS understanding that such reclassification immediately eliminated the Company’s ability to use the HTM classification for its securities portfolio for a period of time not to be less than one year. The Company will perform periodic assessments in the future to determine whether the above referenced uncertainties have been resolved and that management has the positive intent and ability to hold securities until maturity. The net carrying amount of the securities reclassified in September 2016 from HTM to AFS was $194,153 and the fair value of AFS securities at December 31, 2016 is reflected in the Unaudited Condensed Consolidated Balance Sheets. The reclassification resulted in an unrealized gain recognized through other comprehensive income of $3,618 in the Unaudited Condensed Consolidated Statements of Comprehensive Income.

21

The Company’s non-agency RMBS available-for-sale portfolio with a total fair value of $82,226 at December 31, 2016 consists of forty-four different issues of super senior securities with a fair value of $81,210, two mezzanine z-tranche securities, negative-amortizing support tranches, with a fair value of $49 collateralized by seasoned prime and Alt-A first-lien mortgages and one senior support security that it acquired at a significant discount that evidenced credit deterioration at acquisition, with a fair value of $967. The Company acquired its mezzanine z-tranche securities in fiscal 2010 and accounts for them by measuring the excess of cash flows expected at acquisition over the purchase price (accretable yield) and recognizes interest income over the remaining life of the security.

Debt securities with evidence of credit quality deterioration since issuance and for which it is probable at purchase that the Company will be unable to collect all of the par value of the security are accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC Topic 310-30”). Under ASC Topic 310-30, the excess of cash flows expected at acquisition over the purchase price is referred to as the accretable yield and is recognized in interest income over the remaining life of the security. The Company has one senior support security that it acquired at a significant discount that evidenced credit deterioration at acquisition and is accounted for under ASC Topic 310-30. For a cost of $17,740 the Company acquired the senior support security with a contractual par value of $30,560 and accretable and non-accretable discounts that were projected to be $9,015 and $3,805, respectively. Since acquisition, repayments from the security have been received more rapidly than projected at acquisition, but expected total payments have declined, resulting in a determination that the security was other-than-temporarily impaired. The security had $1,310 other-than temporary loss for six months ended December 31, 2016 and no charge was recorded for the fiscal 2016 year. At December 31, 2016 the security had a remaining contractual par value of zero dollars and amortizable and non-amortizable premium are currently projected to be zero dollars and $1,162, respectively.

The current face amounts of debt securities available-for-sale and held-to-maturity that were pledged to secure borrowings at December 31, 2016 and June 30, 2016 were $19,352 and $39,961 respectively.

22

The securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:

	December 31, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	22,228	$	(327	)	$	2,367	$	(96	)	$	24,595	$	(423	)	$	—	$	—		$	—	$	—		$	—	$	—
Non-agency	9,036		(43		)	26,039		(3,000		)	35,075		(3,043		)	—		—			—		—			—		—
Total RMBS securities	31,264		(370		)	28,406		(3,096		)	59,670		(3,466		)	—		—			—		—			—		—
Other Debt:
Municipal Debt	20,204		(531		)	8,317		(18		)	28,521		(549		)	—		—			—		—			—		—
Non-agency	46,342		(132		)	12,368		(20		)	58,710		(152		)	—		—			—		—			—		—
Total Other Debt	66,546		(663		)	20,685		(38		)	87,231		(701		)	—		—			—		—			—		—
Total debt securities	$	97,810	$	(1,033	)	$	49,091	$	(3,134	)	$	146,901	$	(4,167	)	$	—	$	—		$	—	$	—		$	—	$	—
	June 30, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	—	$	—		$	5,094	$	(23	)	$	5,094	$	(23	)	$	129	$	(1	)	$	—	$	—		$	129	$	(1	)
Non-agency	—		—			—		—			—		—			15,011		(419		)	53,372		(9,625		)	68,383		(10,044		)
Total RMBS securities	—		—			5,094		(23		)	5,094		(23		)	15,140		(420		)	53,372		(9,625		)	68,512		(10,045		)
Other Debt:
Municipal Debt	10,267		(10		)	—		—			10,267		(10		)	—		—			—		—			—		—
Non-agency	5,566		(5		)	16,963		(169		)	22,529		(174		)	—		—			—		—			—		—
Total Other Debt	15,833		(15		)	16,963		(169		)	32,796		(184		)	—		—			—		—			—		—
Total debt securities	$	15,833	$	(15	)	$	22,057	$	(192	)	$	37,890	$	(207	)	$	15,140	$	(420	)	$	53,372	$	(9,625	)	$	68,512	$	(10,045	)

There were 15 securities that were in a continuous loss position at December 31, 2016 for a period of more than 12 months. There were 26 securities that were in a continuous loss position at June 30, 2016 for a period of more than 12 months.

23

The following table summarizes amounts of credit loss recognized in the income statement through other-than-temporary impairment charges which reduced non-interest income:

	For the Three Months Ended						For the Six Months Ended
	December 31,						December 31,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	(20,611	)	$	(20,621	)	$	(20,865	)	$	(20,503	)
Additions for the amounts related to credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			(99		)
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	(1,350		)	(23		)	(1,470		)	(42		)
Credit losses realized for securities sold	5,330			116			5,704			116
Ending balance	$	(16,631	)	$	(20,528	)	$	(16,631	)	$	(20,528	)

At December 31, 2016, non-agency RMBS with a total carrying amount of $48,317 were determined to have cumulative credit losses of $16,631 of which $1,350 was recognized in earnings during the three months ended December 31, 2016. This quarter’s other-than-temporary impairment of $1,350 is related to three non-agency RMBS with a total carrying amount of $7,085. The Company measures its non-agency RMBS in an unrecognized loss position at the end of the reporting period for other-than-temporary impairment by comparing the present value of the cash flows currently expected to be collected from the security with its amortized cost basis. If the calculated present value is lower than the amortized cost, the difference is the credit component of an other-than-temporary impairment of its debt securities. The excess of present value over the fair value of the security (if any) is the non-credit component only if the Company does not intend to sell the security and will not be required to sell the security before recovery of its amortized cost basis. The credit component of the other-than-temporary impairment is recorded as a loss in earnings and the non-credit component as a charge to other comprehensive income, net of the related income tax benefit.

To determine the cash flow expected to be collected and to calculate the present value for purposes of testing for other-than-temporary impairment, the Company utilizes the same industry-standard tool and the same cash flows as those calculated for Level 3 fair values as discussed in Note 3 – Fair Value. The discount rates used to compute the present value of the expected cash flows for purposes of testing for the credit component of the other-than-temporary impairment are either the implicit rate calculated in each of the Company’s securities at acquisition or the last accounting yield. The Company calculates the implicit rate at acquisition based on the contractual terms of the security, considering scheduled payments (and minimum payments in the case of pay-option ARMs) without prepayment assumptions. Once the discount rate (or discount margin in the case of floating rate securities) is calculated as described above, the discount is used in the industry-standard model to calculate the present value of the cash flows.

The gross gains and losses realized through earnings upon the sale of available-for-sale securities for the six months ended December 31, 2016 were as follows:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016			2015		2016			2015
Proceeds	$	95,386		$	10,069	$	121,061		$	10,069
Gross realized gains	5,089			933		6,079			933
Gross realized losses	(3,467		)	—		(3,467		)	—
Net realized gain on securities	$	1,622		$	933	$	2,612		$	933

24

The Company had recorded unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Available-for-sale debt securities—net unrealized gains	$	3,889		$	2,288
Available-for-sale debt securities—non-credit related losses	(7,560		)	(138		)
Held-to-maturity debt securities—non-credit related losses	—			(14,129		)
Subtotal	(3,671		)	(11,979		)
Tax (expense) benefit	1,169			4,675
Net unrealized gain (loss) on investment securities in accumulated other comprehensive income (loss)	$	(2,502	)	$	(7,304	)

The expected maturity distribution including repayments of the Company’s mortgage-backed securities and other debt securities classified as trading, available-for-sale and held-to-maturity at December 31, 2016 were:

	December 31, 2016
	Trading		Available for sale				Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Fair Value		Carrying Amount		Fair Value
RMBS—U.S. agencies:
Due within one year	$	—	$	1,955	$	1,945	$	—	$	—
Due one to five years	—		6,442		6,426		—		—
Due five to ten years	—		5,730		5,730		—		—
Due after ten years	—		19,295		19,163		—		—
Total RMBS—U.S. agencies	—		33,422		33,264		—		—
RMBS—Non-agency:
Due within one year	—		9,004		9,343		—		—
Due one to five years	—		28,435		29,591		—		—
Due five to ten years	—		22,744		23,441		—		—
Due after ten years	—		19,286		19,851		—		—
Total RMBS—Non-agency	—		79,469		82,226		—		—
Other debt:
Due within one year	—		162,740		163,501		—		—
Due one to five years	55		86,301		87,320		—		—
Due five to ten years	291		59		58		—		—
Due after ten years	7,805		13,855		13,365		—		—
Total other debt	8,151		262,955		264,244		—		—
Total	$	8,151	$	375,846	$	379,734	$	—	$	—

25

5. LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES

The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single family real estate secured:
Mortgage	$	3,719,038		$	3,678,520
Home equity	2,412			2,470
Warehouse and other1	480,378			537,714
Multifamily real estate secured	1,451,535			1,373,216
Commercial real estate secured	155,124			121,746
Auto and RV secured	107,430			73,676
Factoring	134,349			98,275
Commercial & Industrial	763,811			514,300
Other	63,441			2,542
Total gross loans and leases	6,877,518			6,402,459
Allowance for loan and lease losses	(40,928		)	(35,826		)
Unaccreted discounts and loan and lease fees	(25,120		)	(11,954		)
Total net loans and leases	$	6,811,470		$	6,354,679

1. The balance of single family warehouse loans was $179,747 at December 31, 2016 and $173,148 at June 30, 2016. The remainder of the balance is attributable to single family lender finance loans.

Allowance for Loan and Lease Losses. We are committed to maintaining the allowance for loan and lease losses (sometimes referred to as the “allowance”) at a level that is considered to be commensurate with estimated probable incurred credit losses in the portfolio. Although the adequacy of the allowance is reviewed quarterly, management performs an ongoing assessment of the risks inherent in the portfolio. While the Company believes that the allowance for loan and lease losses is adequate at December 31, 2016, future additions to the allowance will be subject to continuing evaluation of estimated and known, as well as inherent risks in the loan and lease portfolio.

Allowance for Loan and Lease Loss Disclosures. The assessment of the adequacy of the Company’s allowance for loan and lease losses is based upon a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans and leases, change in volume and mix of loans and leases, collateral values and charge-off history.

The Company provides general loan loss reserves for its automobile (“auto”) and recreational vehicle (“RV”) loans based upon the borrower credit score and the Company’s loss experience to date. The allowance for loan loss for the auto and RV loan portfolio at December 31, 2016 was determined by classifying each outstanding loan according to semi-annually refreshed FICO score and providing loss rates. The Company had $107,214 of auto and RV loan balances subject to general reserves as follows: FICO greater than or equal to 770: $44,551; 715 – 769: $38,248; 700 – 714: $10,740; 660 – 699: $11,824 and less than 660: $1,851.

The Company provides general loan loss reserves for mortgage loans based upon the size and class of the mortgage loan and the loan-to-value ratio (“LTV”) at date of origination. The Company divides the LTV analysis into two classes, separating the purchased loans from the loans underwritten directly by the Company. Based on historical performance, the Company concluded that originated loans require lower estimated loss rates than purchased loans. The allowance for each class is determined by dividing the outstanding unpaid balance for each loan by the loan-to-value and applying a loss rate. The LTV groupings for each significant mortgage class are as follows:

The Company had $3,690,687 of single family mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 60%: $1,946,922; 61% – 70%: $1,348,394; 71% – 80%: $395,171; and greater than 80%: $200.

The Company had $1,446,057 of multifamily mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 55%: $674,726; 56% – 65%: $473,901; 66% – 75%: $284,996; 76% – 80%: $12,434 and greater than 80%: $0.

The Company had $154,892 of commercial real estate loan balances subject to general reserves as follows: LTV less than or equal to 50%: $65,740; 51% – 60%: $36,257; 61% – 70%: $42,558; and 71% – 80%: $10,337.

The Company’s commercial secured portfolio consists of business loans well-collateralized by residential real estate. The Company’s other portfolio consists of receivables factoring for businesses and consumers. The Company allocates its allowance for loan loss for these asset types based on qualitative factors which consider the value of the collateral and the financial position of the issuer of the receivables.

26

The following tables summarize activity in the allowance for loan and lease losses by portfolio classes for the periods indicated:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2016	$	19,483		$	22		$	2,554		$	3,922		$	917		$	1,914		$	294	$	8,411	$	79		$	37,596
Provision for loan and lease loss	601			(16		)	(375		)	(9		)	84			123			45		1,353		2,294			4,100
Charge-offs	(841		)	—			—			—			—			(66		)	—		—		(31		)	(938		)
Recoveries	—			16			—			—			—			46			—		—		108			170
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2015	$	16,313		$	94		$	2,057		$	4,180		$	961		$	1,339		$	342	$	5,663	$	129		$	31,078
Provision for loan and lease loss	911			(60		)	586			(887		)	(895		)	532			17		939		2,257			3,400
Charge-offs	(61		)	(1		)	—			—			—			(56		)	—		—		—			(118		)
Recoveries	4			12			—			—			670			25			—		—		—			711
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071
	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2016	$	18,666		$	23		$	2,685		$	3,938		$	882		$	1,615		$	245	$	7,630	$	142		$	35,826
Provision for loan and lease loss	1,400			(21		)	(506		)	(25		)	142			449			94		2,134		2,333			6,000
Charge-offs	(868		)	—			—			—			(23		)	(139		)	—		—		(133		)	(1,163		)
Recoveries	45			20			—			—			—			92			—		—		108			265
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2015	$	13,664		$	122		$	1,879		$	4,363		$	1,103		$	953		$	292	$	5,882	$	69		$	28,327
Provision for loan and lease loss	3,418			(96		)	764			(1,070		)	(1,349		)	1,029			67		720		2,317			5,800
Charge-offs	(77		)	(2		)	—			—			—			(206		)	—		—		—			(285		)
Recoveries	162			21			—			—			982			64			—		—		—			1,229
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071

27

The following tables present our loans and leases evaluated individually for impairment by class:

	December 31, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	9,954		$	1,517		$	8,437		$	937		$	9,374		$	—
Purchased	5,221			2,074			3,147			114			3,261			—
Multifamily Real Estate Secured:
Purchased	2,492			1,178			1,314			—			1,314			—
Commercial Real Estate Secured:
Purchased	630			398			232			100			332			—
Auto and RV Secured:
In-house originated	673			498			175			12			187			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,376			—			14,376			1			14,377			574
Purchased	2,391			—			2,391			6			2,397			64
Home Equity:
In-house originated	47			—			47			—			47			1
Multifamily Real Estate Secured:
In-house originated	4,164			—			4,164			133			4,297			19
Auto and RV Secured:
In-house originated	41			—			41			5			46			2
Other	445			—			445			—			445			45
Total	$	40,434		$	5,665		$	34,769		$	1,308		$	36,077		$	705
As a % of total gross loans and leases	0.59		%	0.08		%	0.51		%	0.02		%	0.52		%	0.01		%

	June 30, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	8,989		$	727		$	8,262		$	657		$	8,919		$	—
Purchased	5,852			2,132			3,720			110			3,830			—
Multifamily Real Estate Secured:
Purchased	2,520			1,093			1,427			—			1,427			—
Commercial Real Estate Secured:
Purchased	629			375			254			61			315			—
Auto and RV Secured:
In-house originated	902			663			239			10			249			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,696			—			14,696			65			14,761			575
Purchased	1,932			—			1,932			5			1,937			46
Home Equity:
In-house originated	33			—			33			—			33			1
Multifamily Real Estate Secured:
In-house originated	791			—			791			65			856			1
Auto and RV Secured:
In-house originated	39			—			39			4			43			2
Other	676						676			—			676			67
Total	$	37,059		$	4,990		$	32,069		$	977		$	33,046		$	692
As a % of total gross loans and leases	0.58		%	0.08		%	0.50		%	0.02		%	0.52		%	0.01		%

28

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment evaluation method:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	638	$	1	$	—		$	19	$	—	$	2	$	—		$	—	$	45		$	705
Collectively evaluated for impairment	18,605		21		2,179			3,894		1,001		2,015		339			9,764		2,405			40,223
Total ending allowance balance	$	19,243	$	22	$	2,179		$	3,913	$	1,001	$	2,017	$	339		$	9,764	$	2,450		$	40,928
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,351	$	47	$	—		$	5,478	$	232	$	216	$	—		$	—	$	445		$	34,769
Loans and leases collectively evaluated for impairment	3,690,687		2,365		480,378			1,446,057		154,892		107,214		134,349			763,811		62,996			6,842,749
Principal loan and lease balance	3,719,038		2,412		480,378			1,451,535		155,124		107,430		134,349			763,811		63,441			6,877,518
Unaccreted discounts and loan and lease fees	11,693		29		(2,173		)	4,496		812		1,396		(40,115		)	810		(2,068		)	(25,120		)
Accrued interest receivable	8,336		2		1,842			4,541		400		225		219			3,008		533			19,106
Total recorded investment in loans and leases	$	3,739,067	$	2,443	$	480,047		$	1,460,572	$	156,336	$	109,051	$	94,453		$	767,629	$	61,906		$	6,871,504

________________

^1. Loans and leases evaluated for impairment include Troubled Debt Restructurings (“TDRs”) that have been performing for more than six months.

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	621	$	1	$	—		$	1	$	—	$	2	$	—		$	—	$	67		$	692
Collectively evaluated for impairment	18,045		22		2,685			3,937		882		1,613		245			7,630		75			35,134
Total ending allowance balance	$	18,666	$	23	$	2,685		$	3,938	$	882	$	1,615	$	245		$	7,630	$	142		$	35,826
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,610	$	33	$	—		$	2,218	$	254	$	278	$	—		$	—	$	676		$	32,069
Loans and leases collectively evaluated for impairment	3,649,910		2,437		537,714			1,370,998		121,492		73,398		98,275			514,300		1,866			6,370,390
Principal loan and lease balance	3,678,520		2,470		537,714			1,373,216		121,746		73,676		98,275			514,300		2,542			6,402,459
Unaccreted discounts and loan and lease fees	13,142		24		(2,200		)	3,957		542		975		(30,533		)	2,172		(33		)	(11,954		)
Accrued interest receivable	12,460		2		1,870			5,409		389		169		327			2,202		3			22,831
Total recorded investment in loans and leases	$	3,704,122	$	2,496	$	537,384		$	1,382,582	$	122,677	$	74,820	$	68,069		$	518,674	$	2,512		$	6,413,336

________________

^1.Loans and leases evaluated for impairment include TDRs that have been performing for more than six months.

29

Credit Quality Disclosures. Non-performing loans and leases consisted of the following as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	22,814		$	22,958
Purchased	5,331			5,442
Home Equity:
In-house originated	47			33
Multifamily Real Estate Secured:
In-house originated	4,164			791
Purchased	1,314			1,427
Commercial Real Estate Secured:
Purchased	232			254
Total non-performing loans secured by real estate	33,902			30,905
Auto and RV Secured	216			278
Other	445			676
Total non-performing loans and leases	$	34,563		$	31,859
Non-performing loans and leases to total loans and leases	0.50		%	0.50		%

The Company has no loans and leases over 90 days delinquent that are still accruing interest at December 31, 2016. Approximately81.43% of the Company’s non-performing loans and leases are single family first mortgages already written down to 50.55% in aggregate, of the original appraisal value of the underlying properties.

The following tables present the outstanding unpaid balance of loans and leases that are performing and non-performing by portfolio class:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,690,893	$	2,365	$	480,378	$	1,446,057	$	154,892	$	107,214	$	134,349	$	763,811	$	62,996	$	6,842,955
Non-performing	28,145		47		—		5,478		232		216		—		—		445		34,563
Total	$	3,719,038	$	2,412	$	480,378	$	1,451,535	$	155,124	$	107,430	$	134,349	$	763,811	$	63,441	$	6,877,518

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,650,120	$	2,437	$	537,714	$	1,370,998	$	121,492	$	73,398	$	98,275	$	514,300	$	1,866	$	6,370,600
Non-performing	28,400		33		—		2,218		254		278		—		—		676		31,859
Total	$	3,678,520	$	2,470	$	537,714	$	1,373,216	$	121,746	$	73,676	$	98,275	$	514,300	$	2,542	$	6,402,459

30

The Company divides loan balances when determining general loan loss reserves between purchases and originations as follows:

	December 31, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,629,359	$	61,534	$	3,690,893	$	1,356,627	$	89,430	$	1,446,057	$	142,911	$	11,981	$	154,892
Non-performing	22,814		5,331		28,145		4,164		1,314		5,478		—		232		232
Total	$	3,652,173	$	66,865	$	3,719,038	$	1,360,791	$	90,744	$	1,451,535	$	142,911	$	12,213	$	155,124

	June 30, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,578,629	$	71,491	$	3,650,120	$	1,270,379	$	100,619	$	1,370,998	$	109,370	$	12,122	$	121,492
Non-performing	22,958		5,442		28,400		791		1,427		2,218		—		254		254
Total	$	3,601,587	$	76,933	$	3,678,520	$	1,271,170	$	102,046	$	1,373,216	$	109,370	$	12,376	$	121,746

From time to time the Company modifies loan terms temporarily for borrowers who are experiencing financial stress. These loans are performing and accruing and will generally return to the original loan terms after the modification term expires.

Approximately 8.34% of our non-performing loans and leases at December 31, 2016 were considered TDRs, compared to 9.63% at June 30, 2016. Borrowers that make timely payments after TDRs are considered non-performing for at least six months. Generally, after six months of timely payments, those TDRs are reclassified from the non-performing loan and lease category to the performing loan and lease category and any previously deferred interest income is recognized.

The Company classifies these loans as performing loans temporarily modified as TDR and are included in impaired loans and leases as follows:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	206	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	206
Non-performing loans and leases	28,145		47		—		5,478		232		216		—		—		445		34,563
Total impaired loans and leases	$	28,351	$	47	$	—	$	5,478	$	232	$	216	$	—	$	—	$	445	$	34,769
	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	210	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	210
Non-performing loans and leases	28,400		33		—		2,218		254		278		—		—		676		31,859
Total impaired loans and leases	$	28,610	$	33	$	—	$	2,218	$	254	$	278	$	—	$	—	$	676	$	32,069

31

The Company recognizes interest on performing loans temporarily modified as TDR, which is shown in conjunction with average balances as follows:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3
Average balances of performing TDRs	$	207	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	207
Average balances of impaired loans	$	31,855	$	40	$	—	$	5,606	$	232	$	262	$	—	$	—	$	510	$	38,505
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	2	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	2
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,195	$	8	$	—	$	5,064	$	1,045	$	321	$	—	$	—	$	—	$	28,633

	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6
Average balances of performing TDRs	$	208	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	208
Average balances of impaired loans	$	30,773	$	37	$	—	$	4,476	$	239	$	267	$	—	$	—	$	565	$	36,357
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	4
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,483	$	8	$	—	$	5,176	$	1,406	$	365	$	—	$	—	$	—	$	29,438

The Company’s loan modifications primarily included single family, multifamily and commercial loans of which included one or a combination of the following: a reduction of the stated interest rate or delinquent property taxes that were paid by the Bank and either repaid by the borrower over a one year period or capitalized and amortized over the remaining life of the loan. The Company’s loan modifications also included RV loans in which borrowers were able to make interest-only payments for a period of six months to one year which then reverted back to fully amortizing.

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Credit Quality Indicators

The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases based on credit risk. The Company uses the following definitions for risk ratings.

Pass. Loans and leases classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention. Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the institution’s credit position at some future date.

Substandard. Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The Company reviews and grades loans and leases following a continuous review process, featuring coverage of all loan and lease types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.

The following table presents the composition of the Company’s loan and lease portfolio by credit quality indicators:

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	December 31, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,610,703		$	18,656		$	22,814		$	—		$	3,652,173
Purchased	60,879			353			5,633			—			66,865
Home Equity:
In-house originated	2,363			—			49			—			2,412
Warehouse and other:
In-house originated	479,383			—			995			—			480,378
Multifamily Real Estate Secured:
In-house originated	1,353,379			3,248			4,164			—			1,360,791
Purchased	88,392			—			2,352			—			90,744
Commercial Real Estate Secured:
In-house originated	142,911			—			—			—			142,911
Purchased	9,992			1,989			232			—			12,213
Auto and RV Secured:
In-house originated	107,077			100			253			—			107,430
Factoring	134,349			—			—			—			134,349
Commercial & Industrial	763,537			274			—			—			763,811
Other	62,996			—			445			—			63,441
Total	$	6,815,961		$	24,620		$	36,937		$	—		$	6,877,518
As a % of total gross loans and leases	99.1		%	0.4		%	0.5		%	—		%	100.0		%
	June 30, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,563,430		$	10,938		$	27,219		$	—		$	3,601,587
Purchased	71,111			—			5,822			—			76,933
Home Equity:
In-house originated	2,420			17			33			—			2,470
Warehouse and other:
In-house originated	534,868			2,846			—			—			537,714
Multifamily Real Estate Secured:
In-house originated	1,262,384			4,721			4,065			—			1,271,170
Purchased	96,792			2,769			2,485			—			102,046
Commercial Real Estate Secured:
In-house originated	109,370			—			—			—			109,370
Purchased	10,110			2,012			254			—			12,376
Auto and RV Secured:
In-house originated	73,192			97			387			—			73,676
Factoring	98,275			—			—			—			98,275
Commercial & Industrial	513,310			—			990			—			514,300
Other	1,715			151			676			—			2,542
Total	$	6,336,977		$	23,551		$	41,931		$	—		$	6,402,459
As a % of total gross loans and leases	99.0		%	0.4		%	0.6		%	—		%	100.0		%

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The Company considers the performance of the loan and lease portfolio and its impact on the allowance for loan and lease losses. The Company also evaluates credit quality based on the aging status of its loans and leases. The following table provides the outstanding unpaid balance of loans and leases that are past due 30 days or more by portfolio class as of the period indicated:

	December 31, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage:
In-house originated	$	4,523		$	5,356		$	22,787		$	32,666
Purchased	804			165			2,701			3,670
Home equity:
In-house originated	—			—			45			45
Multifamily real estate secured:
In-house originated	576			—			4,164			4,740
Commercial real estate secured:
Purchased	—			—			232			232
Auto and RV secured	477			139			82			698
Other	—			—			445			445
Total	$	6,380		$	5,660		$	30,456		$	42,496
As a % of total gross loans and leases	0.10		%	0.08		%	0.44		%	0.62		%
	June 30, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage
In-house originated	$	5,192		$	1,866		$	21,722		$	28,780
Purchased	572			—			2,538			3,110
Home equity
In-house originated	—			17			29			46
Multifamily real estate secured
In-house originated	3,594			—			791			4,385
Commercial real estate secured
Purchased	—			—			254			254
Auto and RV secured
In-house originated	200			136			104			440
Commercial and industrial	142			—			—			142
Other	62			151			676			889
Total	$	9,762		$	2,170		$	26,114		$	38,046
As a % of total gross loans and leases	0.15		%	0.03		%	0.41		%	0.59		%

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6. SUBORDINATED NOTES AND DEBENTURES

Subordinated Notes. In March 2016, the Company completed the sale of $51,000 aggregate principal amount of its 6.25% Subordinated Notes due February 28, 2026 (the “Notes”). The Company received $51,000 in gross proceeds as a part of this transaction, before the 3.15% underwriting discount and other offering expenses. The Notes mature on February 28, 2026 and accrue interest at a rate of 6.25% per annum, with interest payable quarterly. The Notes may be redeemed on or after March 31, 2021, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions.

Subordinated Debentures. On December 13, 2004, the Company entered into an agreement to form an unconsolidated trust which issued $5,000 of trust preferred securities in a transaction that closed on December 16, 2004. The net proceeds from the offering were used to purchase $5,155 of subordinated debentures (the “Debentures”) of the Company with a stated maturity date of February 23, 2035. The Debentures are the sole assets of the trust. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Debentures in whole, but not in part, on or after specific dates, at a redemption price specified in the indenture plus any accrued but unpaid interest through the redemption date. Interest accrues at the rate of 3 months LIBOR plus 2.4% for a rate of 3.32% as of December 31, 2016, with interest paid quarterly starting February 16, 2005.

7. EQUITY AND STOCK-BASED COMPENSATION

On March 17, 2016, the Board of Directors of the Company, authorized a program to repurchase up to $100 million of common stock. The new share repurchase authorization replaces the previous share repurchase plan approved on July 5, 2005. The Company may repurchase shares on the open market or through privately negotiated transactions at times and prices considered appropriate, at the discretion of the Company, and subject to its assessment of alternative uses of capital, stock trading price, general market conditions and regulatory factors. The repurchase program does not obligate the Company to acquire any specific number of shares. The share repurchase program will continue in effect until terminated by the Board of Directors of the Company.

The Company has two equity incentive plans, the 2014 Stock Incentive Plan (the “2014 Plan”) and the 2004 Stock Incentive Plan (the “2004 Plan” and collectively, the “Plans”), which provide for the granting of non-qualified and incentive stock options, restricted stock and restricted stock units, stock appreciation rights and other awards to employees, directors and consultants. The Plans are designed to encourage selected employees and directors to improve operations and increase profits, and to accept or continue employment or association with the Company through participation in the growth in the value of the common stock. The Plans require that option exercise prices be not less than fair market value per share of common stock on the option grant date for incentive and non-qualified options. The options issued under the Plans generally vest in between three and five years. Option expiration dates are established by the Plans’ administrator but may not be later than ten years after the date of the grant.

2004 Stock Incentive Plan. In October 2004, the Company’s Board of Directors and the stockholders approved the 2004 Plan. In November 2007, the 2004 Plan was amended and approved by the Company’s stockholders. With the stockholders approving the 2014 Plan in October 2014, no further awards will be made under the 2004 Plan and the 2004 Plan will remain in effect only so long as awards made thereunder remain outstanding.

2014 Stock Incentive Plan. In September and October 2014, the Company’s Board of Directors and stockholders approved the 2014 Plan, respectively. The maximum number of shares of common stock available for issuance under the 2014 Plan is 3,680,000.

Stock Options. At December 31, 2016 and June 30, 2016 there were no outstanding stock options and all expense related to stock option grants has been fully recognized.

Restricted Stock and Restricted Stock Units. Employees and directors are eligible to receive grants of restricted stock and restricted stock units. The Company determines stock-based compensation expense using the fair value method. The fair value of restricted stock and restricted stock units is equal to the closing sale price of the Company’s common stock on the date of grant.

During the six months ended December 31, 2016 and 2015, the Company granted 804,518 and 614,721 restricted stock units, to employees and directors, respectively. Restricted stock unit awards (“RSUs”) granted during these quarters generally vest over three years, one-third on each anniversary date, except for any RSUs granted to our CEO, which vest one-fourth on each fiscal year end.

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The Company’s income before income taxes and net income for the three months ended December 31, 2016 and December 31, 2015 include stock award expense of $3,413 and $2,858, with total income tax benefit of $1,432 and $1,201, respectively. For the six months ended December 31, 2016 and December 31, 2015 stock award expense was $6,450 and $5,116, with total income tax benefit of $2,705 and $2,137, respectively. The Company recognizes compensation expense based upon the grant-date fair value divided by the vesting and the service period between each vesting date. At December 31, 2016, unrecognized compensation expense related to non-vested awards aggregated to $29,216 and is expected to be recognized in future periods as follows:

(Dollars in thousands)	Stock Award Compensation Expense
For the fiscal year remainder:
2017	$	7,291
2018	11,905
2019	7,692
2020	2,328
Total	$	29,216

The following table presents the status and changes in restricted stock unit grants for the periods indicated:

	Restricted Stock Unit Shares		Weighted-Average Grant-Date Fair Value
Non-vested balance at June 30, 2015	1,135,088		$	17.01
Granted	615,834		26.60
Vested	(536,528	)	16.14
Canceled	(154,668	)	18.70
Non-vested balance at June 30, 2016	1,059,726		$	22.53
Granted	804,518		20.80
Vested	(247,875	)	20.29
Canceled	(45,566	)	19.11
Non-vested balance at December 31, 2016	1,570,803		$	22.1

The total fair value of shares vested for the three and six months ended December 31, 2016 was $2,293 and $5,289. The total fair value of shares vested for the three and six months ended December 31, 2015 was $1,655 and $7,147.

8. EARNINGS PER SHARE (“EPS”)

Basic EPS excludes dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted to common stock that would then share in the Company’s earnings.

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The following table presents the calculation of basic and diluted EPS:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands, except per share data)	2016			2015			2016			2015
Earnings Per Common Share
Net income	$	32,300		$	28,149		$	61,197		$	53,650
Preferred stock dividends	(78		)	(78		)	(155		)	(155		)
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	63,341,437			62,999,335			63,312,805			62,741,596
Average unvested RSU shares	1,520,103			1,431,998			1,412,167			1,309,243
Total qualifying shares	64,861,540			64,431,333			64,724,972			64,050,839
Earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84
Diluted Earnings Per Common Share
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Dilutive net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	64,861,540			64,431,333			64,724,972			64,050,839
Dilutive effect of stock options	—			1,323			—			10,982
Total dilutive common shares issued and outstanding	64,861,540			64,432,656			64,724,972			64,061,821
Diluted earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84

9. COMMITMENTS AND CONTINGENCIES

Credit-Related Financial Instruments. The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.

At December 31, 2016, the Company had commitments to originate $66,298 in fixed rate loans and leases and $538,485 in variable rate loans, totaling an aggregate outstanding principal balance of $604,783. Our fixed rate loan and lease commitments to originate had rates ranging from 2.50% to 5.59%. At December 31, 2016, the Company also had commitments to sell $74,494 in fixed rate loans and $3,438 in variable rate loans, totaling an aggregate outstanding principal balance of $77,932.

Commitments to extend credit are agreements to lend to a customer so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Litigation. On October 15, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Golden v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Golden Case”). On November 3, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a second putative class action lawsuit styled Hazan v. BofI Holding, Inc., et al, and also brought in the United States District Court for the Southern District of California (the “Hazan Case”). On February 1, 2016, the Golden Case and the Hazan Case were consolidated as In re BofI Holding, Inc. Securities Litigation, Case #: 3:15-cv-02324-GPC-KSC (the “Class Action”), and the Houston Municipal Employees Pension System was appointed lead plaintiff. The Class Action complaint was amended by a certain Consolidated Amended Class Complaint filed on April 11, 2016. The Class Action plaintiff seeks monetary damages and other relief on behalf of a putative class that has not been certified by the Court.

The complaints filed in the Golden Case and the Hazan Case both allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose the wrongful conduct that is alleged in a complaint that was filed in a wrongful termination of employment lawsuit (the “Employment Matter”), and that as a result the Company’s statements regarding its internal controls, as well as portions of its financial statements, were false and misleading. The Company and the other named defendants dispute the allegations of wrongdoing advanced by the plaintiffs

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in the Class Action and in the Employment Matter, as well as those plaintiffs’ statement of the underlying factual circumstances, and are vigorously defending both cases.

In addition to the Class Action, two separate shareholder derivative actions were filed in December, 2015, purportedly on behalf of the Company. The first derivative action, Calcaterra v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on December 3, 2015. The second derivative action, Dow v. Micheletti, et al, was filed in the San Diego County Superior Court on December 16, 2015. A third derivative action, DeYoung v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 22, 2016, a fourth derivative action, Yong v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 29, 2016, and a fifth derivative action, Laborers Pension Trust Fund of Northern Nevada v. Allrich et al, was filed in the United States District Court for the Southern District of California on February 2, 2016. Each of these five derivative actions names the Company as a nominal defendant, and certain of its officers and directors as defendants. Each complaint sets forth allegations of breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment against the defendant officers and directors. The plaintiffs in these derivative actions seek damages in unspecified amounts on the Company’s behalf from the officer and director defendants, certain corporate governance actions, and an award of their costs and attorney’s fees. On June 9, 2016, the United States District Court for the Southern District of California ordered the four above-referenced cases pending before it to be consolidated, appointed lead counsel in the consolidated action, and ordered the parties to meet and confer regarding a schedule for the filing of a consolidated complaint and defendants’ response to the complaint. Pursuant to the June 9, 2016 order, counsel have met and conferred regarding proposals for (a) the time for plaintiffs to file a consolidated complaint or provide notice of plaintiffs’ intent to rely upon the original Complaint in Case No. 3:15-cv-02722-GPC-KSC (the “operative complaint”); (b) the time for defendants to respond to the operative complaint; and (c) a schedule for briefing any motion to dismiss that may be filed by a defendant. A stipulation setting forth the agreed litigation schedule has been submitted to the Court. The fifth derivative action, which is pending before the San Diego County Superior Court, has been stayed by agreement of the parties. On September 27, 2016, the Court dismissed the Class Action, with leave to amend, as to defendants Andrew Micheletti, Paul Grinberg, Nicholas Mosich and James Argalas. The Court denied the Motion to Dismiss with respect to the Company and Gregory Garrabrants. The Company and the other defendants dispute the allegations of wrongdoing and are vigorously defending these purported derivative actions. On November 25, 2016, the putative class action plaintiff filed a Second Amended Class Action Complaint, which includes the previously dismissed defendants. On December 23, 2016, the Company and other defendants filed a motion to dismiss such Second Amended Class Action Complaint.

10. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has granted related party loans collateralized by real property to principal officers, directors and their affiliates that are considered to be insiders by regulation. There were no new related party loans granted under the provisions of the employee loan program and no refinances of existing loans during the six months ended December 31, 2016, and no new loans and no refinances of existing loans during the six months ended December 31, 2015. One of the existing related party loans had a rate modification and term extension, but no change in amount of credit extended during the six months ended December 31, 2016.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion provides information about the results of operations, financial condition, liquidity, off balance sheet items, contractual obligations and capital resources of BofI Holding, Inc. and subsidiary (the “Company”). This information is intended to facilitate the understanding and assessment of significant changes and trends related to our financial condition and the results of our operations. This discussion and analysis should be read in conjunction with our financial information in our Annual Report on Form 10-K for the year ended June 30, 2016, and the interim unaudited condensed consolidated financial statements and notes thereto contained in this report.

Some matters discussed in this report may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and as such, may involve risks and uncertainties. These forward-looking statements can be identified by the use of terminology such as “estimate,” “project,” “anticipate,” “expect,” “intend,” “believe,” “will,” or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. These forward-looking statements relate to, among other things, expectations of the environment in which we operate and projections of future performance. Forward-looking statements are inherently unreliable and actual results may vary. Factors that could cause actual results to differ from these forward-looking statements include changes in the interest rate environment, economic conditions, changes in the competitive marketplace, risks associated with credit quality, the outcome and effects of pending class action litigation filed against the Company and other risk factors discussed under the heading “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2016, which has been filed with the Securities and Exchange Commission and “Item 1A. Risk Factors” of this Quarterly Report on Form 10-Q for the quarter ended December 31, 2016. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All written and oral forward-looking statements made in connection with this report, which are attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing information.

General

Our Company is the holding company for BofI Federal Bank (the “Bank”), a diversified financial services company with approximately $8.2 billion in assets that provides consumer and business banking products through its branchless, low-cost distribution channels and affinity partners. The Bank has deposit and loan and lease customers nationwide including consumer and business checking, savings and time deposit accounts and financing for single family and multifamily residential properties, small-to-medium size businesses in target sectors, and selected specialty finance receivables. The Bank generates fee income from consumer and business products including fees from loans originated for sale and transaction fees earned from processing payment activity. BofI Holding, Inc.’s common stock is listed on the NASDAQ Global Select Market and is a component of the Russell 2000^® Index, the S&P SmallCap 600^® Index and the KBW Nasdaq Financial Technology Index.

Our Bank is a federal savings bank wholly-owned by our Company and regulated by the Office of the Comptroller of the Currency (“OCC”). Our Company is a unitary savings and loan holding company regulated by the Board of Governors of the Federal Reserve System.

We distribute our deposit products through a wide range of retail distribution channels, and our deposits consist of demand, savings and time deposits accounts. We distribute our loan products through our retail, correspondent and wholesale channels, and the loans we retain are primarily first mortgages secured by single family real property and by multifamily real property. Our mortgage-backed securities consist primarily of mortgage pass-through securities issued by government-sponsored entities and non-agency collateralized mortgage obligations and pass-through mortgage-backed securities issued by private sponsors. We believe our flexibility to adjust our asset generation channels has been a competitive advantage allowing us to avoid markets and products where credit fundamentals are poor.

Mergers and Acquisitions

From time to time we undertake acquisitions or similar transactions consistent with the Bank’s operating and growth strategies. During the six months ended December 31, 2016, there were no such transactions. During fiscal 2016, there were two transactions, which are discussed below.

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H&R Block Bank Deposit Acquisition and Program Management Agreement

On August 31, 2015, our Bank completed the acquisition of approximately $419 million in deposits consisting of checking, individual retirement savings, and CD accounts from H&R Block Bank and its parent company, H&R Block, Inc. (“H&R Block”). In connection with the closing of this transaction: (i) our Bank and Emerald Financial Services, LLC, a Delaware limited liability company and wholly-owned subsidiary of H&R Block (“EFS”), entered into the Program Management Agreement (“PMA”), dated August 31, 2015; (ii) our Bank and H&R Block, EFS, HRB Participant I, LLC, a Delaware limited liability company and wholly-owned subsidiary of H&R Block, entered into the Emerald Receivables Participation Agreement, dated August 31, 2015; and (iii) our Bank and H&R Block entered into the Guaranty Agreement (together, the “PMA and related Agreements”), dated August 31, 2015. Through the PMA and related Agreements our Bank provides H&R Block-branded financial services products and services. The products and services that represent the primary focus and the majority of transactional volume that our Bank processes are described in detail below.

The first product is Emerald Prepaid MasterCard® services, which is under Schedule A of the PMA. Our Bank is responsible for the primary oversight and control of the prepaid card programs of a wholly-owned subsidiary of H&R Block. Under the PMA and related Agreements, our Bank holds the prepaid card customer deposits for those cards issued under the prepaid programs in non-interest bearing accounts and earns a fixed fee paid by H&R Block’s subsidiary for each automated clearing house (“ACH”) transaction processed through the prepaid card customer accounts. A portion of H&R Block’s customers use the Emerald Card as an option to receive federal and state income tax refunds. The prepaid customer deposits are included in non-interest bearing deposit liabilities on our balance sheet and the ACH fee income is included in our income statement under the line banking service fees and other income.

The second product is Refund Transfer, which is under Schedule B of the PMA. Our Bank is responsible for the primary oversight and control of the refund transfer program of a wholly-owned subsidiary of H&R Block. Under the PMA and related Agreements, our Bank opens a temporary bank account for each H&R Block customer who is receiving an income tax refund and elects to defer payment of his or her tax preparation fees. After the Internal Revenue Service and any state income tax authorities transfer the refund into the customer’s account, the net funds are transferred to the customer and the temporary deposit account is closed. Our Bank earns a fixed fee paid by H&R Block for each of the H&R Block customers electing a Refund Transfer. The fees are earned primarily in the quarters ending March 31st and are included in our income statement under the line banking service fees and other income.

The third product is Emerald Advance, which is under Schedule C of the PMA. Our Bank is responsible for the underwriting guidelines and credit policies for unsecured consumer lines of credit offered to H&R Block customers. Under the PMA and related Agreements, our Bank offers and funds unsecured lines of credit to consumers primarily through the H&R Block tax preparation offices and earns interest income and fee income. Our Bank retains 10% of the Emerald Advance and sells the remainder to H&R Block. The lines of credit are included in loans and leases on our balance sheet and the interest income and fee income are included in our income statement under the line loans and leases interest and dividend income.

The fourth product is an Individual Retirement Account (“IRA”). Our Bank entered into agreements to offer this product in August 2015 and the initial offering of this product through H&R Block offices occurs in conjunction with the tax season ending April 18, 2017. Our Bank is responsible for the primary oversight and control of the IRA product. During a tax preparation session with an H&R Block tax preparer, the customer is given an option to open a traditional IRA or Roth IRA savings account with our Bank. If the customer elects the option to open an account and meets our Bank’s requirements, an account is opened on our Bank’s core operating system under our Bank’s oversight and control. The customer has the option to deposit funds for the IRA through check or ACH. Our Bank provides IRA custodial services, earns a nominal fee paid by the customers for any account closures or transfers out, and pays customers interest based on their IRA balance. The fees are included in our income statement under the line banking service fees and other income and interest paid is included under the line deposit interest expense.

The fifth product is an interest-free Refund Advance loan. Our Bank entered into agreements to offer this product in October 2016. Under the agreements our Bank will perform disbursement and repayment services and provide funding for interest-free Refund Advance loans to H&R Block customers. Our Bank, in conjunction with its agreement partners, offers and funds interest-free loans to consumers, secured by the consumer’s tax refund receivable, primarily through the H&R Block tax preparation offices and earnsfee income from H&R Block. The average life of the Refund Advance loan is expected to be ten days. Our Bank retains the Refund Advance loans that it funds and will be included in loans and leases on our balance sheet and the fee income will be included in our income statement under the line banking service fees and other income.

The H&R Block-branded financial services products introduce seasonality into the unaudited condensed consolidated income statements through the banking and service fees category of non-interest income and the other general and administrative category of non-interest expense, with the peak income and expense in these categories typically occurring during our third fiscal quarter ending March 31.

41

Pacific Western Equipment Finance Asset Acquisition

On March 31, 2016, our Bank entered into an Asset Purchase Agreement with Pacific Western Bank to acquire approximately $140 million of equipment leases from Pacific Western Equipment Finance and assumed certain insignificant operations and related liabilities. The purchase price and total consideration paid for the assets consisted of the fair market value of the assumed liabilities plus a lease purchase price premium of approximately 2.5%.

Critical Accounting Policies

The following discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements and the notes thereto, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make a number of estimates and assumptions that affect the reported amounts and disclosures in the consolidated financial statements. On an ongoing basis, we evaluate our estimates and assumptions based upon historical experience and various factors and circumstances. We believe that our estimates and assumptions are reasonable under the circumstances. However, actual results may differ significantly from these estimates and assumptions that could have a material effect on the carrying value of assets and liabilities at the balance sheet dates and our results of operations for the reporting periods.

Our significant accounting policies and practices are described in greater detail in Note 1 to our June 30, 2016 audited consolidated financial statements and under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” contained in our Annual Report on Form 10-K filed with the Securities and Exchange Commission for the fiscal year end June 30, 2016.

Use of Non-GAAP Financial Measures

In addition to the results presented in accordance with GAAP, this report includes non-GAAP financial measures such as adjusted earnings. We define net income without the after-tax impact of realized and unrealized securities gains and losses as adjusted earnings (“adjusted earnings”), a non-GAAP measurement, which we believe provides useful information about the Bank’s operating performance. Excluding the securities gains and losses provides investors with an understanding of our Bank’s core lending and mortgage banking business. Non-GAAP financial measures have inherent limitations, are not required to be uniformly applied and are not audited. Readers should be aware of these limitations and should be cautious as to their use of such measures. Although we believe the non-GAAP financial measures disclosed in this report enhance investors’ understanding of its business and performance, these non-GAAP measures should not be considered in isolation, or as a substitute for GAAP basis financial measures.

42

SELECTED FINANCIAL DATA

The following tables set forth certain selected financial data concerning the periods indicated:

BOFI HOLDING, INC. AND SUBSIDIARY

SELECTED CONSOLIDATED FINANCIAL INFORMATION

	December 31, 2016			June 30, 2016			December 31, 2015
Selected Balance Sheet Data:
Total assets	$	8,167,876		$	7,599,304		$	6,662,215
Loans and leases—net of allowance for loan and lease losses	6,811,470			6,354,679			5,645,272
Loans held for sale, at fair value	33,990			20,871			24,730
Loans held for sale, lower of cost or fair value	15,905			33,530			65,429
Allowance for loan and lease losses	40,928			35,826			35,071
Securities—trading	8,151			7,584			7,706
Securities—available-for-sale	379,734			265,447			228,389
Securities—held-to-maturity	—			199,174			215,963
Total deposits	6,610,674			6,044,051			5,199,966
Securities sold under agreements to repurchase	35,000			35,000			35,000
Advances from the FHLB	665,000			727,000			758,000
Subordinated notes and debentures and other	56,408			56,016			5,155
Total stockholders’ equity	753,671			683,590			613,330
Capital Ratios:
Equity to assets at end of period	9.23		%	8.99		%	9.21		%
BofI Holding, Inc:
Tier 1 leverage (core) capital to adjusted average assets	9.71		%	9.12		%	9.75		%
Common equity tier 1 capital (to risk-weighted assets)	14.51		%	14.42		%	14.86		%
Tier 1 capital (to risk-weighted assets)	14.61		%	14.53		%	14.98		%
Total capital (to risk-weighted assets)	16.39		%	16.36		%	15.83		%
BofI Federal Bank:
Tier 1 leverage (core) capital to adjusted average assets	9.36		%	8.78		%	9.34		%
Common equity tier 1 capital (to risk-weighted assets)	14.08		%	14.00		%	14.36		%
Tier 1 capital (to risk-weighted assets)	14.08		%	14.00		%	14.36		%
Total capital (to risk-weighted assets)	14.88		%	14.75		%	15.20		%

43

BOFI HOLDING, INC. AND SUBSIDIARY

SELECTED CONSOLIDATED FINANCIAL INFORMATION

	At or for the Three Months Ended						At or for the Six Months Ended
	December 31,						December 31,
	2016			2015			2016			2015
Selected Income Statement Data:
Interest and dividend income	$	94,301		$	75,935		$	181,781		$	147,164
Interest expense	17,940			12,764			35,640			24,865
Net interest income	76,361			63,171			146,141			122,299
Provision for loan and lease losses	4,100			3,400			6,000			5,800
Net interest income after provision for loan and lease losses	72,261			59,771			140,141			116,499
Non-interest income	16,700			16,220			31,432			26,009
Non-interest expense	33,300			27,445			66,178			50,363
Income before income tax expense	55,661			48,546			105,395			92,145
Income tax expense	23,361			20,397			44,198			38,495
Net income	$	32,300		$	28,149		$	61,197		$	53,650
Net income attributable to common stock	$	32,222		$	28,071		$	61,042		$	53,495
Per Share Data:
Net income:
Basic	$	0.50		$	0.44		$	0.94		$	0.84
Diluted	$	0.50		$	0.44		$	0.94		$	0.84
Book value per common share	$	11.82		$	9.65		$	11.82		$	9.65
Tangible book value per common share	$	11.72		$	9.60		$	11.72		$	9.60
Weighted average number of shares outstanding:
Basic	64,861,540			64,431,333			64,724,972			64,050,839
Diluted	64,861,540			64,432,656			64,724,972			64,061,821
Common shares outstanding at end of period	63,359,001			63,029,161			63,359,001			63,029,161
Common shares issued at end of period	64,761,369			64,142,556			64,761,369			64,142,556
Performance Ratios and Other Data:
Loan and lease originations for investment	$	1,071,713		$	990,948		$	1,996,883		$	1,816,020
Loan originations for sale	$	609,361		$	632,162		$	844,456		$	904,453
Loan and lease purchases	$	—		$	384		$	—		$	384
Return on average assets	1.66		%	1.77		%	1.60		%	1.73		%
Return on average common stockholders’ equity	17.49		%	18.81		%	17.05		%	18.55		%
Interest rate spread1	3.82		%	3.96		%	3.71		%	3.92		%
Net interest margin2	4.00		%	4.10		%	3.89		%	4.07		%
Efficiency ratio	35.78		%	34.57		%	37.27		%	33.96		%
Asset Quality Ratios:
Net annualized charge-offs to average loans and leases	0.05		%	(0.04		)%	0.03		%	(0.04		)%
Non-performing loans and leases to total loans and leases	0.50		%	0.46		%	0.50		%	0.46		%
Non-performing assets to total assets	0.43		%	0.40		%	0.43		%	0.40		%
Allowance for loan and lease losses to total loans and leases at end of period	0.60		%	0.61		%	0.60		%	0.61		%
Allowance for loan and lease losses to non-performing loans and leases	118.42		%	132.45		%	118.42		%	132.45		%

_________________________

^1.   Interest rate spread represents the difference between the annualized weighted average yield on interest-earning assets and the annualized weighted average

rate paid on interest-bearing liabilities.

^2.  Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

44

RESULTS OF OPERATIONS

Comparison of the Three and Six Months EndedDecember 31, 2016 and 2015

For the three months ended December 31, 2016, we had net income of $32.3 million compared to net income of $28.1 million for the three months ended December 31, 2015. Net income attributable to common stockholders was $32.2 million or $0.50 per diluted share for the three months ended December 31, 2016 compared to net income attributable to common shareholders of $28.1 million or $0.44 per diluted share for the three months ended December 31, 2015.For the six months ended December 31, 2016, we had net income of $61.2 million compared to net income of $53.7 million for the six months ended December 31, 2015. Net income attributable to common stockholders was $61.0 million or $0.94 per diluted share for the six months ended December 31, 2016 compared to net income attributable to common shareholders of $53.5 million or $0.84 per diluted share for the six months ended December 31, 2015.

Other key comparisons between our operating results for the three and six months ended December 31, 2016 and 2015 are as follows:

• Net interest income increased $13.2 million and $23.8 million due to a 24.0% and 24.9% increase in average earning assets in the three and six months ended December 31, 2016, respectively. These increases were primarily the result of growth in our loan and lease portfolio and an increased FHLB dividend received in the three and six months ended December 31, 2016 compared to December 31, 2015. The overall rate on interest earning assets was increased by 1 basis point and lower by 5 basis points for the three and six months ended December 31, 2016 compared to December 31, 2015, respectively. Average rates paid on interest-bearing liabilities increased 15 basis points and 16 basis points for the three and six months ended December 31, 2016 compared to December 31, 2015, respectively. The change in the mix between interest-bearing deposits and borrowings and addition of $51 million of 6.25% subordinated notes were the primary reason for the increase in average rates paid for the three and six months ended December 31, 2016 compared to December 31, 2015.

• Non-interest income increased$0.5 million and $5.4 million for the three and six months ended December 31, 2016 compared to the three and six months ended December 31, 2015, respectively. The $0.5 millionincrease in non-interest income for the three months ended December 31, 2016, was the result of an increase in banking service fees and other income of $2.2 million primarily from increased fees related to individual retirement accounts (“IRAs”), an increase in mortgage banking income of $1.9 million and an increase in realized gain on securities of $0.7 million, partially offset by a decrease in gain on sale – other income of $3.5 million primarily from reduced sales of structured settlements. The $5.4 millionincrease in non-interest income for the six months ended December 31, 2016, was primarily the result of a $5.2 million increase in mortgage banking, a $4.4 million increase in banking service fees primarily due to increased fees related to IRAs and a $1.7 million increase in realized gain on securities, partially offset by a $5.5 million decrease in gain on sale – other income, primarily from reduced sales of structured settlements.

• Non-interest expense increased$5.9 million and $15.8 million for the three and six months ended December 31, 2016 compared to the three and six months ended December 31, 2015, respectively. For the three months ended December 31, 2016 compared to the three months ended December 31, 2015 salaries and related expenses increased$3.5 million primarily due to the overall increase in staff to support the overall growth of the Bank. Data processing and internet expense increased $0.6 million due to development of and updates to our core system and increased bank customers. Other general and administrative costs increased by $0.6 million primarily attributable to expenses in support of seasonal H&R Block-branded products and services. For the six months ended December 31, 2016 compared to the six months ended December 31, 2015 salaries and related expenses increased $8.6 million primarily due to the overall increase in staff to support the overall growth of the Bank. Data processing and internet expense increased $1.9 million due to core system updates and development and increased bank customers. Advertising and promotional expense increased $1.3 million primarily related to increased lead generation costs and other general and administrative costs increased by $1.1 million primarily attributable to expenses in support of seasonal H&R Block-branded products and services.

45

Non-GAAP adjusted earnings for the three months ended December 31, 2016 and 2015 were $31.9 million and $27.7 million, respectively. For the six months ended December 31, 2016 and 2015 non-GAAP adjusted earnings were $60.2 million and $53.3 million, respectively.

Below is a reconciliation of net income to non-GAAP adjusted earnings:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands)	2016			2015			2016			2015
Net Income	$	32,300		$	28,149		$	61,197		$	53,650
Realized securities losses (gains)	(1,622		)	(933		)	(2,612		)	(933		)
Unrealized securities losses (gains)	894			219			903			267
Tax (provision) benefit	306			300			717			278
Non-GAAP adjusted earnings1	$	31,878		$	27,735		$	60,205		$	53,262

^1. The non-GAAP adjusted earnings calculation does not exclude FHLB special dividends due to their repeated occurrence.

Net Interest Income

Net interest income for the three and six months ended December 31, 2016 totaled $76.4 million and $146.1 million, an increase of 20.9% and 19.5%, compared to net interest income of $63.2 million and $122.3 million for the three and six months ended December 31, 2015. The growth of net interest income for both the three and six months ended December 31, 2016 is primarily due to net loan and lease portfolio growth.

Total interest and dividend income during the three and six months ended December 31, 2016 increased 24.2% to $94.3 million and and 23.5% to $181.8 million, respectively, compared to $75.9 million and $147.2 million during the three and six months ended December 31, 2015. The increases in interest and dividend income for the three and six months ended December 31, 2016 was primarily attributable to growth in average earning assets from loan originations, primarily in the commercial & industrial and H&R Block-branded loan products and an increased FHLB dividend received. The average balance of loans and leases increased 22.4% and 23.6% for the three and six months ended December 31, 2016 compared to the three and six months ended December 31, 2015. The increase in interest income on loans and leases was partially offset by the increased volume and rates in interest-bearing deposits balances.

Total interest expense was $17.9 million and $35.6 million for the three and six months ended December 31, 2016, an increase of $5.2 million or 40.6% and of $10.8 million or 43.3% as compared with the three and six months ended December 31, 2015, respectively. The average funding rate for the three and six months ended December 31, 2016 compared to the same 2015 periods increased by 15 basis points and 16 basis points while average interest-bearing liabilities grew 22.0% and 23.1%, respectively. The increases for the three and six months ended December 31, 2016 were due to increased balances and rates of subordinated notes and deposits as well as increased rates on advances from the FHLB. Increased balances and rates of time deposits also resulted in an increased average duration from 3.6 years at December 31, 2015 to 4.0 years at December 31, 2016. The average non-interest-bearing demand deposits were $598.2 million and $481.3 million for the three months ended December 31, 2016 and 2015, respectively, representing an increase of $116.9 million. The average non-interest-bearing demand deposits were $572.4 million and $426.1 million for the six months ended December 31, 2016 and 2015, respectively, representing an increase of $146.3 million.

Net interest margin, defined as annualized net interest income divided by average earning assets, decreased by 10 basis points to 4.00% and decreased by 18 basis points to 3.89% for the three and six months ended December 31, 2016, respectively. The net interest margins of 4.00% and 3.89% for the three and six months ended December 31, 2016 were primarily the result of the above discussed changes in the overall cost of funds, respectively.

46

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin for the three months ended December 31, 2016 and 2015:

	For the Three Months Ended
	December 31,
	2016						2015
(Dollars in thousands)	Average Balance1		Interest Income/ Expense		Average Yields Earned/Rates Paid2		Average Balance1		Interest Income/ Expense		Average Yields Earned/Rates Paid2
Assets:
Loans and leases3, 4	$	6,683,192	$	85,839	5.14	%	$	5,460,764	$	70,117	5.14	%
Interest-earning deposits in other financial institutions	435,574		562		0.52	%	201,799		186		0.37	%
Mortgage-backed and other investment securities4	458,501		4,814		4.20	%	428,270		4,274		3.99	%
Stock of the FHLB, at cost	54,008		3,086		22.86	%	65,111		1,358		8.34	%
Total interest-earning assets	7,631,275		94,301		4.94	%	6,155,944		75,935		4.93	%
Non-interest-earning assets	152,679						218,511
Total assets	$	7,783,954					$	6,374,455
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	4,736,597	$	8,177	0.69	%	$	3,582,481	$	5,577	0.62	%
Time deposits	1,021,441		5,834		2.28	%	777,262		4,132		2.13	%
Securities sold under agreements to repurchase	35,000		391		4.47	%	35,000		392		4.48	%
Advances from the FHLB	546,500		2,605		1.91	%	842,174		2,626		1.25	%
Subordinated notes and debentures and other	56,453		933		6.61	%	5,155		37		2.87	%
Total interest-bearing liabilities	6,395,991		17,940		1.12	%	5,242,072		12,764		0.97	%
Non-interest-bearing demand deposits	598,202						481,282
Other non-interest-bearing liabilities	47,763						49,128
Stockholders’ equity	741,998						601,973
Total liabilities and stockholders’ equity	$	7,783,954					$	6,374,455
Net interest income			$	76,361					$	63,171
Interest rate spread5					3.82	%					3.96	%
Net interest margin6					4.00	%					4.10	%

 __________________________

^1.  Average balances are obtained from daily data.

^2.  Annualized.

^3.  Loans and leases include loans held for sale, loan premiums and unearned fees.

^4.  Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include $30.4 million and $31.1 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2016 and 2015 three-month periods, respectively.

^5.  Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

^6.  Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

47

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table presents information regarding (i) average balances; (ii) the total amount of interest income from interest-earning assets and the weighted average yields on such assets; (iii) the total amount of interest expense on interest-bearing liabilities and the weighted average rates paid on such liabilities; (iv) net interest income; (v) interest rate spread; and (vi) net interest margin for the six months ended December 31, 2016 and 2015:

	For the Six Months Ended
	December 31,
	2016						2015
(Dollars in thousands)	Average Balance1		Interest Income/ Expense		Average Yields Earned/Rates Paid2		Average Balance1		Interest Income/ Expense		Average Yields Earned/Rates Paid2
Assets:
Loans and leases3, 4	$	6,581,086	$	166,458	5.06	%	$	5,323,515	$	135,195	5.08	%
Interest-earning deposits in other financial institutions	413,633		1,076		0.52	%	217,980		328		0.30	%
Mortgage-backed and other investment securities4	462,595		9,916		4.29	%	409,918		8,387		4.09	%
Stock of the FHLB, at cost	54,532		4,331		15.88	%	64,336		3,254		10.12	%
Total interest-earning assets	7,511,846		181,781		4.84	%	6,015,749		147,164		4.89	%
Non-interest-earning assets	157,969						176,466
Total assets	$	7,669,815					$	6,192,215
Liabilities and Stockholders’ Equity:
Interest-bearing demand and savings	$	4,538,859	$	15,956	0.70	%	$	3,399,845	$	10,739	0.63	%
Time deposits	1,039,449		11,569		2.23	%	782,096		7,993		2.04	%
Securities sold under agreements to repurchase	35,000		758		4.33	%	35,000		781		4.46	%
Advances from the FHLB	649,380		5,469		1.68	%	909,457		5,278		1.16	%
Subordinated notes and debentures and other	56,325		1,888		6.70	%	5,155		74		2.87	%
Total interest-bearing liabilities	6,319,013		35,640		1.13	%	5,131,553		24,865		0.97	%
Non-interest-bearing demand deposits	572,420						426,128
Other non-interest-bearing liabilities	57,342						52,759
Stockholders’ equity	721,040						581,775
Total liabilities and stockholders’ equity	$	7,669,815					$	6,192,215
Net interest income			$	146,141					$	122,299
Interest rate spread5					3.71	%					3.92	%
Net interest margin6					3.89	%					4.07	%

 __________________________

^1.  Average balances are obtained from daily data.

^2.  Annualized.

^3.  Loans and leases include loans held for sale, loan premiums and unearned fees.

^4.  Interest income includes reductions for amortization of loan and investment securities premiums and earnings from accretion of discounts and loan fees. Loans and leases include $30.5 million and $31.2 million of Community Reinvestment Act loans which are taxed at a reduced rate for the 2016 and 2015six-month periods, respectively.

^5.  Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate paid on interest-bearing liabilities.

^6.  Net interest margin represents annualized net interest income as a percentage of average interest-earning assets.

48

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table sets forth the effects of changing rates and volumes on our net interest income. Information is provided with respect to (i) effects on interest income and interest expense attributable to changes in volume (changes in volume multiplied by prior rate); (ii) effects on interest income and interest expense attributable to changes in rate (changes in rate multiplied by prior volume); and (iii) changes in rate/volume (change in rate multiplied by change in volume) for the three and six months ended December 31, 2016 and 2015:

	For the Three Months Ended												For the Six Months Ended
	December 31, 2016												December 31, 2016
	2016 vs 2015												2016 vs 2015
	Increase (Decrease) Due to												Increase (Decrease) Due to
(Dollars in thousands)	Volume			Rate			Rate/Volume			Total Increase (Decrease)			Volume			Rate			Rate/Volume			Total Increase (Decrease)
Increase/(decrease) in interest income:
Loans and leases	$	15,708		$	—		$	14		$	15,722		$	31,942		$	(532	)	$	(147	)	$	31,263
Interest-earning deposits in other financial institutions	216			76			84			376			293			240			215			748
Mortgage-backed and other investment securities	302			225			13			540			1,077			410			42			1,529
Stock of the FHLB, at cost	(231		)	2,364			(405		)	1,728			(496		)	1,853			(280		)	1,077
	$	15,995		$	2,665		$	(294	)	$	18,366		$	32,816		$	1,971		$	(170	)	$	34,617
Increase/(decrease) in interest expense:
Interest-bearing demand and savings	$	1,789		$	627		$	184		$	2,600		$	3,588		$	1,190		$	439		$	5,217
Time deposits	1,300			291			111			1,702			2,625			743			208			3,576
Securities sold under agreements to repurchase	—			(1		)	—			(1		)	—			(23		)	—			(23		)
Advances from the FHLB	(924		)	1,390			(487		)	(21		)	(1,508		)	2,365			(666		)	191
Subordinated notes and debentures and other	368			48			480			896			734			99			981			1,814
	$	2,533		$	2,355		$	288		$	5,176		$	5,439		$	4,374		$	962		$	10,775

Provision for Loan and Lease Losses

The loan and lease loss provision was $4.1 million for the three months ended December 31, 2016 compared to $3.4 million for the three months ended December 31, 2015. The loan and lease loss provision was $6.0 million for the six months ended December 31, 2016 compared to $5.8 million for the six months ended December 31, 2016. The increase in the loss provision for the three and six months ended December 31, 2016 is primarily due to loan and lease portfolio growth and a change in the mix of loans and leases. Provisions for loan and lease losses are charged to income to bring the allowance for loan and lease losses to a level deemed appropriate by management based on the factors discussed under “Financial Condition—Asset Quality and Allowance for Loan and Lease Losses.”

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Non-Interest Income

The following table sets forth information regarding our non-interest income for the periods shown:

	For the Three Months Ended									For the Six Months Ended
	December 31,									December 31,
(Dollars in thousands)	2016			2015			Inc (Dec)			2016			2015			Inc (Dec)
Realized gain on securities:
Sale of securities	$	1,622		$	933		$	689		$	2,612		$	933		$	1,679
Total realized gain on securities	1,622			933			689			2,612			933			1,679
Other-than-temporary loss on securities:
Total impairment losses	$	(7,718	)	$	(1,037	)	$	(6,681	)	$	(8,999	)	$	(1,779	)	$	(7,220	)
Loss recognized in other comprehensive loss	6,368			1,014			5,354			7,529			1,638			5,891
Net impairment loss recognized in earnings	(1,350		)	(23		)	(1,327		)	(1,470		)	(141		)	(1,329		)
Fair value gain on trading securities	456			(196		)	652			567			(126		)	693
Total unrealized loss on securities	(894		)	(219		)	(675		)	(903		)	(267		)	(636		)
Prepayment penalty fee income	637			738			(101		)	1,935			1,614			321
Gain on sale – other	2,033			5,551			(3,518		)	3,726			9,247			(5,521		)
Mortgage banking income	4,837			2,909			1,928			9,970			4,787			5,183
Banking service fees and other income	8,465			6,308			2,157			14,092			9,695			4,397
Total non-interest income	$	16,700		$	16,220		$	480		$	31,432		$	26,009		$	5,423

Non-interest income increased$0.5 million to $16.7 million for the three months ended December 31, 2016. The increase was primarily the result of a $2.2 million increase in banking service fees due to increased fees related to IRAs, a $1.9 million increase in mortgage banking income and a $0.7 million increase in realized gain on securities, partially offset by a decrease in gain on sale – other of $3.5 million due to less sales of structured settlements and a decrease a $0.7 million decrease in unrealized loss on securities. The H&R Block relationship was new for fiscal 2016 and introduced seasonality into banking service fees and other income category of non-interest income, with an increase during our second quarter and the peak income in this category typically occurring during our third fiscal quarter ended March 31. Therefore, banking services fees and other income for the three months ended December 31, 2016 are not indicative of results to be expected for other quarters during the fiscal year. Non-interest income increased $5.4 million to $31.4 million for the six months ended December 31, 2016. The increase was primarily the result of an increase in mortgage banking income of $5.2 million, a $4.4 million increase in banking service fees due to increased fees related to IRAs, an increase in realized gain on securities of $1.7 million, partially offset by a $5.5 million decrease in gain on sale – other primarily from less sales of structured settlements and an increase in unrealized loss on securities of $0.6 million.

Included in gain on sale – other are sales of correspondent loans that are collateralized by non-mortgage assets and sales of structured settlement annuity receivables. We engage in the wholesale and retail purchase of state lottery prize and structured settlement annuity payments. These payments are high credit quality deferred payment receivables having a state lottery commission or investment grade (top two tiers) insurance company payor. The Bank originates contracts for the retail purchase of such payments and classifies these under the heading of Factoring in the loan portfolio. Factoring yields are typically higher than mortgage loan rates. Typically, the gain received upon sale of these payment streams is greater than the gain received from an equivalent amount of mortgage loan sales. Since 2013, pools of structured settlement receivables have been originated for sale depending upon management’s assessment of interest rate risk, liquidity, and offers containing favorable terms and are classified on our balance sheet as loans held for sale.

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Non-Interest Expense

The following table sets forth information regarding our non-interest expense for the periods shown:

	For the Three Months Ended							For the Six Months Ended
	December 31,							December 31,
(Dollars in thousands)	2016		2015		Inc (Dec)			2016		2015			Inc (Dec)
Salaries and related costs	$	19,933	$	16,440	$	3,493		$	39,340	$	30,762		$	8,578
Professional services	1,086		1,270		(184		)	2,440		1,633			807
Occupancy and equipment	1,363		934		429			2,638		1,847			791
Data processing and internet	2,941		2,299		642			6,113		4,179			1,934
Advertising and promotional	1,981		1,597		384			4,522		3,225			1,297
Depreciation and amortization	1,411		998		413			2,764		2,006			758
Real estate owned and repossessed vehicles	348		24		324			506		(50		)	556
FDIC and regulator fees	884		1,108		(224		)	2,124		2,172			(48		)
Other general and administrative	3,353		2,775		578			5,731		4,589			1,142
Total non-interest expenses	$	33,300	$	27,445	$	5,855		$	66,178	$	50,363		$	15,815

Non-interest expense, which is comprised primarily of compensation, data processing and internet expenses, occupancy, advertising and promotional and other operating expenses, was $33.3 million for the three months ended December 31, 2016, up from $27.4 million for the three months ended December 31, 2015. Non-interest expense was $66.2 million for the six months ended December 31, 2016, up from $50.4 million for the six months ended December 31, 2015. The increase in compensation expense for the three and six months ended December 31, 2016 was primarily due to the expansion of the Bank, specifically in areas related to lending, information technology infrastructure development and regulatory compliance.

Total salaries and related costs increased $3.5 million to $19.9 million for the three months ended December 31, 2016 compared to $16.4 million for the three months ended December 31, 2015 due to increased staffing levels to support growth in lending and information technology infrastructure development activities. Total salaries and related costs increased $8.6 million to $39.3 million for the six months ended December 31, 2016 compared to $30.8 million for the six months ended December 31, 2015 due to increased staffing levels to support growth in lending and information technology infrastructure development activities. Our staff increased to 631 from 534, or 18.2% between December 31, 2016 and 2015, respectively.

Professional services, which include accounting and legal fees, decreased $0.2 million and increased $0.8 million for the three and six months ended December 31, 2016, compared to the three and six month periods last year, respectively. Professional services for the three months ended December 31, 2016 decreased due primarily to increased insurance reimbursements. Professional services for the six months ended December 31, 2016 increased due primarily to legal fees and the timing of insurance reimbursements.

Advertising and promotional expense increased $0.4 million and increased $1.3 million for the three and six months ended December 31, 2016, compared to the three and six months ended December 31, 2015. The increases for the three and six months ending December 31, 2016 were primarily related to increased lead generation costs, partially offset by decreased deposit marketing.

Data processing and internet expense increased $0.6 million and $1.9 million for the three and six months ended December 31, 2016, compared to the three and six month period ended December 31, 2015, respectively. The increases were primarily due to growth in the number of customer accounts, software initiatives, and enhancements to the Bank’s core processing system.

The cost of our Federal Deposit Insurance Corporation (“FDIC”) and OCC standard regulatory charges decreased $0.2 million and $0.1 million for the three and six months ended December 31, 2016, compared to the three and six month period last year. The decreases were due to a favorable change in the FDIC deposit insurance premium calculation partially offset by the overall growth of the Bank’s liabilities. As an FDIC-insured institution, the Bank is required to pay deposit insurance premiums to the FDIC.

Other general and administrative costs increased by $0.6 million and $1.1 million for the three and six months ended December 31, 2016, compared to the three and six month period ended December 31, 2015, respectively. The increases were primarily due to costs supports loan and deposit production.

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Provision for Income Taxes

Our effective income tax rates (income tax provision divided by net income before income tax) for the three months ended December 31, 2016 and 2015 were 41.97% and 42.02%, respectively. Our effective income tax rates (income tax provision divided by net income before income tax) for the six months ended December 31, 2016 and 2015 were 41.94% and 41.78%, respectively. The changes in the tax rates are primarily the result of changes in state tax allocations.

FINANCIAL CONDITION

Balance Sheet Analysis

Our total assets increased$566.5 million, or 7.5%, to $8,167.9 million, as of December 31, 2016, up from $7,601.4 million at June 30, 2016. The increase in total assets was primarily due to an increase of $456.8 million in net loans and leases held for investment and an increase in cash of $196.9 million. Total liabilities increased$498.5 million, primarily from growth in deposits of $566.6 million.

Loans and Leases

Net loans and leases held for investment increased7.2% to $6,811.5 million at December 31, 2016 from $6,354.7 million at June 30, 2016. The increase in the loan and lease portfolio was primarily due to loan and lease originations and purchases of $1,996.9 million, partially offset by loan and lease repayments and other adjustments of $1,540.1 million during the six months ended December 31, 2016.

The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:

	December 31, 2016					June 30, 2016
(Dollars in thousands)	Amount			Percent		Amount			Percent
Single family real estate secured:
Mortgage	$	3,719,038		54.1	%	$	3,678,520		57.5	%
Home equity	2,412			—	%	2,470			—	%
Warehouse and other	480,378			7.0	%	537,714			8.4	%
Multifamily real estate secured	1,451,535			21.1	%	1,373,216			21.5	%
Commercial real estate secured	155,124			2.3	%	121,746			1.9	%
Auto and RV secured	107,430			1.6	%	73,676			1.2	%
Factoring	134,349			1.9	%	98,275			1.5	%
Commercial & Industrial	763,811			11.1	%	514,300			8.0	%
Other	63,441			0.9	%	2,542			—	%
Total gross loans and leases	6,877,518			100.0	%	6,402,459			100.0	%
Allowance for loan and lease losses	(40,928		)			(35,826		)
Unaccreted discounts and loan and lease fees	(25,120		)			(11,954		)
Total net loans and leases	$	6,811,470				$	6,354,679

The Bank originates some interest only loans with terms that include repayments that are less than the repayments for fully amortizing loans. Also, the Bank previously purchased option adjustable-rate mortgage (“ARM”) loans and other loan types that permit payments that may be smaller than interest accruals. The Bank’s lending guidelines for interest only loans are adjusted for the increased credit risk associated with these loans by requiring borrowers with such loans to borrow at LTVs that are lower than standard amortizing ARM loans and by calculating debt to income ratios for qualifying borrowers based upon a fully amortizing payment, not the interest only payment. The Bank monitors and performs reviews of interest only loans. Adverse trends reflected in the Company’s delinquency statistics, grading and classification of interest only loans would be reported to management and the Board of Directors. As of December 31, 2016, the Company had $820.7 million of interest only mortgage loans and $2.8 million of option adjustable-rate mortgage loans. Through December 31, 2016, the net amount of deferred interest on these loan types was not material to the financial position or operating results of the Company.

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Asset Quality and Allowance for Loan and Lease Losses

Non-performing Assets

Non-performing loans and leases are comprised of loans and leases past due 90 days or more on nonaccrual status and other nonaccrual loans and leases. Non-performing assets include non-performing loans and leases plus other real estate owned and repossessed vehicles. At December 31, 2016, our non-performing loans and leases totaled $34.6 million, or 0.50% of total gross loans and leases and our non-performing loans and leases and foreclosed assets or “non-performing assets” totaled $35.5 million, or 0.43% of total assets.

Non-performing assets consisted of the following as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016			Inc (Dec)
Non-performing assets:
Non-accrual loans and leases:
Single family real estate secured:
Mortgage	$	28,145		$	28,400		$	(255	)
Home equity	47			33			14
Multifamily real estate secured	5,478			2,218			3,260
Commercial real estate secured	232			254			(22		)
Total non-performing loans secured by real estate	33,902			30,905			2,997
Auto and RV secured	216			278			(62		)
Other	445			676			(231		)
Total non-performing loans and leases	34,563			31,859			2,704
Foreclosed real estate	908			207			701
Repossessed—Auto and RV	53			45			8
Total non-performing assets	$	35,524		$	32,111		$	3,413
Total non-performing loans and leases as a percentage of total loans and leases	0.50		%	0.50		%	—		%
Total non-performing assets as a percentage of total assets	0.43		%	0.42		%	0.01		%

Total non-performing assets increased from $32.1 million at June 30, 2016 to $35.5 million at December 31, 2016. As a percentage of total assets, non-performing assets increased from 0.42% at June 30, 2016 to 0.43% at December 31, 2016. The non-performing assets increase of approximately $3.4 million, was primarily the result of increases in non-performing multifamily real estate secured mortgage loans and foreclosed real estate assets.

A troubled debt restructuring is a concession made to a borrower experiencing financial difficulties, typically permanent or temporary modifications of principal and interest payments or an extension of maturity dates. When a loan is delinquent and classified as a troubled debt restructuring no interest is accrued until the borrower demonstrates over time (typically six months) that it can make payments. When a loan is considered a troubled debt restructuring and is on nonaccrual, it is considered non-performing and included in the table above. The Bank had performing troubled debt restructurings with outstanding balances totaling $0.2 million at December 31, 2016 and $0.2 million at June 30, 2016.

Allowance for Loan and Lease Losses

We are committed to maintaining the allowance for loan and lease losses at a level that is considered to be commensurate with estimated and known risks in the portfolio. Although the adequacy of the allowance is reviewed quarterly, management performs an ongoing assessment of the risks inherent in the portfolio. While we believe that the allowance for loan and lease losses is adequate at December 31, 2016, future additions to the allowance will be subject to continuing evaluation of estimated and known, as well as inherent risks in the loan and lease portfolio.

The assessment of the adequacy of our allowance for loan and lease losses is based upon a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans and leases, change in volume and mix of loans and leases, collateral values and charge-off history.

We provide general loan loss reserves for our auto and RV loans based upon the borrower credit score at the time of origination and the Company’s loss experience to date. The allowance for loan loss for the auto and RV loan portfolio at December 31, 2016 was determined by classifying each outstanding loan according to the semi-annually refreshed FICO score and providing loss rates. The Company had $107.2 million of auto and RV loan balances subject to general reserves as follows: FICO greater than

53

or equal to 770: $44.6 million; 715 – 769: $38.2 million; 700 – 714: $10.7 million; 660 – 699: $11.8 million and less than 660: $1.9 million.

We experienced increased charge-offs of RV loans in fiscal 2007 through 2011, due to the nationwide recession. Our portfolio of RV loans is expected to decrease in the future because the Bank ceased originating RV loans in fiscal 2009.

The Company provides general loan loss reserves for mortgage loans based upon the size and class of the mortgage loan and the loan-to-value ratio (“LTV”) at date of origination. The allowance for each class is determined by dividing the outstanding unpaid balance for each loan by the loan-to-value and applying quantitative and qualitative loss rates. The LTV groupings for each significant mortgage class are as follows:

The Company had $3,690.7 million of single family mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 60%: $1,946.9 million; 61% – 70%: $1,348.4 million; 71% – 80%: $395.2 million; greater than 80%: $0.2 million.

The Company had $1,446.1 million of multifamily mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 55%: $674.7 million; 56% – 65%: $473.9 million; 66% – 75%: $285.0 million; 76% – 80%: $12.4 million and greater than 80%: $0.0 million.

The Company had $154.9 million of commercial real estate loan balances subject to general reserves as follows: LTV less than or equal to 50%: $65.7 million; 51% – 60%: $36.3 million; 61% – 70%: $42.6 million; and 71% – 80%: $10.3 million.

The weighted average LTV percentage for our entire real estate loan portfolio was 57% at December 31, 2016. We believe that this percentage is lower and more conservative than most banks, which results in lower average mortgage loan charge-offs when compared to many other comparable banks.

While we anticipate that such level of charge-offs will continue into the future, given the uncertainties surrounding the improvement of the U.S. economy, we may experience an increase in the relative amount of charge-offs and we may be required to increase our loan and lease loss provisions in the future to provide a larger loss allowance for one or more of our loan and lease types.

The following table summarizes impaired loans and leases as of:

(Dollars in thousands)	December 31, 2016		June 30, 2016
Non-performing loans and leases—90+ days past due plus other non-accrual loans and leases	$	31,681	$	28,790
Troubled debt restructuring loans—non-accrual	2,882		3,069
Troubled debt restructuring loans—performing	206		210
Total impaired loans and leases	$	34,769	$	32,069

The following table reflects management’s allocation of the allowance for loan and lease losses by loan and lease category and the ratio of each loan and lease category to total loans and leases as of the dates indicated:

	December 31, 2016				June 30, 2016
(Dollars in thousands)	Amount of Allowance		Allocation as a % of Allowance		Amount of Allowance		Allocation as a % of Allowance
Single family real estate secured:
Mortgage	$	19,243	47.0	%	$	18,666	52.1	%
Home equity	22		0.1	%	23		—	%
Warehouse and other	2,179		5.3	%	2,685		7.5	%
Multifamily real estate secured	3,913		9.6	%	3,938		11.0	%
Commercial real estate secured	1,001		2.4	%	882		2.5	%
Auto and RV secured	2,017		4.9	%	1,615		4.5	%
Factoring	339		0.8	%	245		0.7	%
Commercial & Industrial	9,764		23.9	%	7,630		21.3	%
Other	2,450		6.0	%	142		0.4	%
Total	$	40,928	100.0	%	$	35,826	100.0	%

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The loan and lease loss provision was $4.1 million and $3.4 million for the three months ended December 31, 2016 and December 31, 2015, respectively. The loan and lease loss provision was $6.0 million and $5.8 million for the six months ended December 31, 2016 and December 31, 2015, respectively. The increase for the three and six months ended December 31, 2016 in the loan and lease loss provision was primarily the result of loan and lease portfolio growth and a change in the mix of loans and leases. We believe that the lower average LTV in the Bank’s mortgage loan portfolio will continue to result in future lower average mortgage loan charge-offs when compared to many other comparable banks. Our general loan and lease loss reserves are based upon historical losses and expected future trends. The resolution of the Bank’s existing other real estate owned and non-performing loans should not have a significant adverse impact on our operating results.

Investment Securities

Total investment securities were $387.9 million as of December 31, 2016, compared with $472.2 million at June 30, 2016. During the six months ended December 31, 2016, we purchased twelve securities for $93.2 million, sold $112.9 million of available for sale securities, and received principal repayments of approximately $63.7 million in our available-for-sale portfolio. The remainder of the change for the available-for-sale portfolio is attributable to accretion and other activities. During the quarter ended September 30, 2016, we elected to reclassify all of our HTM securities to AFS. At the time of reclassification,while we had the ability to hold those transferred securities to maturity and did not intend to sell the securities, we concluded that there were sufficient uncertainties associated with i) future fiscal and monetary policy resulting from domestic and international political changes, ii) future interpretations and applications of new accounting principles and regulatory guidance; iii) the pace of future market interest rate increases given that market interest rates remain at historical lows and the absence of clear forward-looking guidance set by Federal Reserve Board of Governors, all of which could, depending upon the outcomes, change our intent to hold our securities. Under Accounting Standards Codification 320-10 Investments—Debt Securities, there are very limited exceptions that allow an entity to reclassify or sell one or more securities from HTM and still use the HTM classification. We concluded that such exceptions may not apply to all results and elected to reclassify all HTM securities to AFS understanding that such reclassification will immediately eliminate our ability to use the HTM classification for our securities portfolio for a period of time not to be less than one year. We will perform periodic assessments in the future to determine whether the above referenced uncertainties have been resolved and we have the positive intent and ability to hold securities until maturity. The net carrying amount of the securities reclassified in September 2016 from HTM to AFS was $194.2 million and the fair value of AFS securities at September 30, 2016 is reflected in the Unaudited Condensed Consolidated Balance Sheets. The reclassification resulted in an unrealized gain recognized through other comprehensive income of $3.6 million in the Unaudited Condensed Consolidated Statements of Comprehensive Income.

Deposits

Deposits increased a net $566.6 million, or 9.4%, to $6,610.7 million at December 31, 2016, from $6,044.1 million at June 30, 2016. Our deposit growth was the result of a 7.7% increase in non-interest bearing accounts and a 13.8% and 14.8% increase in interest bearing demand and savings accounts, respectively. The addition of deposits from our H&R Block Bank deposit acquisition and our organic growth resulted in higher savings account business and non-interest bearing account business during the six months ended December 31, 2016.

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The following table sets forth the composition of the deposit portfolio as of the dates indicated:

	December 31, 2016				June 30, 2016
(Dollars in thousands)	Amount		Rate1		Amount		Rate1
Non-interest bearing	$	634,350	—	%	$	588,774	—	%
Interest-bearing:
Demand	2,181,490		0.58	%	1,916,525		0.63	%
Savings	2,853,009		0.66	%	2,484,994		0.69	%
Total interest-bearing demand and savings	5,034,499		0.63	%	4,401,519		0.66	%
Time deposits:
Under $100,000	43,205		1.20	%	51,849		1.23	%
$100,000 or more2	898,620		2.17	%	1,001,909		1.99	%
Total time deposits	941,825		2.12	%	1,053,758		1.96	%
Total interest bearing2	5,976,324		0.87	%	5,455,277		0.91	%
Total deposits	$	6,610,674	0.78	%	$	6,044,051	0.82	%

______________________________

^1.Based on weighted-average stated interest rates at end of period.

^2. The total interest-bearing includes brokered deposits of $1,031.9 million and $800.7 million as of December 31, 2016 and June 30, 2016, respectively, of which $589.3 million and $537.4 million, respectively, are time deposits classified as $100,000 or more.

The following table sets forth the number of deposit accounts by type as of the date indicated:

	December 31, 2016	June 30, 2016	December 31, 2015
Non-interest bearing, prepaid and other	2,487,485	1,816,266	1,854,594
Checking and savings accounts	280,380	292,012	294,980
Time deposits	3,756	4,807	4,511
Total number of deposit accounts	2,771,621	2,113,085	2,154,085

The net increase of 671,219 of non-interest bearing, prepaid and other accounts for the six months ended December 31, 2016 was primarily the result of new H&R Block-branded products.

Borrowings

The following table sets forth the composition of our borrowings and the interest rates at the dates indicated:

	December 31, 2016					June 30, 2016					December 31, 2015
(Dollars in thousands)	Balance			Weighted Average Rate		Balance			Weighted Average Rate		Balance			Weighted Average Rate
Repurchase agreements	$	35,000		4.38	%	$	35,000		4.38	%	$	35,000		4.38	%
FHLB Advances	665,000			1.60	%	727,000			1.53	%	758,000			1.45	%
Subordinated notes and debentures and other	56,408			6.30	%	56,016			6.27	%	5,155			2.78	%
Total borrowings	$	756,408		2.08	%	$	818,016		1.99	%	$	798,155		1.59	%
Weighted average cost of borrowings during the quarter	2.46		%			2.01		%			1.38		%
Borrowings as a percent of total assets	9.3		%			10.8		%			12.0		%

At December 31, 2016, total borrowings amounted to $756.4 million, down-$61.6 million, or 7.5%, from June 30, 2016 and down$41.7 million or 5.2% from December 31, 2015. Total borrowings represented 9.3% of total assets and had a weighted-average cost of 2.46% at December 31, 2016, compared with 10.8% of total assets at a weighted-average cost of 2.01% at June 30, 2016 and 12.0% of total assets at a weighted-average cost of 1.38% at December 31, 2015.

We have sold securities under various agreements to repurchase for total proceeds of $35.0 million. The repurchase agreements have interest rates between 3.75% and 4.75% and scheduled maturities between April 2017 and December 2017. Under

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these agreements, we may be required to repay the $35.0 million and repurchase our securities before the scheduled maturity if the issuer requests repayment on scheduled quarterly call dates. The weighted-average remaining contractual maturity period is 0.60 years and the weighted average remaining period before such repurchase agreements could be called is 0.14 years.

We regularly use advances from the FHLB to manage our interest rate risk and, to a lesser extent, manage our liquidity position. Generally, FHLB advances with terms between three and ten years have been used to fund the purchase of single family and multifamily mortgages and to provide us with interest rate risk protection should rates rise. At December 31, 2016, a total of $5.0 million of FHLB advances include agreements that allow the FHLB, at its option, to put the advances back to us after specified dates. The weighted-average remaining contractual maturity period of the $5.0 million in putable advances is 1.07 years and the weighted average remaining period before such advances could be put to us is 0.07 years.

Stockholders’ Equity

Stockholders’ equity increased $70.1 million to $753.7 million at December 31, 2016 compared to $683.6 million at June 30, 2016. The increase was the result of our net income for the six months ended December 31, 2016 of $61.2 million, vesting and issuance of RSUs and exercise of stock options of $4.2 million, a $4.8 million unrealized gain in other comprehensive income, net of tax, less a reduction of $0.2 million for dividends declared on preferred stock.

LIQUIDITY

Cash flow information is as follows:

	For the Six Months Ended
	December 31,
(Dollars in thousands)	2016			2015
Operating Activities	$	83,150		$	69,413
Investing Activities	$	(366,847	)	$	(784,527	)
Financing Activities	$	504,563		$	776,671

During the six months ended December 31, 2016, we had net cash inflows from operating activities of $83.2 million compared to inflows of $69.4 million for the six months ended December 31, 2015. Net operating cash inflows and outflows fluctuate primarily due to the timing of originations of loans held for sale and proceeds from loan sales.

Net cash outflows from investing activities totaled $366.8 million for the six months ended December 31, 2016, while outflows totaled $784.5 million for the same period in fiscal year 2016. The decrease was primarily due to increased repayments of loans and leases in the fiscal 2017 period compared to the same period in the prior year.

Our net cash provided by financing activities totaled $504.6 million for the six months ended December 31, 2016, and $776.7 million for the six months ended December 31, 2015. Net cash provided by financing activities decreased primarily from a decrease in net borrowings from FHLB and decreased deposit inflows for the six months ended December 31, 2016 compared to December 31, 2015.

During the six months ended December 31, 2016, the Bank could borrow up to 40.0% of its total assets from the FHLB. Borrowings are collateralized by the pledge of certain mortgage loans and investment securities to the FHLB. At December 31, 2016, the Company had $1,388.0 million available immediately which reflects a fully collateralized position. At December 31, 2016, we also had two unsecured federal funds purchase lines with two different banks totaling $35.0 million, under which no borrowings were outstanding.

The Bank has the ability to borrow short-term from the Federal Reserve Bank of San Francisco Discount Window. At December 31, 2016, the Bank did not have any borrowings outstanding and the amount available from this source was $1,747.4 million. The credit line is collateralized by consumer loans and mortgage-backed securities.

In an effort to expand the Bank’s liquidity options, we have issued brokered deposits of $1,031.9 million at December 31, 2016. We believe our liquidity sources to be stable and adequate for our anticipated needs and contingencies. We believe we have the ability to increase our level of deposits and borrowings to address our liquidity needs for the foreseeable future.

OFF-BALANCE SHEET COMMITMENTS

At December 31, 2016, we had commitments to originate loans with an aggregate outstanding principal balance of $604.8 million, and commitments to sell loans with an aggregate outstanding principal balance of $77.9 million. We have no commitments to purchase loans, leases, investment securities or any other unused lines of credit.

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Litigation. On October 15, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Golden v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Golden Case”). On November 3, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a second putative class action lawsuit styled Hazan v. BofI Holding, Inc., et al, and also brought in the United States District Court for the Southern District of California (the “Hazan Case”). On February 1, 2016, the Golden Case and the Hazan Case were consolidated as In re BofI Holding, Inc. Securities Litigation, Case #: 3:15-cv-02324-GPC-KSC (the “Class Action”), and the Houston Municipal Employees Pension System was appointed lead plaintiff. The Class Action complaint was amended by a certain Consolidated Amended Class Complaint filed on April 11, 2016. The Class Action plaintiff seeks monetary damages and other relief on behalf of a putative class that has not been certified by the Court.

The complaints filed in the Golden Case and the Hazan Case both allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose the wrongful conduct that is alleged in a complaint that was filed in a wrongful termination of employment lawsuit (the “Employment Matter”), and that as a result the Company’s statements regarding its internal controls, as well as portions of its financial statements, were false and misleading. The Company and the other named defendants dispute the allegations of wrongdoing advanced by the plaintiffs in the Class Action and in the Employment Matter, as well as those plaintiffs’ statement of the underlying factual circumstances, and are vigorously defending both cases.

In addition to the Class Action, two separate shareholder derivative actions were filed in December, 2015, purportedly on behalf of the Company. The first derivative action, Calcaterra v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on December 3, 2015. The second derivative action, Dow v. Micheletti, et al, was filed in the San Diego County Superior Court on December 16, 2015. A third derivative action, DeYoung v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 22, 2016, a fourth derivative action, Yong v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 29, 2016, and a fifth derivative action, Laborers Pension Trust Fund of Northern Nevada v. Allrich et al, was filed in the United States District Court for the Southern District of California on February 2, 2016. Each of these five derivative actions names the Company as a nominal defendant, and certain of its officers and directors as defendants. Each complaint sets forth allegations of breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment against the defendant officers and directors. The plaintiffs in these derivative actions seek damages in unspecified amounts on the Company’s behalf from the officer and director defendants, certain corporate governance actions, and an award of their costs and attorney’s fees. On June 9, 2016, the United States District Court for the Southern District of California ordered the four above-referenced cases pending before it to be consolidated, appointed lead counsel in the consolidated action, and ordered the parties to meet and confer regarding a schedule for the filing of a consolidated complaint and defendants’ response to the complaint. Pursuant to the June 9, 2016 order, counsel have met and conferred regarding proposals for (a) the time for plaintiffs to file a consolidated complaint or provide notice of plaintiffs’ intent to rely upon the original Complaint in Case No. 3:15-cv-02722-GPC-KSC (the “operative complaint”); (b) the time for defendants to respond to the operative complaint; and (c) a schedule for briefing any motion to dismiss that may be filed by a defendant. A stipulation setting forth the agreed litigation schedule has been submitted to the Court. The fifth derivative action, which is pending before the San Diego County Superior Court, has been stayed by agreement of the parties. On September 27, 2016, the Court dismissed the Class Action, with leave to amend, as to defendants Andrew Micheletti, Paul Grinberg, Nicholas Mosich and James Argalas. The Court denied the Motion to Dismiss with respect to the Company and Gregory Garrabrants. The Company and the other defendants dispute the allegations of wrongdoing and are vigorously defending these purported derivative actions. On November 25, 2016, the putative class action plaintiff filed a Second Amended Class Action Complaint, which includes the previously dismissed defendants. On December 23, 2016, the Company and other defendants filed a motion to dismiss such Second Amended Class Action Complaint.

CONTRACTUAL OBLIGATIONS

The Company enters into contractual obligations in the normal course of business primarily as a source of funds for its asset growth and to meet required capital needs. Our time deposits due within one year of December 31, 2016 totaled $340.6 million. We believe the large percentage of time deposits that mature within one year reflects customers’ hesitancy to invest their funds long term. If these maturing deposits do not remain with us, we may be required to seek other sources of funds, including other time deposits and borrowings. Depending on market conditions, we may be required to pay higher rates on deposits and borrowings than we currently pay on time deposits maturing within one year. However, based on past experience we believe a significant portion of our time deposits will remain with us. We believe we have the ability to attract and retain deposits by adjusting interest rates offered.

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The following table presents certain of our contractual obligations as of the period indicated:

	As of December 31, 2016
			Payments Due by Period1
(Dollars in thousands)	Total		Less Than One Year		One To Three Years		Three To Five Years		More Than Five Years
Long-term debt obligations2	$	824,295	$	313,929	$	223,509	$	114,161	$	172,696
Time deposits2	1,056,552		357,885		85,066		103,730		509,871
Operating lease obligations3	18,484		4,351		9,113		3,522		1,498
Total	$	1,899,331	$	676,165	$	317,688	$	221,413	$	684,065

________________________________

^1.  Our contractual obligations include long-term debt, time deposits and operating leases as shown. We had no capitalized leases or material commitments for capital expenditures at December 31, 2016.

^2.  Amounts include principal and interest due to recipient.

^3.  Payments are for leases of real property.

CAPITAL RESOURCES AND REQUIREMENTS

Our Company and Bank are subject to regulatory capital adequacy requirements promulgated by federal bank regulatory agencies. Failure by our Company or Bank to meet minimum capital requirements could result in certain mandatory and discretionary actions by regulators that could have a material adverse effect on our consolidated financial statements. The Federal Reserve establishes capital requirements for our Company and the OCC has similar requirements for our Bank. The following tables present regulatory capital information for our Company and Bank. Information presented for December 31, 2016, reflects the Basel III capital requirements that became effective January 1, 2015 for both our Company and Bank. Under these capital requirements and the regulatory framework for prompt corrective action, our Company and Bank must meet specific capital guidelines that involve quantitative measures of our Company and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. Our Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings and other factors.

Quantitative measures established by regulation require our Company and Bank to maintain certain minimum capital amounts and ratios. Federal bank regulators require our Company and Bank maintain minimum ratios of core capital to adjusted average assets of 4.0%, common equity tier 1 capital to risk-weighted assets of 4.5%, tier 1 capital to risk-weighted assets of 6.0% and total risk-based capital to risk-weighted assets of 8.0%. To be “well capitalized,” our Company and Bank must maintain minimum leverage, common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratios of at least 5.0%, 6.5%, 8.0% and 10.0%, respectively. At December 31, 2016, our Company and Bank met all the capital adequacy requirements to which they were subject to and were “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since December 31, 2016 that would materially adversely change the Company’s and Bank’s capital classifications. From time to time, we may need to raise additional capital to support our Company’s and Bank’s further growth and to maintain their “well capitalized” status.

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The Bank’s capital amounts, capital ratios and capital requirements under Basel III were as follows:

	BofI Holding, Inc.						BofI Federal Bank						“Well  Capitalized” Ratio		Minimum Capital Ratio
(Dollars in thousands)	December 31, 2016			June 30, 2016			December 31, 2016			June 30, 2016
Regulatory Capital:
Tier 1	$	756,173		$	690,893		$	727,854		$	664,427
Common equity tier 1	$	751,110		$	685,830		$	727,853		$	664,427
Total capital (to risk-weighted assets)	$	848,224		$	777,834		$	768,905		$	700,368
Assets:
Average adjusted	$	7,786,456		$	7,575,526		$	7,774,451		$	7,566,865
Total risk-weighted	$	5,175,511		$	4,755,242		$	5,168,541		$	4,747,496
Regulatory Capital Ratios:
Tier 1 leverage (core) capital to adjusted average assets	9.71		%	9.12		%	9.36		%	8.78		%	5.00	%	4.00	%
Common equity tier 1 capital (to risk-weighted assets)	14.51		%	14.42		%	14.08		%	14.00		%	6.50	%	4.50	%
Tier 1 capital (to risk-weighted assets)	14.61		%	14.53		%	14.08		%	14.00		%	8.00	%	6.00	%
Total capital (to risk-weighted assets)	16.39		%	16.36		%	14.88		%	14.75		%	10.00	%	8.00	%

Beginning January 1, 2016, Basel III implemented a requirement for all banking organizations to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of common equity tier 1 capital, and it applies to each of the three risk-based capital ratios but not the leverage ratio. At December 31, 2016, our Company and Bank are in compliance with the capital conservation buffer requirement. The three risk-based capital ratios will increase by 0.625% each year through 2019, at which point, the common equity tier 1 risk-based, tier 1 risk-based and total risk-based capital ratio minimums will be 7.0%, 8.5% and 10.5%, respectively.

In connection with the approval of the acquisition of the H&R Block Bank deposits on September 1, 2015, the Bank executed a letter agreement with the OCC to maintain its Tier 1 leverage capital ratio at a minimum of 8.50% for the quarters ended in June, September and December and a minimum of 8.00% for the quarter ended in March, subject to certain adjustments. At December 31, 2016 the Bank is in compliance with this letter agreement.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We measure interest rate sensitivity as the difference between amounts of interest-earning assets and interest-bearing liabilities that mature or contractually re-price within a given period of time. The difference, or the interest rate sensitivity gap, provides an indication of the extent to which an institution’s interest rate spread will be affected by changes in interest rates. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities and negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. In a rising interest rate environment, an institution with a positive gap would be in a better position than an institution with a negative gap to invest in higher yielding assets or to have its asset yields adjusted upward, which would cause the yield on its assets to increase at a faster pace than the cost of its interest-bearing liabilities. During a period of falling interest rates, however, an institution with a positive gap would tend to have its assets reprice at a faster rate than one with a negative gap, which would tend to reduce the growth in its net interest income.

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The following table sets forth the amounts of interest earning assets and interest bearing liabilities that were outstanding at December 31, 2016 and the portions of each financial instrument that are expected to mature or reset interest rates in each future period:

	Term to Repricing, Repayment, or Maturity at
	December 31, 2016
(Dollars in thousands)	Six Months or Less			Over Six Months Through One Year			Over One Year Through Five Years			Over Five Years			Total
Interest-earning assets:
Cash and cash equivalents	$	707,593		$	—		$	—		$	—		$	707,593
Securities1	355,039			11,484			22,483			(1,121		)	387,885
Stock of the FHLB, at cost	54,351			—			—			—			54,351
Loans and leases—net of allowance for loan loss	2,085,809			800,334			3,818,715			106,612			6,811,470
Loans held for sale	49,895			—			—			—			49,895
Total interest-earning assets	3,252,687			811,818			3,841,198			105,491			8,011,194
Non-interest earning assets	—			—			—			—			156,682
Total assets	$	3,252,687		$	811,818		$	3,841,198		$	105,491		$	8,167,876
Interest-bearing liabilities:
Interest-bearing deposits	$	2,521,915		$	2,852,883		$	131,924		$	469,602		$	5,976,324
Securities sold under agreements to repurchase	15,000			20,000			—			—			35,000
Advances from the FHLB	260,000			5,000			302,500			97,500			665,000
Subordinated notes and debentures and other	7,272			—			—			49,136			56,408
Total interest-bearing liabilities	2,804,187			2,877,883			434,424			616,238			6,732,732
Other non-interest-bearing liabilities	—			—			—			—			681,473
Stockholders’ equity	—			—			—			—			753,671
Total liabilities and equity	$	2,804,187		$	2,877,883		$	434,424		$	616,238		$	8,167,876
Net interest rate sensitivity gap	$	448,500		$	(2,066,065	)	$	3,406,774		$	(510,747	)	$	1,278,462
Cumulative gap	$	448,500		$	(1,617,565	)	$	1,789,209		$	1,278,462		$	1,278,462
Net interest rate sensitivity gap—as a % of total interest earning assets	5.60		%	(25.79		)%	42.53		%	(6.38		)%	15.96		%
Cumulative gap—as % of total interest earning assets	5.60		%	(20.19		)%	22.33		%	15.96		%	15.96		%

1. Comprised of agency and non-agency mortgage-backed securities, municipal securities and other non-agency debt securities, which are classified as available-for-sale and trading.

The above table provides an approximation of the projected re-pricing of assets and liabilities at December 31, 2016 on the basis of contractual maturities, adjusted for anticipated prepayments of principal and scheduled rate adjustments. The loan and securities prepayment rates reflected herein are based on historical experience. For the non-maturity deposit liabilities, we use decay rates and rate adjustments based upon our historical experience. Actual repayments of these instruments could vary substantially if future experience differs from our historic experience.

Although “gap” analysis is a useful measurement device available to management in determining the existence of interest rate exposure, its static focus as of a particular date makes it necessary to utilize other techniques in measuring exposure to changes in interest rates. For example, gap analysis is limited in its ability to predict trends in future earnings and makes no assumptions about changes in prepayment tendencies or deposit or loan maturity preferences.

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The following table indicates the sensitivity of net interest income movements to parallel instantaneous shocks in interest rates for the future 1-12 months and 13-24 months’ time periods. For purposes of modeling net interest income sensitivity the Bank assumes no growth in the balance sheet other than for retained earnings:

	As of December 31, 2016
	First 12 Months				Next 12 Months
(Dollars in thousands)	Net Interest Income		Percentage Change from Base		Net Interest Income		Percentage Change from Base
Up 200 basis points	$	342,391	7.6	%	$	313,052	1.2	%
Base	318,218		—	%	309,234		—	%
Down 200 basis points	288,060		(9.5	)%	263,887		(14.7	)%

We attempt to measure the effect market interest rate changes will have on the net present value of assets and liabilities, which is defined as market value of equity. The market value of equity for these purposes is not intended to refer to the trading pricing of our common stock. We analyze the market value of equity sensitivity to an immediate parallel and sustained shift in interest rates derived from the current treasury and LIBOR yield curves. For rising interest rate scenarios, the industry market interest rate forecast was increased by 100, 200 and 300 basis points.

The following table indicates the sensitivity of market value of equity to the interest rate movement described above:

	As of December 31, 2016
(Dollars in thousands)	Net Present Value		Percentage Change from Base		Net Present Value as a Percentage of Assets
Up 300 basis points	$	976,320	(1.8	)%	12.3	%
Up 200 basis points	1,006,560		1.3	%	12.4	%
Up 100 basis points	1,019,333		2.6	%	12.4	%
Base	993,812		—	%	11.9	%
Down 100 basis points	891,787		(10.3	)%	10.6	%

The computation of the prospective effects of hypothetical interest rate changes is based on numerous assumptions, including relative levels of interest rates, asset prepayments, runoffs in deposits and changes in repricing levels of deposits to general market rates, and should not be relied upon as indicative of actual results. Furthermore, these computations do not take into account any actions that we may undertake in response to future changes in interest rates.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

For quantitative and qualitative disclosures regarding market risks in our portfolio, see, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Quantitative and Qualitative Disclosures About Market Risk.”

ITEM 4. CONTROLS AND PROCEDURES

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, pursuant to Exchange Act Rule 13a-15(e). Based upon that evaluation, our Chief Executive Officer along with our Chief Financial Officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended December 31, 2016 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

Management, including the Company’s Chief Executive Officer and Chief Financial Officer, does not expect that the Company’s internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and

62

operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The information set forth in Note 9 – “Commitments And Contingencies” to the Unaudited Condensed Consolidated Financial Statements is incorporated herein by reference.

In addition, from time to time we may be a party to other claims or litigation that arise in the ordinary course of business, such as claims to enforce liens, claims involving the origination and servicing of loans, and other issues related to the business of the Bank. None of such matters are expected to have a material adverse effect on the Company’s financial condition, results of operations or business.

ITEM 1A. RISK FACTORS

We face a variety of risks that are inherent in our business and our industry. These risks are described in more detail under Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended June 30, 2016. We encourage you to read these factors in their entirety. Moreover, other factors may also exist that we cannot anticipate or that we currently do not consider to be significant based on information that is currently available.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The table below sets forth our market repurchases of BofI common stock and the BofI common shares retained in connection with net settlement of restricted stock awards during the quarter ended December 31, 2016. On March 17, 2016, the Company’s Board of Directors approved a stock repurchase plan authorizing the repurchase of up to $100 million of the Company’s stock. The new share repurchase authorization replaces the previous share repurchase plan approved on July 5, 2005. The Company may repurchase shares of common stock on the open market or through privately negotiated transactions at times and prices considered appropriate, at the discretion of the Company, and subject to its assessment of alternative uses of capital, stock trading price, general market conditions and regulatory factors. The stock repurchase plan does not obligate the Company to acquire any specific number of shares and will continue in effect until terminated by the Board of Directors of the Company. Shares of common stock repurchased under this plan will be held as treasury shares. No shares were purchased under the plan during the quarter ended December 31, 2016.

(Dollars in thousands, except per share data)	Number of Shares Purchased	Average Price Paid Per Shares		Total Number of Shares Purchased as Part of Publicly  Announced Plans or Programs	Approximate Dollar value of Shares that May Yet be Purchased Under the Plans or Programs
Stock Repurchases
Quarter Ended December 31, 2016
October 1, 2016 to December 31, 2016	—	$	—	—	$	100,000
For the Three Months Ended December 31, 2016	—	$	—	—	$	100,000
Stock Retained in Net Settlement
October 1, 2016 to October 31, 2016	14,195
November 1, 2016 to November 30, 2016	4,388
December 1, 2016 to December 31, 2016	18,754
For the Three Months Ended December 31, 2016	37,337

ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.    MINE SAFETY DISCLOSURES

None.

ITEM 5.    OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number	Description	Incorporated By Reference to
31.1	Chief Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
31.2	Chief Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.1	Chief Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
32.2	Chief Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith.
101.INS	XBRL Instance Document	Filed herewith.
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith.
101.CAL	XBRL Taxonomy Calculation Linkbase Document	Filed herewith.
101.LAB	XBRL Taxonomy Label Linkbase Document	Filed herewith.
101.PRE	XBRL Taxonomy Presentation Linkbase Document	Filed herewith.
101.DEF	XBRL Taxonomy Definition Document	Filed herewith.

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SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			BofI Holding, Inc.
Dated:	January 30, 2017	By:	/s/ Gregory Garrabrants
			Gregory Garrabrants President and Chief Executive Officer (Principal Executive Officer)
Dated:	January 30, 2017	By:	/s/ Andrew J. Micheletti
			Andrew J. Micheletti Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gregory Garrabrants, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BofI Holding, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated:	January 30, 2017	/s/ GREGORY GARRABRANTS
		GREGORY GARRABRANTS President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Andrew J. Micheletti, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BofI Holding, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the period presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d -15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures, and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Dated:	January 30, 2017	/s/ ANDREW J. MICHELETTI
		ANDREW J. MICHELETTI Executive Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of BofI Holding, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2016, the (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Gregory Garrabrants, hereby certify in my capacity as President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:

a) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.

Dated:	January 30, 2017	/s/ GREGORY GARRABRANTS
		GREGORY GARRABRANTS President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of BofI Holding, Inc. (the “Company”) on Form 10-Q for the period ended December 31, 2016, the (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Andrew J. Micheletti, hereby certify in my capacity as Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002 that:

a) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

b) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such Report.

Dated:	January 30, 2017	/s/ ANDREW J. MICHELETTI
		ANDREW J. MICHELETTI Executive Vice President and Chief Financial Officer (Principal Financial Officer)

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DOCUMENT AND ENTITY INFORMATION - shares	6 Months Ended
	Dec. 31, 2016	Jan. 24, 2017
Document and Entity Information [Abstract]
Entity Registrant Name	BofI Holding, Inc.
Entity Central Index Key	0001299709
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 31, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		63,362,109

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
ASSETS
Cash and due from banks	$ 683,487	$ 486,627
Federal funds sold	24,106	100
Total cash and cash equivalents	707,593	486,727
Securities:
Trading	8,151	7,584
Available-for-sale	379,734	265,447
Held-to-maturity—fair value $202,677 as of June 30, 2016	0	199,174
Stock of the Federal Home Loan Bank, at cost	54,351	57,123
Loans held for sale, carried at fair value	33,990	20,871
Loans held for sale, lower of cost or fair value	15,905	33,530
Loans and leases—net of allowance for loan and lease losses of $40,928 as of December 31, 2016 and $35,826 as of June 30, 2016	6,811,470	6,354,679
Accrued interest receivable	21,538	26,201
Furniture, equipment and software—net	15,126	13,995
Deferred income tax	32,058	39,171
Cash surrender value of life insurance	6,083	5,990
Mortgage servicing rights, carried at fair value	6,150	3,943
Other real estate owned and repossessed vehicles	961	252
Other assets	74,766	84,617
TOTAL ASSETS	8,167,876	7,599,304
Deposits:
Non-interest bearing	634,350	588,774
Interest bearing	5,976,324	5,455,277
Total deposits	6,610,674	6,044,051
Securities sold under agreements to repurchase	35,000	35,000
Advances from the Federal Home Loan Bank	665,000	727,000
Subordinated notes and debentures and other	56,408	56,016
Accrued interest payable	1,700	1,667
Accounts payable and other liabilities	45,423	51,980
Total liabilities	7,414,205	6,915,714
COMMITMENTS AND CONTINGENCIES (Note 9)
STOCKHOLDERS’ EQUITY:
Preferred stock—$0.01 par value; 1,000,000 shares authorized; Series A-$10,000 stated value and liquidation preference per share; 515 shares issued and outstanding as of December 31, 2016 and June 30, 2016	5,063	5,063
Common stock—$0.01 par value; 150,000,000 shares authorized; 64,761,369 shares issued and 63,359,001 shares outstanding as of December 31, 2016; 64,513,494 shares issued and 63,219,392 shares outstanding as of June 30, 2016	648	645
Additional paid-in capital	337,698	331,156
Accumulated other comprehensive income (loss)—net of tax	(2,502)	(7,304)
Retained earnings	445,857	384,815
Treasury stock, at cost; 1,402,368 shares as of December 31, 2016 and 1,294,102 shares as of June 30, 2016	(33,093)	(30,785)
Total stockholders’ equity	753,671	683,590
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$ 8,167,876	$ 7,599,304

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Assets:
Held to maturity - Fair Value	$ 0	$ 202,677
Allowance for loan and lease losses	$ 40,928	$ 35,826
Stockholders' Equity:
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, issued (in shares)	64,761,369	64,513,494
Common stock, shares outstanding (in shares)	63,359,001	63,219,392
Preferred stock, Series A, par or stated value (in dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares authorized (in shares)	1,000,000	1,000,000
Treasury stock, shares (in shares)	1,402,368	1,294,102
Convertible Series A Preferred Stock
Stockholders' Equity:
Preferred stock, Series A, par or stated value (in dollars per share)	$ 10,000	$ 10,000
Preferred Stock, Series A, liquidation preference (in dollars per share)	$ 10,000	$ 10,000
Preferred stock, Series A, shares issued (in shares)	515	515
Preferred stock, Series A, shares outstanding (in shares)	515	515

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
INTEREST AND DIVIDEND INCOME:
Loans and leases, including fees	$ 85,839	$ 70,117	$ 166,458	$ 135,195
Investments	8,462	5,818	15,323	11,969
Total interest and dividend income	94,301	75,935	181,781	147,164
INTEREST EXPENSE:
Deposits	14,011	9,709	27,525	18,732
Advances from the Federal Home Loan Bank	2,605	2,626	5,469	5,278
Other borrowings	1,324	429	2,646	855
Total interest expense	17,940	12,764	35,640	24,865
Net interest income	76,361	63,171	146,141	122,299
Provision for loan and lease losses	4,100	3,400	6,000	5,800
Net interest income, after provision	72,261	59,771	140,141	116,499
NON-INTEREST INCOME:
Realized gain (loss) on sale of securities	1,622	933	2,612	933
Total impairment (losses) gains	(7,718)	(1,037)	(8,999)	(1,779)
Loss (gain) recognized in other comprehensive income	6,368	1,014	7,529	1,638
Net impairment loss recognized in earnings	(1,350)	(23)	(1,470)	(141)
Fair value gain (loss) on trading securities	456	(196)	567	(126)
Total unrealized (loss) gain on securities	(894)	(219)	(903)	(267)
Prepayment penalty fee income	637	738	1,935	1,614
Gain on sale – other	2,033	5,551	3,726	9,247
Mortgage banking income	4,837	2,909	9,970	4,787
Banking service fees and other income	8,465	6,308	14,092	9,695
Total non-interest income	16,700	16,220	31,432	26,009
Realized gain on securities:
Realized gain (loss) on sale of securities	1,622	933	2,612	933
Other-than-temporary loss on securities:
Prepayment penalty fee income	637	738	1,935	1,614
Gain on sale – other	2,033	5,551	3,726	9,247
Mortgage banking income	4,837	2,909	9,970	4,787
Banking service fees and other income	8,465	6,308	14,092	9,695
Total non-interest income	16,700	16,220	31,432	26,009
NON-INTEREST EXPENSE:
Salaries and related costs	19,933	16,440	39,340	30,762
Professional services	1,086	1,270	2,440	1,633
Occupancy and equipment	1,363	934	2,638	1,847
Data processing and internet	2,941	2,299	6,113	4,179
Advertising and promotional	1,981	1,597	4,522	3,225
Depreciation and amortization	1,411	998	2,764	2,006
Real estate owned and repossessed vehicles	348	24	506	(50)
FDIC and regulator fees	884	1,108	2,124	2,172
Other general and administrative	3,353	2,775	5,731	4,589
Total non-interest expense	33,300	27,445	66,178	50,363
INCOME BEFORE INCOME TAXES	55,661	48,546	105,395	92,145
INCOME TAXES	23,361	20,397	44,198	38,495
NET INCOME	32,300	28,149	61,197	53,650
NET INCOME ATTRIBUTABLE TO COMMON STOCK	32,222	28,071	61,042	53,495
COMPREHENSIVE INCOME	$ 29,198	$ 27,635	$ 65,999	$ 54,006
Basic earnings per share (in dollars per share)	$ 0.50	$ 0.44	$ 0.94	$ 0.84
Diluted earnings per share (in dollars per share)	$ 0.50	$ 0.44	$ 0.94	$ 0.84

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
NET INCOME	$ 32,300	$ 28,149	$ 61,197	$ 53,650
Other comprehensive income, net of tax:
Net unrealized gain (loss) from available-for-sale securities, net of tax expense (benefit) of $(3,976) and $(376) for the three months ended December 31, 2016 and 2015, and $1,777 and $(552) for the six months ended December 31, 2016 and 2015, respectively.	(5,353)	(538)	2,435	(776)
Reclassification of net (gain) loss from available-for-sale securities included in income, net of tax expense (benefit) of $691 and $385 for the three months ended December 31, 2016 and 2015, and $1,102 and $385 for the six months ended December 31, 2016 and 2015, respectively.	(931)	(548)	(1,510)	(548)
Other comprehensive income	(3,102)	(514)	4,802	356
Comprehensive income	29,198	27,635	65,999	54,006
Other than Temporary Impairment Gains, Investments, Portion in Other Comprehensive Loss, Net of Tax, Portion Attributable to Parent	$ 3,182	$ 572	$ 3,877	$ 1,680

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net unrealized gain (loss) from available-for-sale securities, tax expense (benefit)	$ (3,976)	$ (376)	$ 1,777	$ (552)
Other-than-temporary impairment on held-to-maturity securities recognized in other comprehensive income, tax expense (benefit)	2,363	401	2,830	1,195
Reclassification of net (gain) loss from available-for-sale securities included in income, tax expense (benefit)	$ 691	$ 385	$ 1,102	$ 385

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CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Dec. 31, 2016 - USD ($) $ in Thousands	Total	Preferred Stock	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss, Net of Income Tax
Preferred stock, beginning balance (in shares) at Jun. 30, 2016		515
Preferred stock, beginning balance at Jun. 30, 2016	$ 683,590	$ 5,063	$ 645	$ (30,785)	$ 331,156	$ 384,815	$ (7,304)
Common stock, issued, beginning balance (in shares) at Jun. 30, 2016	64,513,494		64,513,494
Common stock, treasury and outstanding, beginning balance (in shares) at Jun. 30, 2016	63,219,392		63,219,392	1,294,102
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	$ 61,197					61,197
Other comprehensive income	4,802						4,802
Cash dividends on preferred stock	(155)					(155)
Stock-based compensation expense	6,450				6,450
Restricted stock grants and tax benefits, issued (in shares)			247,875
Restricted stock grants and tax benefits, treasury, (in shares)				(108,266)
Restricted stock grants and tax benefits, outstanding (in shares)			139,609
Restricted stock grants and tax benefits	(2,213)		$ 3	$ (2,308)	92	0
Preferred stock, ending balance (in shares) at Dec. 31, 2016		515
Preferred stock, ending balance at Dec. 31, 2016	$ 753,671	$ 5,063	$ 648	$ (33,093)	$ 337,698	$ 445,857	$ (2,502)
Common stock, issued, ending balance (in shares) at Dec. 31, 2016	64,761,369		64,761,369
Common stock, treasury and outstanding, ending balance (in shares) at Dec. 31, 2016	63,359,001		63,359,001	1,402,368

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 61,197	$ 53,650
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Accretion of discounts on securities	(1,722)	(2,329)
Net accretion of discounts on loans and leases	2,724	1,636
Amortization of borrowing costs	104	2
Stock-based compensation expense	6,450	5,116
Tax benefit from exercise of common stock options and vesting of restricted stock grants	(95)	(2,510)
Valuation of financial instruments carried at fair value	(567)	126
Net gain on sale of investment securities	(2,612)	(933)
Impairment charge on securities	1,470	141
Provision for loan and lease losses	6,000	5,800
Deferred income taxes	2,090	(3,963)
Origination of loans held for sale	(844,456)	(904,453)
Unrealized (gain) loss on loans held for sale	(112)	(62)
Gain on sales of loans held for sale	(13,696)	(14,034)
Proceeds from sale of loans held for sale	859,495	937,049
Change in fair value of mortgage servicing rights	(364)	51
(Gain) loss on sale of other real estate and foreclosed assets	4	(108)
Depreciation and amortization of furniture, equipment and software	2,764	2,006
Net changes in assets and liabilities which provide (use) cash:
Accrued interest receivable	3,775	1,087
Other assets	7,803	(14,049)
Accrued interest payable	33	(4)
Accounts payable and other liabilities	(7,135)	5,194
Net cash provided by (used in) operating activities	83,150	69,413
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investment securities	(93,151)	(96,928)
Proceeds from sale of available-for-sale securities	121,252	10,069
Proceeds from repayment of securities	69,016	35,914
Purchase of stock of Federal Home Loan Bank	(30,939)	(68,649)
Proceeds from redemption of stock of Federal Home Loan Bank	33,711	67,500
Origination of loans and leases for portfolio	(1,946,482)	(1,761,693)
Origination of mortgage warehouse loans, net	(50,401)	(54,327)
Proceeds from sales of other real estate owned and repossessed assets	146	1,442
Purchases of loans and leases, net of discounts and premiums	0	(384)
Principal repayments on loans	1,533,896	1,086,419
Net purchases of furniture, equipment and software	(3,895)	(3,890)
Net cash used in investing activities	(366,847)	(784,527)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits	566,623	748,049
Proceeds from Federal Home Loan Bank advances	411,000	524,000
Repayment of Federal Home Loan Bank advances	(473,000)	(519,000)
Proceeds from exercise of common stock options	0	147
Proceeds from issuance of common stock	0	21,120
Tax benefit from exercise of common stock options and vesting of restricted stock grants	95	2,510
Cash dividends on preferred stock	(155)	(155)
Net cash provided by financing activities	504,563	776,671
NET CHANGE IN CASH AND CASH EQUIVALENTS	220,866	61,557
CASH AND CASH EQUIVALENTS—Beginning of year	486,727	222,874
CASH AND CASH EQUIVALENTS—End of period	707,593	284,431
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid on deposits and borrowed funds	35,607	24,869
Income taxes paid	38,717	37,216
Transfers to other real estate owned and repossessed vehicles from loans	1,340	518
Transfers from loans held for investment to loans held for sale	0	7,985
Transfers from loans held for sale to loans held for investment	2,047	18,846
Securities transferred from held-to-maturity to available-for-sale portfolio	$ 194,153	$ 0

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BASIS OF PRESENTATION

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The condensed consolidated financial statements include the accounts of BofI Holding, Inc. and its wholly owned subsidiary, BofI Federal Bank (the “Bank” and collectively with BofI Holding, Inc., the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the six months ended December 31, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”)with respect to interim financial reporting. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended June 30, 2016 included in our Annual Report on Form 10-K.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

Securities. Debt securities are classified as held-to-maturity and carried at amortized cost when management has both the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Trading securities refer to certain types of assets that banks hold for resale at a profit or when the Company elects to account for certain securities at fair value. Increases or decreases in the fair value of trading securities are recognized in earnings as they occur. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. During the quarter ended September 30, 2016, the Company elected to reclassify all of its held-to-maturity securities to available-for-sale. See Note 4 – “Securities” for further information.

Gains and losses on securities sales are based on a comparison of sales proceeds and the amortized cost of the security sold using the specific identification method. Purchases and sales are recognized on the trade date. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized or accreted using the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company’s portfolios of held-to-maturity and available-for-sale securities are reviewed quarterly for other-than-temporary impairment. In performing this review, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) how to record an impairment by assessing whether the Company intends to sell or it is more likely than not that it will be required to sell a security in an unrealized loss position before the Company recovers the security’s amortized cost. If either of these criteria for (4) is met, the entire difference between amortized cost and fair value is recognized in earnings. Alternatively, if the criteria for (4) is not met, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Loans and Leases. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred purchase premiums and discounts, deferred loan origination fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Premiums and discounts on loans purchased as well as loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method.

The Company provides equipment financing to its customers through a variety of lease arrangements. The most common arrangement is a direct financing (capital) lease. For direct financing leases, lease receivables are recorded on the balance sheet but the leased property is not, although the Company generally retains legal title to the leased property until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized over the weighted average life of the lease portfolio. Leases acquired in an acquisition are initially measured and recorded at their fair value on the acquisition date. Purchase discounts or premiums on acquired leases are recognized as an adjustment to interest income over the contractual life of the leases using the effective interest method or taken into income when the related leases are paid off. Direct financing leases are subject to our allowance for loans and leases.

Recognition of interest income on all portfolio segments is generally discontinued at the time the loan or lease is 90 days delinquent unless the loan or lease is well secured and in process of collection. Past due status is based on the contractual terms of the loan or lease. In all cases, loans or leases are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans or leases placed on nonaccrual, is reversed against interest income. Interest received on such loans or leases is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans and leases are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans Held for Sale. U.S government agency (“agency”) loans originated and intended for sale in the secondary market are carried at fair value. Net unrealized gains and losses are recognized through the income statement. The Bank sells its mortgage loans with either servicing released or servicing retained depending upon market pricing. Gains and losses on loan sales are recorded as mortgage banking income, based on the difference between sales proceeds and carrying value. Non-agency loans held for sale are carried at the lower of cost or fair value.

Loans that were originated with the intent and ability to hold for the foreseeable future (loans held in portfolio) but which have been subsequently designated as being held for sale for risk management or liquidity needs are carried at the lower of cost or fair value calculated on an individual loan by loan basis.

There may be times when loans have been classified as held for sale and for some reason cannot be sold. Loans transferred to a long-term-investment classification from held-for-sale are transferred at the lower of cost or market value on the transfer date. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. A loan cannot be classified as a long-term investment unless the Bank has both the ability and the intent to hold the loan for the foreseeable future or until maturity.

Allowance for Loan and Lease Losses. The allowance for loan and lease losses is maintained at a level estimated to provide for probable incurred losses in the loan and lease portfolio. Management determines the adequacy of the allowance based on reviews of individual loans and leases and pools of loans, recent loss experience, current economic conditions, the risk characteristics of the various categories of loans and other pertinent factors. This evaluation is inherently subjective and requires estimates that are susceptible to significant revision as more information becomes available. The allowance is increased by the provision for loan and lease losses, which is charged against current period operating results and recoveries of loans previously charged-off. The allowance is decreased by the amount of charge-offs of loans deemed uncollectible. Allocations of the allowance may be made for specific loans but the entire allowance is available for any loan that, in management’s judgment, should be charged off. See Note 5 of these financial statement footnotes and the financial statement footnotes for the year ended June 30, 2016 included in our Annual Report on Form 10-K for further information.

Brand Partnership Products. The Bank has agreements with H&R Block, Inc. (“H&R Block”) and its wholly-owned subsidiaries that allow the Bank to provide H&R Block-branded financial products and services. The products and services that represent the primary focus and the majority of transactional volume that the Bank processes are described in detail below.

The first product is Emerald Prepaid MasterCard® services. The Bank entered into agreements to offer this product in August 2015. Under the agreements, the Bank is responsible for the primary oversight and control of the prepaid card programs of a wholly-owned subsidiary of H&R Block. The Bank holds the prepaid card customer deposits for those cards issued under the prepaid programs in non-interest bearing accounts and earns a fixed fee paid by H&R Block’s subsidiary for each automated clearing house (“ACH”) transaction processed through the prepaid card customer accounts. A portion of H&R Block’s customers use the Emerald Card as an option to receive federal and state income tax refunds. The prepaid customer deposits are included in non-interest bearing deposit liabilities on the balance sheet of the Company and the ACH fee income is included in the income statement under the line banking service fees and other income.

The second product is Refund Transfer. The Bank entered into agreements to offer this product in August 2015. The Bank is responsible for the primary oversight and control of the refund transfer program of a wholly-owned subsidiary of H&R Block. The Bank opens a temporary bank account for each H&R Block customer who is receiving an income tax refund and elects to defer payment of his or her tax preparation fees. After the Internal Revenue Service and any state income tax authorities transfer the refund into the customer’s account, the net funds are transferred to the customer and the temporary deposit account is closed. The Bank earns a fixed fee paid by H&R Block for each of the H&R Block customers electing a Refund Transfer. The fees are earned primarily in the quarters ending March 31st and are included in the income statement under the line banking service fees and other income.

The third product is Emerald Advance. The Bank entered into agreements to offer this product in August 2015. Under the agreements the Bank is responsible for the underwriting guidelines and credit policies for unsecured consumer lines of credit offered to H&R Block customers. The Bank offers and funds unsecured lines of credit to consumers primarily through the H&R Block tax preparation offices and earns interest income and fee income. The Bank retains 10% of the Emerald Advance and sells the remainder to H&R Block. The lines of credit are included in loans and leases on the balance sheet of the Company and the interest income and fee income are included in the income statement under the line loans and leases interest and dividend income.

The fourth product is an Individual Retirement Account (“IRA”). The Bank entered into agreements to offer this product in August 2015, but the initial offering of this product through H&R Block offices occurs in conjunction with the tax season ending April 18, 2017. The Bank is responsible for the primary oversight and control of the IRA product. During a tax preparation session with an H&R Block tax preparer, the customer is given an option to open a traditional IRA or Roth IRA savings account with the Bank. If the customer elects the option to open an account and meets the Bank’s requirements, an account is opened on the Bank’s core operating system under the Bank’s oversight and control. The customer has the option to deposit funds for the IRA through check or ACH. The Bank provides IRA custodial services, earns a nominal fee paid by the customers for any account closures or transfers out, and pays customers interest based on their IRA balance. The fees are included in the income statement under the line banking service fees and other income and interest paid is included under the line deposit interest expense.

The fifth product is an interest-free Refund Advance loan. The Bank entered into agreements to offer this product in October 2016. Under the agreements the Bank will perform disbursement and repayment services and provide funding for interest-free Refund Advance loans to H&R Block customers. The Bank, in conjunction with its agreement partners, offers and funds interest-free loans to consumers, secured by the consumer’s tax refund receivable, primarily through the H&R Block tax preparation offices and earns fee income. The average life of the Refund Advance loan is expected to be ten days. The Bank retains the Refund Advance loans that it funds and will be included in loans and leases on the balance sheet of the Company and fee income will be included in the income statement under the line banking service fees and other income.

New Accounting Pronouncements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2015-03 Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Under the amended guidance, debt issuance costs related to a recognized debt liability are required to be presented as deductions from the carrying amounts of the corresponding debt liabilities, consistent with the presentation of debt discounts and premiums. The amended guidance was adopted for the quarter ended September 30, 2016 and applied retrospectively in accordance with the amended guidance, wherein the balance sheet of each individual period presented has been adjusted to reflect the period-specific effects of applying the amended guidance. The adoption of this guidance did not materially impact our consolidated financial position or consolidated results of operations.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account. ASU 2016-13 also requires certain incremental disclosures. ASU 2016-13 should be applied on a modified-retrospective transition approach that would require a cumulative-effect adjustment to the opening retained earnings in the statement of financial condition as of the date of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The guidance will be effective for the Company’s financial statements that include periods beginning July 1, 2020. Early adoption is permitted beginning July 1, 2019. The Company is currently evaluating the impact of this ASU and the Company expects ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

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FAIR VALUE

6 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE

FAIR VALUE

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurement, also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 1 assets and liabilities include debt and equity securities that are actively traded in an exchange or over-the-counter market and are highly liquid, such as, among other assets and securities, certain U.S. treasury and other U.S. government debt.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; 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 or liabilities. Level 2 assets include securities with quoted prices that are traded less frequently than exchange-traded instruments and whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

When available, the Company generally uses quoted market prices to determine fair value, in which case the items are classified in Level 1. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2.

The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and should be given little, if any, weight in measuring fair value.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified:

Securities—trading. Trading securities are recorded at fair value. The trading portfolio consists of two different issues of floating-rate debt securities collateralized by pools of bank trust preferred securities. Recent liquidity and economic uncertainty have made the market for collateralized debt obligations less active or inactive. As quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying assets. The Company’s expected cash flows are calculated for each security and include the impact of actual and forecasted bank defaults within each collateral pool as well as structural features of the security’s tranche such as lock outs, subordination and overcollateralization. The forecast of underlying bank defaults in each pool is based upon a quarterly financial update including the trend in non-performing assets, the allowance for loan and lease losses and the underlying bank’s capital ratios. Also a factor is the Company’s loan and lease loss experience in the local economy in which the bank operates. At December 31, 2016, the Company’s forecast of cash flows for both securities includes actual and forecasted defaults totaling 17.9% of all banks in the collateral pools, compared to 16.1% of the banks actually in default. The expected cash flows reflect the Company’s best estimate of all pool losses which are then applied to the overcollateralization reserve and the subordinated tranches to determine the cash flows. The Company selects a discount rate margin based upon the spread between U.S. Treasury rates and the market rates for active credit grades for financial companies. The discount margin when added to the U.S. Treasury rate determines the discount rate, reflecting primarily market liquidity and interest rate risk since expected credit loss is included in the cash flows. At December 31, 2016, the Company used a weighted average discount margin of 475 basis points above U.S. Treasury rates to calculate the net present value of the expected cash flows and the fair value of its trading securities.

The Level 3 fair values determined by the Company for its trading securities rely heavily on management’s assumptions as to the future credit performance of the collateral banks, the impact of the global and regional economic activity, the timing of forecasted defaults and the discount rate applied to cash flows. The fair value of the trading securities at December 31, 2016 is sensitive to an increase or decrease in the discount rate. An increase in the discount margin of 100 basis points would have reduced the total fair value of the trading securities and decreased net income before income tax by $803. A decrease in the discount margin of 100 basis points would have increased the total fair value of the trading securities and increased net income before income tax by $921.

Securities—available-for-sale and held-to-maturity. Available-for-sale (“AFS”) securities are recorded at fair value and consist of residential mortgage-backed securities (“RMBS”) issued by U.S. agencies, non-agencies, collateralized loan obligations, and municipals. Held-to-maturity (“HTM”) securities are recorded at amortized cost and consist of RMBS issued by U.S. agencies, RMBS issued by non-agencies, and municipals. Fair value for U.S. agency securities is generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. There continues to be significant illiquidity in the market for RMBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency RMBS in the same manner (as described below) whether available-for-sale or held-to-maturity.

To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. For each security, the Company inputs a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of each security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by (and decreased by) the forecasted decrease or increase in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The national unemployment rate announced prior to the end of the period covered by this report (reported for November 2016) was 4.6%, down from the high of 10.0% in October 2009. Consensus estimates for unemployment are that the rate will continue to decline. Going forward, the Company is projecting lower monthly default rates. The range of loss severity rates applied to each default used in the Company’s projections at December 31, 2016 are from 40.0% up to 68.8% based upon individual bond historical performance. The default rates and the severities are projected for every non-agency RMBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above.

To determine the discount rates used to compute the present value of the expected cash flows for these non-agency RMBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency RMBS securities using market-participant assumptions for risk, capital and return on equity. The range of annual default rates used in the Company’s projections at December 31, 2016 are from 1.5% up to 13.7% with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range. The Company applies its discount rates to the projected monthly cash flows which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at December 31, 2016, the Company computed its discount rates as a spread between 239 and 668 basis points over the interpolated swap curve with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range.

The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of the security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about Level 3 fair value measurements.

Loans Held for Sale. Loans held for sale at fair value are primarily single-family and multifamily residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors.

Impaired Loans. Impaired loans are loans which are inadequately protected by the current net worth and paying capacity of the borrowers or the collateral pledged. The accrual of interest income has been discontinued for impaired loans. The impaired loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The Company assesses loans individually and identifies impairment when the loan is classified as impaired, has been restructured, or management has serious doubts about the future collectibility of principal and interest, even though the loans may currently be performing. The fair value of an impaired loan is determined based on an observable market price or current appraised value of the underlying collateral. The fair value of impaired loans with specific write-offs or allocations of the allowance for loan losses are generally based on recent real estate appraisals or internal valuation analyses consistent with the methodology used in real estate appraisals and include other third-party valuations and analysis of cash flows. These appraisals and analyses are updated at least on an annual basis. The Company primarily obtains real estate appraisals and in the rare cases where an appraisal cannot be obtained, the Company performs an internal valuation analysis. These appraisals and analyses may utilize a single valuation approach or a combination of approaches including comparable sales and income approaches. The sales comparison approach uses at least three recent similar property sales to help determine the fair value of the property being appraised. The income approach is calculated by taking the net operating income generated by the collateral property of the rent collected and dividing it by an assumed capitalization rate. Adjustments are routinely made in the process by the appraisers to account for differences between the comparable sales and income data available. When measuring the fair value of the impaired loan based upon the projected sale of the underlying collateral, the Company subtracts the costs expected to be incurred for the transfer of the underlying collateral, which includes items such as sales commissions, delinquent taxes and insurance premiums. These adjustments to the estimated fair value of non-performing loans may result in increases or decreases to the provision for loan losses recorded in current earnings. Such adjustments are typically significant and result in a Level 3 classification for the inputs for determining fair value.

Other Real Estate Owned and Repossessed Vehicles. Non-recurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at the lower of carrying amount or fair value, less estimated costs to sell. Fair values are generally based on third-party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Mortgage Servicing Rights. The Company initially records all mortgage servicing rights (“MSRs”) at fair value and accounts for MSRs at fair value during the life of the MSR, with changes in fair value recorded through current period earnings. Fair value adjustments encompass market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is imputed from observable market activity and market participants and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset.

Mortgage Banking Derivatives. Fair value for mortgage banking derivatives are either based upon prices in active secondary markets for identical securities or based on quoted market prices of similar assets used to form a dealer quote or a pricing matrix. If no such quoted price exists, the fair value of a commitment is determined by quoted prices for a similar commitment or commitments, adjusted for the specific attributes of each commitment. These fair values are then adjusted for items such as fallout and estimated costs to originate the loan.

The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the Company’s valuation methodologies are appropriate and consistent with or, in some cases, more conservative than other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the relevant reporting date.

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and June 30, 2016. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	8,151	$	8,151
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,264	$	—	$	33,264
Non-Agency RMBS	—		—		82,226		82,226
Municipal	—		29,373		—		29,373
Other Debt Securities	—		234,871		—		234,871
Total—Securities—Available-for-Sale	$	—	$	297,508	$	82,226	$	379,734
Loans Held for Sale	$	—	$	33,990	$	—	$	33,990
Mortgage Servicing Rights	$	—	$	—	$	6,150	$	6,150
Other assets – Derivative Instruments	$	—	$	—	$	2,340	$	2,340
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	89	$	89
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	7,584	$	7,584
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,722	$	—	$	33,722
Non-Agency RMBS	—		—		9,364		9,364
Municipal	—		34,719		—		34,719
Other Debt Securities	—		187,642		—		187,642
Total—Securities—Available-for-Sale	$	—	$	256,083	$	9,364	$	265,447
Loans Held for Sale	$	—	$	20,871	$	—	$	20,871
Mortgage Servicing Rights	$	—	$	—	$	3,943	$	3,943
Other assets – Derivative Instruments	$	—	$	—	$	2,202	$	2,202
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	884	$	884

The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	For the Three Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening balance	$	7,695	$	133,169		$	4,855	$	2,186	$	147,905
Transfers into Level 3	—		—			—		—		—
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(2,569		)	—		—		(2,569		)
Included in earnings—Fair value gain (loss) on trading securities	456		—			—		—		456
Included in earnings—Mortgage banking income	—		—			585		65		650
Included in other comprehensive income	—		1,780			—		—		1,780
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			710		—		710
Issues	—		—			—		—		—
Sales	—		(44,210		)	—		—		(44,210		)
Settlements	—		(4,594		)	—		—		(4,594		)
Other-than-temporary impairment	—		(1,350		)	—		—		(1,350		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	456	$	(2,569	)	$	585	$	65	$	(1,463	)
	For the Six Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening Balance	$	7,584	$	9,364		$	3,943	$	1,318	$	22,209
Transfers into Level 3	—		124,547			—		—		124,547
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(1,868		)	—		—		(1,868		)
Included in earnings—Fair value gain (loss) on trading securities	567		—			—		—		567
Included in earnings—Mortgage banking income	—		—			364		933		1,297
Included in other comprehensive income	—		9,314			—		—		9,314
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			1,843		—		1,843
Issues	—		—			—		—		—
Sales	—		(50,609		)	—		—		(50,609		)
Settlements	—		(7,052		)	—		—		(7,052		)
Other-than-temporary impairment	—		(1,470		)	—		—		(1,470		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	567	$	(1,868	)	$	364	$	933	$	(4	)

	For the Three Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening balance	$	7,902		$	24,993		$	2,687		$	1,018		$	36,600
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain on trading securities	(196		)	—			—			—			(196		)
Included in earnings—Mortgage banking income	—			—			95			13			108
Included in other comprehensive income	—			(715		)	—			—			(715		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			693			—			693
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(369		)	—			—			(369		)
Other-than-temporary impairment	—			(4		)	—			—			(4		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(196	)	$	(680	)	$	95		$	13		$	(768	)
	For the Six Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening Balance	$	7,832		$	26,633		$	2,098		$	2,261		$	38,824
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain (loss) on trading securities	(126		)	—			—			—			(126		)
Included in earnings—Mortgage banking income	—			—			(51		)	(1,230		)	(1,281		)
Included in other comprehensive income	—			(961		)	—			—			(961		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			1,428			—			1,428
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(1,728		)	—			—			(1,728		)
Other-than-temporary impairment	—			(39		)	—			—			(39		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(126	)	$	(680	)	$	(51	)	$	(1,230	)	$	(2,087	)

The table below summarizes the quantitative information about level 3 fair value measurements at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	8,151	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	13.7 to 22.0% (17.8%) 4.75 to 4.75% (4.75%)
Securities – Available-for-Sale: Non-agency RMBS	$	82,226	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.5 to 25.3% (10.0%) 1.5 to 13.7% (4.3%) 40.0 to 68.8% (57.4%) 2.39 to 6.68% (3.61%)
Mortgage Servicing Rights	$	6,150	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	6.6 to 21.7% (9.0%) 2.9 to 8.5 (6.9) 9.5 to 13.0% (9.7%)
Derivative Instruments, net	$	2,251	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.2 to 0.7% (0.5%)

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	7,584	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	11.7 to 21.0% (16.5%) 5.0 to 5.0% (5.0%)
Securities – Available-for-Sale: Non-agency RMBS	$	9,364	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	9.1 to 20.6% (14.2%) 1.5 to 13.6% (6.1%) 40.0 to 68.8% (51.5%) 2.5 to 2.9% (2.8%)
Mortgage Servicing Rights	$	3,943	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	7.8 to 21.8% (10.6%) 3.5 to 7.1 (6.2) 9.5 to 10.5% (9.5%)
Derivative Instruments, net	$	1,318	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.3 to 0.6% (0.4%)

The significant unobservable inputs used in the fair value measurement of the Company’s residential mortgage-backed securities are prepayment rates, probability of default, and loss severity in the event of default. Significant increases (decreases) in any of those inputs in isolation would result in a significantly lower (higher) fair value measurement. Generally, a change in the assumption used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates.

The table below summarizes changes in unrealized gains and losses and interest income recorded in earnings for level 3 trading assets and liabilities that are still held at the periods indicated:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income on investments	$	70	$	60		$	143	$	117
Fair value adjustment	456		(195		)	567		(126		)
Total	$	526	$	(135	)	$	710	$	(9	)

The table below summarizes assets measured for impairment on a non-recurring basis:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,351	$	28,351
Home equity	—		—		47		47
Multifamily real estate secured	—		—		5,478		5,478
Commercial real estate secured	—		—		232		232
Auto and RV secured	—		—		216		216
Other	—		—		445		445
Total	$	—	$	—	$	34,769	$	34,769
Other real estate owned and foreclosed assets:
Single family real estate	$	—	$	—	$	908	$	908
Autos and RVs	—		—		53		53
Total	$	—	$	—	$	961	$	961
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,610	$	28,610
Home equity	—		—		33		33
Multifamily real estate secured	—		—		2,218		2,218
Commercial real estate secured	—		—		254		254
Auto and RV secured	—		—		278		278
Other	—		—		676		676
Total	$	—	$	—	$	32,069	$	32,069
Other real estate owned and foreclosed assets:
Multifamily real estate	—		—		207		207
Autos and RVs	—		—		45		45
Total	$	—	$	—	$	252	$	252
HTM Securities – Non-Agency RMBS	$	—	$	—	$	79,164	$	79,164

Impaired loans measured for impairment on a non-recurring basis using the fair value of the collateral for collateral-dependent loans have a carrying amount of $34,769, after charge-offs of $903 for the six months endedDecember 31, 2016, and life to date charge-offs of $5,665. Impaired loans had a related allowance of $705 at December 31, 2016.

Other real estate owned and foreclosed assets, which are measured at the lower of carrying value or fair value less costs to sell, had a net carrying amount of $961 after charge-offs of $323 for the three months ended December 31, 2016.

Held-to-maturity securities measured for impairment on a non-recurring basis had no fair value and no carrying amount at December 31, 2016, with no net impairment charges to income and no changes to other comprehensive income during the six months ended December 31, 2016. The Company recognized net impairment charges to income of $102 and an increase in other comprehensive income of $3,496 for the six months ended December 31, 2015. These held-to-maturity securities are valued using Level 3 inputs.

The Company has elected the fair value option for Agency loans held for sale. These loans are intended for sale and the Company believes that the fair value is the best indicator of the resolution of these loans. Interest income is recorded based on the contractual terms of the loan. None of these loans are 90 days or more past due nor on nonaccrual as of December 31, 2016 and June 30, 2016.

As of December 31, 2016 and June 30, 2016, the aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows:

(Dollars in thousands)	December 31, 2016		June 30, 2016
Aggregate fair value	$	33,990	$	20,871
Contractual balance	33,232		20,226
Unrealized gain	$	758	$	645

The total amount of unrealized gains and losses from changes in fair value included in earnings for the period indicated below for loans held for sale were:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income	$	192	$	161		$	329	$	433
Change in fair value	99		(286		)	1,046		(1,292		)
Total	$	291	$	(125	)	$	1,375	$	(859	)

The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,351	Sales comparison approach	Adjustment for differences between the comparable sales	-33.3 to 56.4% (-3.0%)
Home equity	$	47	Sales comparison approach	Adjustment for differences between the comparable sales	-7.8 to 22.0% (1.5%)
Multifamily real estate secured	$	5,478	Sales comparison approach, income approach, Discounted cash flows	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	-26.7 to 25.0% (-9.5%)
Commercial real estate secured	$	232	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	0.0 to 23.6% (11.8%)
Auto and RV secured	$	216	Sales comparison approach	Adjustment for differences between the comparable sales	-31.0 to 25.9% (-6.7%)
Other	$	445	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 4.9 to 6.0% (5.4%)
Other real estate owned and foreclosed assets:
Single family real estate	$	908	Sales comparison approach	Adjustment for differences between the comparable sales	-23.0 to 12.5% (-5.3%)
Autos and RVs	$	53	Sales comparison approach	Adjustment for differences between the comparable sales	-5.9 to 16.1% (4.3%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,610	Sales comparison approach	Adjustment for differences between the comparable sales	-40.6 to 69.5% (6.2%)
Home equity	$	33	Sales comparison approach	Adjustment for differences between the comparable sales	-27.2 to 0.0% (-11.1%)
Multifamily real estate secured	$	2,218	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	-29.7 to 58.0% (3.0%)
Commercial real estate secured	$	254	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 66.7% (33.3%)
Auto and RV secured	$	278	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 22.8% (10.6%)
Other	$	676	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 6.6 to 8.0% (7.3%)
Other real estate owned and foreclosed assets:
Multifamily real estate	$	207	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 25.0% (12.5%)
Autos and RVs	$	45	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 20.6% (10.2%)
HTM Securities – Non-Agency RMBS	$	79,164	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.6 to 48.8% (12.0%) 1.5 to 17.8% (5.7%) 40.0 to 65.9% (56.5%) 2.9 to 8.2% (5.7%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

Fair value of Financial Instruments

The carrying amounts and estimated fair values of financial instruments at December 31, 2016 and June 30, 2016 were as follows:

	December 31, 2016
			Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	707,593	$	707,593	$	—	$	—	$	707,593
Securities trading	8,151		—		—		8,151		8,151
Securities available-for-sale	379,734		—		297,508		82,226		379,734
Loans held for sale, at fair value	33,990		—		33,990		—		33,990
Loans held for sale, at lower of cost or fair value	15,905		—		—		16,610		16,610
Loans and leases held for investment—net	6,811,470		—		—		6,982,624		6,982,624
Accrued interest receivable	21,538		—		—		21,538		21,538
Mortgage servicing rights	6,150		—		—		6,150		6,150
Financial liabilities:
Time deposits and savings	6,610,674		—		6,238,765		—		6,238,765
Securities sold under agreements to repurchase	35,000		—		35,640		—		35,640
Advances from the Federal Home Loan Bank	665,000		—		671,061		—		671,061
Subordinated notes and debentures and other	56,408		—		52,401		—		52,401
Accrued interest payable	1,700		—		1,700		—		1,700

	June 30, 2016
	Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	486,727	$	486,727	$	—	$	—	$	486,727
Securities trading	7,584		—		—		7,584		7,584
Securities available-for-sale	265,447		—		256,083		9,364		265,447
Securities held-to-maturity	199,174		—		77,415		125,262		202,677
Loans held for sale, at fair value	20,871		—		20,871		—		20,871
Loans held for sale, at lower of cost or fair value	33,530		—		—		33,530		33,530
Loans and leases held for investment—net	6,354,679		—		—		6,640,918		6,640,918
Accrued interest receivable	26,201		—		—		26,201		26,201
Mortgage servicing rights	3,943		—		—		3,943		3,943
Financial liabilities:
Time deposits and savings	6,044,051		—		5,946,991		—		5,946,991
Securities sold under agreements to repurchase	35,000		—		36,391		—		36,391
Advances from the Federal Home Loan Bank	727,000		—		747,940		—		747,940
Subordinated notes and debentures and other	56,016		—		58,299		—		58,299
Accrued interest payable	1,667		—		1,667		—		1,667

The methods and assumptions, not previously presented, used to estimate fair value are described as follows: Carrying amount is the estimated fair value for cash and cash equivalents, interest bearing deposits, accrued interest receivable and payable, demand deposits, short-term debt, and variable rate loans or deposits that reprice frequently and fully. For fixed rate loans, deposits, borrowings or subordinated debt and for variable rate loans, deposits, borrowings or subordinated debt with infrequent repricing or repricing limits, fair value is based on discounted cash flows using current market rates applied to the estimated life and credit risk. A discussion of the methods of valuing trading securities, available for sale securities and loans held for sale can be found earlier in this footnote. The carrying amount of stock of the Federal Home Loan Bank (“FHLB”) approximates the estimated fair value of this investment. The fair value of off-balance sheet items is not considered material.

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SECURITIES

6 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

SECURITIES

SECURITIES

The amortized cost, carrying amount and fair value for the major categories of securities: trading, available-for-sale, and held-to-maturity at December 31, 2016 and June 30, 2016 were:

	December 31, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,422	$	265	$	(423	)	$	33,264	$	—	$	—	$	—		$	—
Non-agency2	—		79,469		5,800		(3,043		)	82,226		—		—		—			—
Total mortgage-backed securities	—		112,891		6,065		(3,466		)	115,490		—		—		—			—
Other debt securities:
Municipal	—		29,907		15		(549		)	29,373		—		—		—			—
Non-agency	8,151		233,048		1,975		(152		)	234,871		—		—		—			—
Total other debt securities	8,151		262,955		1,990		(701		)	264,244		—		—		—			—
Total debt securities	$	8,151	$	375,846	$	8,055	$	(4,167	)	$	379,734	$	—	$	—	$	—		$	—
	June 30, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,256	$	489	$	(23	)	$	33,722	$	35,067	$	843	$	(1	)	$	35,909
Non-agency2	—		9,043		321		—			9,364		128,211		7,095		(10,044		)	125,262
Total mortgage-backed securities	—		42,299		810		(23		)	43,086		163,278		7,938		(10,045		)	161,171
Other debt securities:
Municipal	—		34,543		185		(10		)	34,718		35,896		5,610		—			41,506
Non-agency	7,584		186,316		1,501		(174		)	187,643		—		—		—			—
Total other debt securities	7,584		220,859		1,686		(184		)	222,361		35,896		5,610		—			41,506
Total debt securities	$	7,584	$	263,158	$	2,496	$	(207	)	$	265,447	$	199,174	$	13,548	$	(10,045	)	$	202,677

__________________________________

^1.  U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

^2.  Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

During the quarter ended September 30, 2016, the Company elected to reclassify all of its HTM securities to AFS. At the time of reclassification, while the Company had the ability to hold those transferred securities to maturity and did not intend to sell the securities, the Company concluded that there were sufficient uncertainties associated with i) future fiscal and monetary policy resulting from domestic and international political changes, ii) future interpretations and applications of new accounting principles and regulatory guidance; iii) the pace of future market interest rate increases given that market interest rates remain at historical lows, all of which could, depending upon the outcomes, change the Company’s intent to hold its securities. Under Accounting Standards Codification 320-10 Investments—Debt Securities, there are very limited exceptions that allow an entity to reclassify or sell one or more securities from HTM and still use the HTM classification for any remaining securities. The Company concluded that such exceptions may not apply to all results and elected to reclassify all HTM securities to AFS understanding that such reclassification immediately eliminated the Company’s ability to use the HTM classification for its securities portfolio for a period of time not to be less than one year. The Company will perform periodic assessments in the future to determine whether the above referenced uncertainties have been resolved and that management has the positive intent and ability to hold securities until maturity. The net carrying amount of the securities reclassified in September 2016 from HTM to AFS was $194,153 and the fair value of AFS securities at December 31, 2016 is reflected in the Unaudited Condensed Consolidated Balance Sheets. The reclassification resulted in an unrealized gain recognized through other comprehensive income of $3,618 in the Unaudited Condensed Consolidated Statements of Comprehensive Income.

The Company’s non-agency RMBS available-for-sale portfolio with a total fair value of $82,226 at December 31, 2016 consists of forty-four different issues of super senior securities with a fair value of $81,210, two mezzanine z-tranche securities, negative-amortizing support tranches, with a fair value of $49 collateralized by seasoned prime and Alt-A first-lien mortgages and one senior support security that it acquired at a significant discount that evidenced credit deterioration at acquisition, with a fair value of $967. The Company acquired its mezzanine z-tranche securities in fiscal 2010 and accounts for them by measuring the excess of cash flows expected at acquisition over the purchase price (accretable yield) and recognizes interest income over the remaining life of the security.

Debt securities with evidence of credit quality deterioration since issuance and for which it is probable at purchase that the Company will be unable to collect all of the par value of the security are accounted for under ASC Topic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (“ASC Topic 310-30”). Under ASC Topic 310-30, the excess of cash flows expected at acquisition over the purchase price is referred to as the accretable yield and is recognized in interest income over the remaining life of the security. The Company has one senior support security that it acquired at a significant discount that evidenced credit deterioration at acquisition and is accounted for under ASC Topic 310-30. For a cost of $17,740 the Company acquired the senior support security with a contractual par value of $30,560 and accretable and non-accretable discounts that were projected to be $9,015 and $3,805, respectively. Since acquisition, repayments from the security have been received more rapidly than projected at acquisition, but expected total payments have declined, resulting in a determination that the security was other-than-temporarily impaired. The security had $1,310 other-than temporary loss for six months ended December 31, 2016 and no charge was recorded for the fiscal 2016 year. At December 31, 2016 the security had a remaining contractual par value of zero dollars and amortizable and non-amortizable premium are currently projected to be zero dollars and $1,162, respectively.

The current face amounts of debt securities available-for-sale and held-to-maturity that were pledged to secure borrowings at December 31, 2016 and June 30, 2016 were $19,352 and $39,961 respectively.

The securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:

	December 31, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	22,228	$	(327	)	$	2,367	$	(96	)	$	24,595	$	(423	)	$	—	$	—		$	—	$	—		$	—	$	—
Non-agency	9,036		(43		)	26,039		(3,000		)	35,075		(3,043		)	—		—			—		—			—		—
Total RMBS securities	31,264		(370		)	28,406		(3,096		)	59,670		(3,466		)	—		—			—		—			—		—
Other Debt:
Municipal Debt	20,204		(531		)	8,317		(18		)	28,521		(549		)	—		—			—		—			—		—
Non-agency	46,342		(132		)	12,368		(20		)	58,710		(152		)	—		—			—		—			—		—
Total Other Debt	66,546		(663		)	20,685		(38		)	87,231		(701		)	—		—			—		—			—		—
Total debt securities	$	97,810	$	(1,033	)	$	49,091	$	(3,134	)	$	146,901	$	(4,167	)	$	—	$	—		$	—	$	—		$	—	$	—
	June 30, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	—	$	—		$	5,094	$	(23	)	$	5,094	$	(23	)	$	129	$	(1	)	$	—	$	—		$	129	$	(1	)
Non-agency	—		—			—		—			—		—			15,011		(419		)	53,372		(9,625		)	68,383		(10,044		)
Total RMBS securities	—		—			5,094		(23		)	5,094		(23		)	15,140		(420		)	53,372		(9,625		)	68,512		(10,045		)
Other Debt:
Municipal Debt	10,267		(10		)	—		—			10,267		(10		)	—		—			—		—			—		—
Non-agency	5,566		(5		)	16,963		(169		)	22,529		(174		)	—		—			—		—			—		—
Total Other Debt	15,833		(15		)	16,963		(169		)	32,796		(184		)	—		—			—		—			—		—
Total debt securities	$	15,833	$	(15	)	$	22,057	$	(192	)	$	37,890	$	(207	)	$	15,140	$	(420	)	$	53,372	$	(9,625	)	$	68,512	$	(10,045	)

There were 15 securities that were in a continuous loss position at December 31, 2016 for a period of more than 12 months. There were 26 securities that were in a continuous loss position at June 30, 2016 for a period of more than 12 months.

The following table summarizes amounts of credit loss recognized in the income statement through other-than-temporary impairment charges which reduced non-interest income:

	For the Three Months Ended						For the Six Months Ended
	December 31,						December 31,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	(20,611	)	$	(20,621	)	$	(20,865	)	$	(20,503	)
Additions for the amounts related to credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			(99		)
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	(1,350		)	(23		)	(1,470		)	(42		)
Credit losses realized for securities sold	5,330			116			5,704			116
Ending balance	$	(16,631	)	$	(20,528	)	$	(16,631	)	$	(20,528	)

At December 31, 2016, non-agency RMBS with a total carrying amount of $48,317 were determined to have cumulative credit losses of $16,631 of which $1,350 was recognized in earnings during the three months ended December 31, 2016. This quarter’s other-than-temporary impairment of $1,350 is related to three non-agency RMBS with a total carrying amount of $7,085. The Company measures its non-agency RMBS in an unrecognized loss position at the end of the reporting period for other-than-temporary impairment by comparing the present value of the cash flows currently expected to be collected from the security with its amortized cost basis. If the calculated present value is lower than the amortized cost, the difference is the credit component of an other-than-temporary impairment of its debt securities. The excess of present value over the fair value of the security (if any) is the non-credit component only if the Company does not intend to sell the security and will not be required to sell the security before recovery of its amortized cost basis. The credit component of the other-than-temporary impairment is recorded as a loss in earnings and the non-credit component as a charge to other comprehensive income, net of the related income tax benefit.

To determine the cash flow expected to be collected and to calculate the present value for purposes of testing for other-than-temporary impairment, the Company utilizes the same industry-standard tool and the same cash flows as those calculated for Level 3 fair values as discussed in Note 3 – Fair Value. The discount rates used to compute the present value of the expected cash flows for purposes of testing for the credit component of the other-than-temporary impairment are either the implicit rate calculated in each of the Company’s securities at acquisition or the last accounting yield. The Company calculates the implicit rate at acquisition based on the contractual terms of the security, considering scheduled payments (and minimum payments in the case of pay-option ARMs) without prepayment assumptions. Once the discount rate (or discount margin in the case of floating rate securities) is calculated as described above, the discount is used in the industry-standard model to calculate the present value of the cash flows.

The gross gains and losses realized through earnings upon the sale of available-for-sale securities for the six months ended December 31, 2016 were as follows:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016			2015		2016			2015
Proceeds	$	95,386		$	10,069	$	121,061		$	10,069
Gross realized gains	5,089			933		6,079			933
Gross realized losses	(3,467		)	—		(3,467		)	—
Net realized gain on securities	$	1,622		$	933	$	2,612		$	933

The Company had recorded unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Available-for-sale debt securities—net unrealized gains	$	3,889		$	2,288
Available-for-sale debt securities—non-credit related losses	(7,560		)	(138		)
Held-to-maturity debt securities—non-credit related losses	—			(14,129		)
Subtotal	(3,671		)	(11,979		)
Tax (expense) benefit	1,169			4,675
Net unrealized gain (loss) on investment securities in accumulated other comprehensive income (loss)	$	(2,502	)	$	(7,304	)

The expected maturity distribution including repayments of the Company’s mortgage-backed securities and other debt securities classified as trading, available-for-sale and held-to-maturity at December 31, 2016 were:

	December 31, 2016
	Trading		Available for sale				Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Fair Value		Carrying Amount		Fair Value
RMBS—U.S. agencies:
Due within one year	$	—	$	1,955	$	1,945	$	—	$	—
Due one to five years	—		6,442		6,426		—		—
Due five to ten years	—		5,730		5,730		—		—
Due after ten years	—		19,295		19,163		—		—
Total RMBS—U.S. agencies	—		33,422		33,264		—		—
RMBS—Non-agency:
Due within one year	—		9,004		9,343		—		—
Due one to five years	—		28,435		29,591		—		—
Due five to ten years	—		22,744		23,441		—		—
Due after ten years	—		19,286		19,851		—		—
Total RMBS—Non-agency	—		79,469		82,226		—		—
Other debt:
Due within one year	—		162,740		163,501		—		—
Due one to five years	55		86,301		87,320		—		—
Due five to ten years	291		59		58		—		—
Due after ten years	7,805		13,855		13,365		—		—
Total other debt	8,151		262,955		264,244		—		—
Total	$	8,151	$	375,846	$	379,734	$	—	$	—

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES

6 Months Ended

Dec. 31, 2016

Receivables [Abstract]

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES

LOANS, LEASES & ALLOWANCE FOR LOAN AND LEASE LOSSES

The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single family real estate secured:
Mortgage	$	3,719,038		$	3,678,520
Home equity	2,412			2,470
Warehouse and other1	480,378			537,714
Multifamily real estate secured	1,451,535			1,373,216
Commercial real estate secured	155,124			121,746
Auto and RV secured	107,430			73,676
Factoring	134,349			98,275
Commercial & Industrial	763,811			514,300
Other	63,441			2,542
Total gross loans and leases	6,877,518			6,402,459
Allowance for loan and lease losses	(40,928		)	(35,826		)
Unaccreted discounts and loan and lease fees	(25,120		)	(11,954		)
Total net loans and leases	$	6,811,470		$	6,354,679

1. The balance of single family warehouse loans was $179,747 at December 31, 2016 and $173,148 at June 30, 2016. The remainder of the balance is attributable to single family lender finance loans.

Allowance for Loan and Lease Losses. We are committed to maintaining the allowance for loan and lease losses (sometimes referred to as the “allowance”) at a level that is considered to be commensurate with estimated probable incurred credit losses in the portfolio. Although the adequacy of the allowance is reviewed quarterly, management performs an ongoing assessment of the risks inherent in the portfolio. While the Company believes that the allowance for loan and lease losses is adequate at December 31, 2016, future additions to the allowance will be subject to continuing evaluation of estimated and known, as well as inherent risks in the loan and lease portfolio.

Allowance for Loan and Lease Loss Disclosures. The assessment of the adequacy of the Company’s allowance for loan and lease losses is based upon a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans and leases, change in volume and mix of loans and leases, collateral values and charge-off history.

The Company provides general loan loss reserves for its automobile (“auto”) and recreational vehicle (“RV”) loans based upon the borrower credit score and the Company’s loss experience to date. The allowance for loan loss for the auto and RV loan portfolio at December 31, 2016 was determined by classifying each outstanding loan according to semi-annually refreshed FICO score and providing loss rates. The Company had $107,214 of auto and RV loan balances subject to general reserves as follows: FICO greater than or equal to 770: $44,551; 715 – 769: $38,248; 700 – 714: $10,740; 660 – 699: $11,824 and less than 660: $1,851.

The Company provides general loan loss reserves for mortgage loans based upon the size and class of the mortgage loan and the loan-to-value ratio (“LTV”) at date of origination. The Company divides the LTV analysis into two classes, separating the purchased loans from the loans underwritten directly by the Company. Based on historical performance, the Company concluded that originated loans require lower estimated loss rates than purchased loans. The allowance for each class is determined by dividing the outstanding unpaid balance for each loan by the loan-to-value and applying a loss rate. The LTV groupings for each significant mortgage class are as follows:

The Company had $3,690,687 of single family mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 60%: $1,946,922; 61% – 70%: $1,348,394; 71% – 80%: $395,171; and greater than 80%: $200.

The Company had $1,446,057 of multifamily mortgage portfolio loan balances subject to general reserves as follows: LTV less than or equal to 55%: $674,726; 56% – 65%: $473,901; 66% – 75%: $284,996; 76% – 80%: $12,434 and greater than 80%: $0.

The Company had $154,892 of commercial real estate loan balances subject to general reserves as follows: LTV less than or equal to 50%: $65,740; 51% – 60%: $36,257; 61% – 70%: $42,558; and 71% – 80%: $10,337.

The Company’s commercial secured portfolio consists of business loans well-collateralized by residential real estate. The Company’s other portfolio consists of receivables factoring for businesses and consumers. The Company allocates its allowance for loan loss for these asset types based on qualitative factors which consider the value of the collateral and the financial position of the issuer of the receivables.

The following tables summarize activity in the allowance for loan and lease losses by portfolio classes for the periods indicated:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2016	$	19,483		$	22		$	2,554		$	3,922		$	917		$	1,914		$	294	$	8,411	$	79		$	37,596
Provision for loan and lease loss	601			(16		)	(375		)	(9		)	84			123			45		1,353		2,294			4,100
Charge-offs	(841		)	—			—			—			—			(66		)	—		—		(31		)	(938		)
Recoveries	—			16			—			—			—			46			—		—		108			170
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2015	$	16,313		$	94		$	2,057		$	4,180		$	961		$	1,339		$	342	$	5,663	$	129		$	31,078
Provision for loan and lease loss	911			(60		)	586			(887		)	(895		)	532			17		939		2,257			3,400
Charge-offs	(61		)	(1		)	—			—			—			(56		)	—		—		—			(118		)
Recoveries	4			12			—			—			670			25			—		—		—			711
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071
	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2016	$	18,666		$	23		$	2,685		$	3,938		$	882		$	1,615		$	245	$	7,630	$	142		$	35,826
Provision for loan and lease loss	1,400			(21		)	(506		)	(25		)	142			449			94		2,134		2,333			6,000
Charge-offs	(868		)	—			—			—			(23		)	(139		)	—		—		(133		)	(1,163		)
Recoveries	45			20			—			—			—			92			—		—		108			265
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2015	$	13,664		$	122		$	1,879		$	4,363		$	1,103		$	953		$	292	$	5,882	$	69		$	28,327
Provision for loan and lease loss	3,418			(96		)	764			(1,070		)	(1,349		)	1,029			67		720		2,317			5,800
Charge-offs	(77		)	(2		)	—			—			—			(206		)	—		—		—			(285		)
Recoveries	162			21			—			—			982			64			—		—		—			1,229
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071

The following tables present our loans and leases evaluated individually for impairment by class:

	December 31, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	9,954		$	1,517		$	8,437		$	937		$	9,374		$	—
Purchased	5,221			2,074			3,147			114			3,261			—
Multifamily Real Estate Secured:
Purchased	2,492			1,178			1,314			—			1,314			—
Commercial Real Estate Secured:
Purchased	630			398			232			100			332			—
Auto and RV Secured:
In-house originated	673			498			175			12			187			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,376			—			14,376			1			14,377			574
Purchased	2,391			—			2,391			6			2,397			64
Home Equity:
In-house originated	47			—			47			—			47			1
Multifamily Real Estate Secured:
In-house originated	4,164			—			4,164			133			4,297			19
Auto and RV Secured:
In-house originated	41			—			41			5			46			2
Other	445			—			445			—			445			45
Total	$	40,434		$	5,665		$	34,769		$	1,308		$	36,077		$	705
As a % of total gross loans and leases	0.59		%	0.08		%	0.51		%	0.02		%	0.52		%	0.01		%

	June 30, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	8,989		$	727		$	8,262		$	657		$	8,919		$	—
Purchased	5,852			2,132			3,720			110			3,830			—
Multifamily Real Estate Secured:
Purchased	2,520			1,093			1,427			—			1,427			—
Commercial Real Estate Secured:
Purchased	629			375			254			61			315			—
Auto and RV Secured:
In-house originated	902			663			239			10			249			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,696			—			14,696			65			14,761			575
Purchased	1,932			—			1,932			5			1,937			46
Home Equity:
In-house originated	33			—			33			—			33			1
Multifamily Real Estate Secured:
In-house originated	791			—			791			65			856			1
Auto and RV Secured:
In-house originated	39			—			39			4			43			2
Other	676						676			—			676			67
Total	$	37,059		$	4,990		$	32,069		$	977		$	33,046		$	692
As a % of total gross loans and leases	0.58		%	0.08		%	0.50		%	0.02		%	0.52		%	0.01		%

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment evaluation method:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	638	$	1	$	—		$	19	$	—	$	2	$	—		$	—	$	45		$	705
Collectively evaluated for impairment	18,605		21		2,179			3,894		1,001		2,015		339			9,764		2,405			40,223
Total ending allowance balance	$	19,243	$	22	$	2,179		$	3,913	$	1,001	$	2,017	$	339		$	9,764	$	2,450		$	40,928
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,351	$	47	$	—		$	5,478	$	232	$	216	$	—		$	—	$	445		$	34,769
Loans and leases collectively evaluated for impairment	3,690,687		2,365		480,378			1,446,057		154,892		107,214		134,349			763,811		62,996			6,842,749
Principal loan and lease balance	3,719,038		2,412		480,378			1,451,535		155,124		107,430		134,349			763,811		63,441			6,877,518
Unaccreted discounts and loan and lease fees	11,693		29		(2,173		)	4,496		812		1,396		(40,115		)	810		(2,068		)	(25,120		)
Accrued interest receivable	8,336		2		1,842			4,541		400		225		219			3,008		533			19,106
Total recorded investment in loans and leases	$	3,739,067	$	2,443	$	480,047		$	1,460,572	$	156,336	$	109,051	$	94,453		$	767,629	$	61,906		$	6,871,504

________________

^1. Loans and leases evaluated for impairment include Troubled Debt Restructurings (“TDRs”) that have been performing for more than six months.

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	621	$	1	$	—		$	1	$	—	$	2	$	—		$	—	$	67		$	692
Collectively evaluated for impairment	18,045		22		2,685			3,937		882		1,613		245			7,630		75			35,134
Total ending allowance balance	$	18,666	$	23	$	2,685		$	3,938	$	882	$	1,615	$	245		$	7,630	$	142		$	35,826
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,610	$	33	$	—		$	2,218	$	254	$	278	$	—		$	—	$	676		$	32,069
Loans and leases collectively evaluated for impairment	3,649,910		2,437		537,714			1,370,998		121,492		73,398		98,275			514,300		1,866			6,370,390
Principal loan and lease balance	3,678,520		2,470		537,714			1,373,216		121,746		73,676		98,275			514,300		2,542			6,402,459
Unaccreted discounts and loan and lease fees	13,142		24		(2,200		)	3,957		542		975		(30,533		)	2,172		(33		)	(11,954		)
Accrued interest receivable	12,460		2		1,870			5,409		389		169		327			2,202		3			22,831
Total recorded investment in loans and leases	$	3,704,122	$	2,496	$	537,384		$	1,382,582	$	122,677	$	74,820	$	68,069		$	518,674	$	2,512		$	6,413,336

________________

^1.Loans and leases evaluated for impairment include TDRs that have been performing for more than six months.

Credit Quality Disclosures. Non-performing loans and leases consisted of the following as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	22,814		$	22,958
Purchased	5,331			5,442
Home Equity:
In-house originated	47			33
Multifamily Real Estate Secured:
In-house originated	4,164			791
Purchased	1,314			1,427
Commercial Real Estate Secured:
Purchased	232			254
Total non-performing loans secured by real estate	33,902			30,905
Auto and RV Secured	216			278
Other	445			676
Total non-performing loans and leases	$	34,563		$	31,859
Non-performing loans and leases to total loans and leases	0.50		%	0.50		%

The Company has no loans and leases over 90 days delinquent that are still accruing interest at December 31, 2016. Approximately81.43% of the Company’s non-performing loans and leases are single family first mortgages already written down to 50.55% in aggregate, of the original appraisal value of the underlying properties.

The following tables present the outstanding unpaid balance of loans and leases that are performing and non-performing by portfolio class:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,690,893	$	2,365	$	480,378	$	1,446,057	$	154,892	$	107,214	$	134,349	$	763,811	$	62,996	$	6,842,955
Non-performing	28,145		47		—		5,478		232		216		—		—		445		34,563
Total	$	3,719,038	$	2,412	$	480,378	$	1,451,535	$	155,124	$	107,430	$	134,349	$	763,811	$	63,441	$	6,877,518

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,650,120	$	2,437	$	537,714	$	1,370,998	$	121,492	$	73,398	$	98,275	$	514,300	$	1,866	$	6,370,600
Non-performing	28,400		33		—		2,218		254		278		—		—		676		31,859
Total	$	3,678,520	$	2,470	$	537,714	$	1,373,216	$	121,746	$	73,676	$	98,275	$	514,300	$	2,542	$	6,402,459

The Company divides loan balances when determining general loan loss reserves between purchases and originations as follows:

	December 31, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,629,359	$	61,534	$	3,690,893	$	1,356,627	$	89,430	$	1,446,057	$	142,911	$	11,981	$	154,892
Non-performing	22,814		5,331		28,145		4,164		1,314		5,478		—		232		232
Total	$	3,652,173	$	66,865	$	3,719,038	$	1,360,791	$	90,744	$	1,451,535	$	142,911	$	12,213	$	155,124

	June 30, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,578,629	$	71,491	$	3,650,120	$	1,270,379	$	100,619	$	1,370,998	$	109,370	$	12,122	$	121,492
Non-performing	22,958		5,442		28,400		791		1,427		2,218		—		254		254
Total	$	3,601,587	$	76,933	$	3,678,520	$	1,271,170	$	102,046	$	1,373,216	$	109,370	$	12,376	$	121,746

From time to time the Company modifies loan terms temporarily for borrowers who are experiencing financial stress. These loans are performing and accruing and will generally return to the original loan terms after the modification term expires.

Approximately 8.34% of our non-performing loans and leases at December 31, 2016 were considered TDRs, compared to 9.63% at June 30, 2016. Borrowers that make timely payments after TDRs are considered non-performing for at least six months. Generally, after six months of timely payments, those TDRs are reclassified from the non-performing loan and lease category to the performing loan and lease category and any previously deferred interest income is recognized.

The Company classifies these loans as performing loans temporarily modified as TDR and are included in impaired loans and leases as follows:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	206	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	206
Non-performing loans and leases	28,145		47		—		5,478		232		216		—		—		445		34,563
Total impaired loans and leases	$	28,351	$	47	$	—	$	5,478	$	232	$	216	$	—	$	—	$	445	$	34,769
	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	210	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	210
Non-performing loans and leases	28,400		33		—		2,218		254		278		—		—		676		31,859
Total impaired loans and leases	$	28,610	$	33	$	—	$	2,218	$	254	$	278	$	—	$	—	$	676	$	32,069

The Company recognizes interest on performing loans temporarily modified as TDR, which is shown in conjunction with average balances as follows:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3
Average balances of performing TDRs	$	207	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	207
Average balances of impaired loans	$	31,855	$	40	$	—	$	5,606	$	232	$	262	$	—	$	—	$	510	$	38,505
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	2	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	2
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,195	$	8	$	—	$	5,064	$	1,045	$	321	$	—	$	—	$	—	$	28,633

	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6
Average balances of performing TDRs	$	208	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	208
Average balances of impaired loans	$	30,773	$	37	$	—	$	4,476	$	239	$	267	$	—	$	—	$	565	$	36,357
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	4
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,483	$	8	$	—	$	5,176	$	1,406	$	365	$	—	$	—	$	—	$	29,438

The Company’s loan modifications primarily included single family, multifamily and commercial loans of which included one or a combination of the following: a reduction of the stated interest rate or delinquent property taxes that were paid by the Bank and either repaid by the borrower over a one year period or capitalized and amortized over the remaining life of the loan. The Company’s loan modifications also included RV loans in which borrowers were able to make interest-only payments for a period of six months to one year which then reverted back to fully amortizing.

Credit Quality Indicators

The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases based on credit risk. The Company uses the following definitions for risk ratings.

Pass. Loans and leases classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention. Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the institution’s credit position at some future date.

Substandard. Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The Company reviews and grades loans and leases following a continuous review process, featuring coverage of all loan and lease types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.

The following table presents the composition of the Company’s loan and lease portfolio by credit quality indicators:

	December 31, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,610,703		$	18,656		$	22,814		$	—		$	3,652,173
Purchased	60,879			353			5,633			—			66,865
Home Equity:
In-house originated	2,363			—			49			—			2,412
Warehouse and other:
In-house originated	479,383			—			995			—			480,378
Multifamily Real Estate Secured:
In-house originated	1,353,379			3,248			4,164			—			1,360,791
Purchased	88,392			—			2,352			—			90,744
Commercial Real Estate Secured:
In-house originated	142,911			—			—			—			142,911
Purchased	9,992			1,989			232			—			12,213
Auto and RV Secured:
In-house originated	107,077			100			253			—			107,430
Factoring	134,349			—			—			—			134,349
Commercial & Industrial	763,537			274			—			—			763,811
Other	62,996			—			445			—			63,441
Total	$	6,815,961		$	24,620		$	36,937		$	—		$	6,877,518
As a % of total gross loans and leases	99.1		%	0.4		%	0.5		%	—		%	100.0		%
	June 30, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,563,430		$	10,938		$	27,219		$	—		$	3,601,587
Purchased	71,111			—			5,822			—			76,933
Home Equity:
In-house originated	2,420			17			33			—			2,470
Warehouse and other:
In-house originated	534,868			2,846			—			—			537,714
Multifamily Real Estate Secured:
In-house originated	1,262,384			4,721			4,065			—			1,271,170
Purchased	96,792			2,769			2,485			—			102,046
Commercial Real Estate Secured:
In-house originated	109,370			—			—			—			109,370
Purchased	10,110			2,012			254			—			12,376
Auto and RV Secured:
In-house originated	73,192			97			387			—			73,676
Factoring	98,275			—			—			—			98,275
Commercial & Industrial	513,310			—			990			—			514,300
Other	1,715			151			676			—			2,542
Total	$	6,336,977		$	23,551		$	41,931		$	—		$	6,402,459
As a % of total gross loans and leases	99.0		%	0.4		%	0.6		%	—		%	100.0		%

The Company considers the performance of the loan and lease portfolio and its impact on the allowance for loan and lease losses. The Company also evaluates credit quality based on the aging status of its loans and leases. The following table provides the outstanding unpaid balance of loans and leases that are past due 30 days or more by portfolio class as of the period indicated:

	December 31, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage:
In-house originated	$	4,523		$	5,356		$	22,787		$	32,666
Purchased	804			165			2,701			3,670
Home equity:
In-house originated	—			—			45			45
Multifamily real estate secured:
In-house originated	576			—			4,164			4,740
Commercial real estate secured:
Purchased	—			—			232			232
Auto and RV secured	477			139			82			698
Other	—			—			445			445
Total	$	6,380		$	5,660		$	30,456		$	42,496
As a % of total gross loans and leases	0.10		%	0.08		%	0.44		%	0.62		%
	June 30, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage
In-house originated	$	5,192		$	1,866		$	21,722		$	28,780
Purchased	572			—			2,538			3,110
Home equity
In-house originated	—			17			29			46
Multifamily real estate secured
In-house originated	3,594			—			791			4,385
Commercial real estate secured
Purchased	—			—			254			254
Auto and RV secured
In-house originated	200			136			104			440
Commercial and industrial	142			—			—			142
Other	62			151			676			889
Total	$	9,762		$	2,170		$	26,114		$	38,046
As a % of total gross loans and leases	0.15		%	0.03		%	0.41		%	0.59		%

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SUBORDINATED NOTES AND DEBENTURES

6 Months Ended

Dec. 31, 2016

Debt Disclosure [Abstract]

SUBORDINATED NOTES AND DEBENTURES

SUBORDINATED NOTES AND DEBENTURES

Subordinated Notes. In March 2016, the Company completed the sale of $51,000 aggregate principal amount of its 6.25% Subordinated Notes due February 28, 2026 (the “Notes”). The Company received $51,000 in gross proceeds as a part of this transaction, before the 3.15% underwriting discount and other offering expenses. The Notes mature on February 28, 2026 and accrue interest at a rate of 6.25% per annum, with interest payable quarterly. The Notes may be redeemed on or after March 31, 2021, which date may be extended at the Company’s discretion, at a redemption price equal to principal plus accrued and unpaid interest, subject to certain conditions.

Subordinated Debentures. On December 13, 2004, the Company entered into an agreement to form an unconsolidated trust which issued $5,000 of trust preferred securities in a transaction that closed on December 16, 2004. The net proceeds from the offering were used to purchase $5,155 of subordinated debentures (the “Debentures”) of the Company with a stated maturity date of February 23, 2035. The Debentures are the sole assets of the trust. The trust preferred securities are mandatorily redeemable upon maturity, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Debentures in whole, but not in part, on or after specific dates, at a redemption price specified in the indenture plus any accrued but unpaid interest through the redemption date. Interest accrues at the rate of 3 months LIBOR plus 2.4% for a rate of 3.32% as of December 31, 2016, with interest paid quarterly starting February 16, 2005.

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EQUITY AND STOCK-BASED COMPENSATION

6 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

EQUITY AND STOCK-BASED COMPENSATION

EQUITY AND STOCK-BASED COMPENSATION

On March 17, 2016, the Board of Directors of the Company, authorized a program to repurchase up to $100 million of common stock. The new share repurchase authorization replaces the previous share repurchase plan approved on July 5, 2005. The Company may repurchase shares on the open market or through privately negotiated transactions at times and prices considered appropriate, at the discretion of the Company, and subject to its assessment of alternative uses of capital, stock trading price, general market conditions and regulatory factors. The repurchase program does not obligate the Company to acquire any specific number of shares. The share repurchase program will continue in effect until terminated by the Board of Directors of the Company.

The Company has two equity incentive plans, the 2014 Stock Incentive Plan (the “2014 Plan”) and the 2004 Stock Incentive Plan (the “2004 Plan” and collectively, the “Plans”), which provide for the granting of non-qualified and incentive stock options, restricted stock and restricted stock units, stock appreciation rights and other awards to employees, directors and consultants. The Plans are designed to encourage selected employees and directors to improve operations and increase profits, and to accept or continue employment or association with the Company through participation in the growth in the value of the common stock. The Plans require that option exercise prices be not less than fair market value per share of common stock on the option grant date for incentive and non-qualified options. The options issued under the Plans generally vest in between three and five years. Option expiration dates are established by the Plans’ administrator but may not be later than ten years after the date of the grant.

2004 Stock Incentive Plan. In October 2004, the Company’s Board of Directors and the stockholders approved the 2004 Plan. In November 2007, the 2004 Plan was amended and approved by the Company’s stockholders. With the stockholders approving the 2014 Plan in October 2014, no further awards will be made under the 2004 Plan and the 2004 Plan will remain in effect only so long as awards made thereunder remain outstanding.

2014 Stock Incentive Plan. In September and October 2014, the Company’s Board of Directors and stockholders approved the 2014 Plan, respectively. The maximum number of shares of common stock available for issuance under the 2014 Plan is 3,680,000.

Stock Options. At December 31, 2016 and June 30, 2016 there were no outstanding stock options and all expense related to stock option grants has been fully recognized.

Restricted Stock and Restricted Stock Units. Employees and directors are eligible to receive grants of restricted stock and restricted stock units. The Company determines stock-based compensation expense using the fair value method. The fair value of restricted stock and restricted stock units is equal to the closing sale price of the Company’s common stock on the date of grant.

During the six months ended December 31, 2016 and 2015, the Company granted 804,518 and 614,721 restricted stock units, to employees and directors, respectively. Restricted stock unit awards (“RSUs”) granted during these quarters generally vest over three years, one-third on each anniversary date, except for any RSUs granted to our CEO, which vest one-fourth on each fiscal year end.

The Company’s income before income taxes and net income for the three months ended December 31, 2016 and December 31, 2015 include stock award expense of $3,413 and $2,858, with total income tax benefit of $1,432 and $1,201, respectively. For the six months ended December 31, 2016 and December 31, 2015 stock award expense was $6,450 and $5,116, with total income tax benefit of $2,705 and $2,137, respectively. The Company recognizes compensation expense based upon the grant-date fair value divided by the vesting and the service period between each vesting date. At December 31, 2016, unrecognized compensation expense related to non-vested awards aggregated to $29,216 and is expected to be recognized in future periods as follows:

(Dollars in thousands)	Stock Award Compensation Expense
For the fiscal year remainder:
2017	$	7,291
2018	11,905
2019	7,692
2020	2,328
Total	$	29,216

The following table presents the status and changes in restricted stock unit grants for the periods indicated:

	Restricted Stock Unit Shares		Weighted-Average Grant-Date Fair Value
Non-vested balance at June 30, 2015	1,135,088		$	17.01
Granted	615,834		26.60
Vested	(536,528	)	16.14
Canceled	(154,668	)	18.70
Non-vested balance at June 30, 2016	1,059,726		$	22.53
Granted	804,518		20.80
Vested	(247,875	)	20.29
Canceled	(45,566	)	19.11
Non-vested balance at December 31, 2016	1,570,803		$	22.1

The total fair value of shares vested for the three and six months ended December 31, 2016 was $2,293 and $5,289. The total fair value of shares vested for the three and six months ended December 31, 2015 was $1,655 and $7,147.

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EARNINGS PER SHARE ("EPS")

6 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (“EPS”)

Basic EPS excludes dilution and is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if stock options or other contracts to issue common stock were exercised or converted to common stock that would then share in the Company’s earnings.

The following table presents the calculation of basic and diluted EPS:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands, except per share data)	2016			2015			2016			2015
Earnings Per Common Share
Net income	$	32,300		$	28,149		$	61,197		$	53,650
Preferred stock dividends	(78		)	(78		)	(155		)	(155		)
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	63,341,437			62,999,335			63,312,805			62,741,596
Average unvested RSU shares	1,520,103			1,431,998			1,412,167			1,309,243
Total qualifying shares	64,861,540			64,431,333			64,724,972			64,050,839
Earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84
Diluted Earnings Per Common Share
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Dilutive net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	64,861,540			64,431,333			64,724,972			64,050,839
Dilutive effect of stock options	—			1,323			—			10,982
Total dilutive common shares issued and outstanding	64,861,540			64,432,656			64,724,972			64,061,821
Diluted earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Credit-Related Financial Instruments. The Company is a party to credit-related financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss is represented by the contractual amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance-sheet instruments.

At December 31, 2016, the Company had commitments to originate $66,298 in fixed rate loans and leases and $538,485 in variable rate loans, totaling an aggregate outstanding principal balance of $604,783. Our fixed rate loan and lease commitments to originate had rates ranging from 2.50% to 5.59%. At December 31, 2016, the Company also had commitments to sell $74,494 in fixed rate loans and $3,438 in variable rate loans, totaling an aggregate outstanding principal balance of $77,932.

Commitments to extend credit are agreements to lend to a customer so long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for equity lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The amount of collateral obtained, if it is deemed necessary by the Company, is based on management’s credit evaluation of the customer.

Litigation. On October 15, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a putative class action lawsuit styled Golden v. BofI Holding, Inc., et al, and brought in United States District Court for the Southern District of California (the “Golden Case”). On November 3, 2015, the Company, its Chief Executive Officer and its Chief Financial Officer were named defendants in a second putative class action lawsuit styled Hazan v. BofI Holding, Inc., et al, and also brought in the United States District Court for the Southern District of California (the “Hazan Case”). On February 1, 2016, the Golden Case and the Hazan Case were consolidated as In re BofI Holding, Inc. Securities Litigation, Case #: 3:15-cv-02324-GPC-KSC (the “Class Action”), and the Houston Municipal Employees Pension System was appointed lead plaintiff. The Class Action complaint was amended by a certain Consolidated Amended Class Complaint filed on April 11, 2016. The Class Action plaintiff seeks monetary damages and other relief on behalf of a putative class that has not been certified by the Court.

The complaints filed in the Golden Case and the Hazan Case both allege that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by failing to disclose the wrongful conduct that is alleged in a complaint that was filed in a wrongful termination of employment lawsuit (the “Employment Matter”), and that as a result the Company’s statements regarding its internal controls, as well as portions of its financial statements, were false and misleading. The Company and the other named defendants dispute the allegations of wrongdoing advanced by the plaintiffs in the Class Action and in the Employment Matter, as well as those plaintiffs’ statement of the underlying factual circumstances, and are vigorously defending both cases.

In addition to the Class Action, two separate shareholder derivative actions were filed in December, 2015, purportedly on behalf of the Company. The first derivative action, Calcaterra v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on December 3, 2015. The second derivative action, Dow v. Micheletti, et al, was filed in the San Diego County Superior Court on December 16, 2015. A third derivative action, DeYoung v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 22, 2016, a fourth derivative action, Yong v. Garrabrants, et al, was filed in the United States District Court for the Southern District of California on January 29, 2016, and a fifth derivative action, Laborers Pension Trust Fund of Northern Nevada v. Allrich et al, was filed in the United States District Court for the Southern District of California on February 2, 2016. Each of these five derivative actions names the Company as a nominal defendant, and certain of its officers and directors as defendants. Each complaint sets forth allegations of breaches of fiduciary duties, gross mismanagement, abuse of control, and unjust enrichment against the defendant officers and directors. The plaintiffs in these derivative actions seek damages in unspecified amounts on the Company’s behalf from the officer and director defendants, certain corporate governance actions, and an award of their costs and attorney’s fees. On June 9, 2016, the United States District Court for the Southern District of California ordered the four above-referenced cases pending before it to be consolidated, appointed lead counsel in the consolidated action, and ordered the parties to meet and confer regarding a schedule for the filing of a consolidated complaint and defendants’ response to the complaint. Pursuant to the June 9, 2016 order, counsel have met and conferred regarding proposals for (a) the time for plaintiffs to file a consolidated complaint or provide notice of plaintiffs’ intent to rely upon the original Complaint in Case No. 3:15-cv-02722-GPC-KSC (the “operative complaint”); (b) the time for defendants to respond to the operative complaint; and (c) a schedule for briefing any motion to dismiss that may be filed by a defendant. A stipulation setting forth the agreed litigation schedule has been submitted to the Court. The fifth derivative action, which is pending before the San Diego County Superior Court, has been stayed by agreement of the parties. On September 27, 2016, the Court dismissed the Class Action, with leave to amend, as to defendants Andrew Micheletti, Paul Grinberg, Nicholas Mosich and James Argalas. The Court denied the Motion to Dismiss with respect to the Company and Gregory Garrabrants. The Company and the other defendants dispute the allegations of wrongdoing and are vigorously defending these purported derivative actions. On November 25, 2016, the putative class action plaintiff filed a Second Amended Class Action Complaint, which includes the previously dismissed defendants. On December 23, 2016, the Company and other defendants filed a motion to dismiss such Second Amended Class Action Complaint.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Dec. 31, 2016

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company has granted related party loans collateralized by real property to principal officers, directors and their affiliates that are considered to be insiders by regulation. There were no new related party loans granted under the provisions of the employee loan program and no refinances of existing loans during the six months ended December 31, 2016, and no new loans and no refinances of existing loans during the six months ended December 31, 2015. One of the existing related party loans had a rate modification and term extension, but no change in amount of credit extended during the six months ended December 31, 2016.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2016

Accounting Policies [Abstract]

Consolidation

The condensed consolidated financial statements include the accounts of BofI Holding, Inc. and its wholly owned subsidiary, BofI Federal Bank (the “Bank” and collectively with BofI Holding, Inc., the “Company”). All significant intercompany balances and transactions have been eliminated in consolidation.

Basis of Presentation

The accompanying interim condensed consolidated financial statements, presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), are unaudited and reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition and results of operations for the interim periods. All adjustments are of a normal and recurring nature. Results for the six months ended December 31, 2016 are not necessarily indicative of results that may be expected for any other interim period or for the year as a whole. Certain information and note disclosures normally included in the audited annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”)with respect to interim financial reporting. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended June 30, 2016 included in our Annual Report on Form 10-K.

Securities

Securities. Debt securities are classified as held-to-maturity and carried at amortized cost when management has both the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Trading securities refer to certain types of assets that banks hold for resale at a profit or when the Company elects to account for certain securities at fair value. Increases or decreases in the fair value of trading securities are recognized in earnings as they occur. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax. During the quarter ended September 30, 2016, the Company elected to reclassify all of its held-to-maturity securities to available-for-sale. See Note 4 – “Securities” for further information.

Gains and losses on securities sales are based on a comparison of sales proceeds and the amortized cost of the security sold using the specific identification method. Purchases and sales are recognized on the trade date. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts on securities are amortized or accreted using the level-yield method without anticipating prepayments, except for mortgage-backed securities where prepayments are anticipated. The Company’s portfolios of held-to-maturity and available-for-sale securities are reviewed quarterly for other-than-temporary impairment. In performing this review, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near term prospects of the issuer, (3) the impact of changes in market interest rates on the market value of the security and (4) how to record an impairment by assessing whether the Company intends to sell or it is more likely than not that it will be required to sell a security in an unrealized loss position before the Company recovers the security’s amortized cost. If either of these criteria for (4) is met, the entire difference between amortized cost and fair value is recognized in earnings. Alternatively, if the criteria for (4) is not met, the amount of impairment recognized in earnings is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Loans and Leases

Loans and Leases. Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of unearned interest, deferred purchase premiums and discounts, deferred loan origination fees and costs, and an allowance for loan losses. Interest income is accrued on the unpaid principal balance. Premiums and discounts on loans purchased as well as loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method.

The Company provides equipment financing to its customers through a variety of lease arrangements. The most common arrangement is a direct financing (capital) lease. For direct financing leases, lease receivables are recorded on the balance sheet but the leased property is not, although the Company generally retains legal title to the leased property until the end of each lease. Direct financing leases are stated at the net amount of minimum lease payments receivable, plus any unguaranteed residual value, less the amount of unearned income and net acquisition discount at the reporting date. Direct lease origination costs are amortized over the weighted average life of the lease portfolio. Leases acquired in an acquisition are initially measured and recorded at their fair value on the acquisition date. Purchase discounts or premiums on acquired leases are recognized as an adjustment to interest income over the contractual life of the leases using the effective interest method or taken into income when the related leases are paid off. Direct financing leases are subject to our allowance for loans and leases.

Recognition of interest income on all portfolio segments is generally discontinued at the time the loan or lease is 90 days delinquent unless the loan or lease is well secured and in process of collection. Past due status is based on the contractual terms of the loan or lease. In all cases, loans or leases are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not received for loans or leases placed on nonaccrual, is reversed against interest income. Interest received on such loans or leases is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans and leases are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans Held for Sale

Loans Held for Sale. U.S government agency (“agency”) loans originated and intended for sale in the secondary market are carried at fair value. Net unrealized gains and losses are recognized through the income statement. The Bank sells its mortgage loans with either servicing released or servicing retained depending upon market pricing. Gains and losses on loan sales are recorded as mortgage banking income, based on the difference between sales proceeds and carrying value. Non-agency loans held for sale are carried at the lower of cost or fair value.

Loans that were originated with the intent and ability to hold for the foreseeable future (loans held in portfolio) but which have been subsequently designated as being held for sale for risk management or liquidity needs are carried at the lower of cost or fair value calculated on an individual loan by loan basis.

There may be times when loans have been classified as held for sale and for some reason cannot be sold. Loans transferred to a long-term-investment classification from held-for-sale are transferred at the lower of cost or market value on the transfer date. Any difference between the carrying amount of the loan and its outstanding principal balance is recognized as an adjustment to yield by the interest method. A loan cannot be classified as a long-term investment unless the Bank has both the ability and the intent to hold the loan for the foreseeable future or until maturity.

Allowance for Loan and Lease Losses

Allowance for Loan and Lease Losses. The allowance for loan and lease losses is maintained at a level estimated to provide for probable incurred losses in the loan and lease portfolio. Management determines the adequacy of the allowance based on reviews of individual loans and leases and pools of loans, recent loss experience, current economic conditions, the risk characteristics of the various categories of loans and other pertinent factors. This evaluation is inherently subjective and requires estimates that are susceptible to significant revision as more information becomes available. The allowance is increased by the provision for loan and lease losses, which is charged against current period operating results and recoveries of loans previously charged-off. The allowance is decreased by the amount of charge-offs of loans deemed uncollectible. Allocations of the allowance may be made for specific loans but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

New Accounting Pronouncements

New Accounting Pronouncements. In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (ASU) 2015-03 Interest-Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs. Under the amended guidance, debt issuance costs related to a recognized debt liability are required to be presented as deductions from the carrying amounts of the corresponding debt liabilities, consistent with the presentation of debt discounts and premiums. The amended guidance was adopted for the quarter ended September 30, 2016 and applied retrospectively in accordance with the amended guidance, wherein the balance sheet of each individual period presented has been adjusted to reflect the period-specific effects of applying the amended guidance. The adoption of this guidance did not materially impact our consolidated financial position or consolidated results of operations.

In June 2016, the FASB issued ASU 2016-13 Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which (i) significantly changes the impairment model for most financial assets that are measured at amortized cost and certain other instruments from an incurred loss model to an expected loss model; and (ii) provides for recording credit losses on available-for-sale debt securities through an allowance account. ASU 2016-13 also requires certain incremental disclosures. ASU 2016-13 should be applied on a modified-retrospective transition approach that would require a cumulative-effect adjustment to the opening retained earnings in the statement of financial condition as of the date of adoption. A prospective transition approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date. The guidance will be effective for the Company’s financial statements that include periods beginning July 1, 2020. Early adoption is permitted beginning July 1, 2019. The Company is currently evaluating the impact of this ASU and the Company expects ASU 2016-13 to have a material impact on the Company’s consolidated financial statements.

Fair Value Measurement

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accounting Standards Codification Topic 820, Fair Value Measurement, also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices in active markets for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 1 assets and liabilities include debt and equity securities that are actively traded in an exchange or over-the-counter market and are highly liquid, such as, among other assets and securities, certain U.S. treasury and other U.S. government debt.

Level 2: Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; 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 or liabilities. Level 2 assets include securities with quoted prices that are traded less frequently than exchange-traded instruments and whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models such as discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

When available, the Company generally uses quoted market prices to determine fair value, in which case the items are classified in Level 1. In some cases where a market price is available, the Company will make use of acceptable practical expedients (such as matrix pricing) to calculate fair value, in which case the items are classified in Level 2.

The Company considers relevant and observable market prices in its valuations where possible. The frequency of transactions, the size of the bid-ask spread and the nature of the participants are some of the factors the Company uses to help determine whether a market is active and orderly or inactive and not orderly. Price quotes based upon transactions that are not orderly are not considered to be determinative of fair value and should be given little, if any, weight in measuring fair value.

If quoted market prices are not available, fair value is based upon internally developed valuation techniques that use, where possible, current market-based or independently sourced market parameters, such as interest rates, credit spreads, housing value forecasts, etc. Items valued using such internally generated valuation techniques are classified according to the lowest level input or value driver that is significant to the valuation. Thus, an item may be classified in Level 3 even though there may be some significant inputs that are readily observable.

Fair Value of Financial Instruments

The following section describes the valuation methodologies used by the Company to measure various financial instruments at fair value, including an indication of the level in the fair value hierarchy in which each instrument is generally classified:

Securities—trading. Trading securities are recorded at fair value. The trading portfolio consists of two different issues of floating-rate debt securities collateralized by pools of bank trust preferred securities. Recent liquidity and economic uncertainty have made the market for collateralized debt obligations less active or inactive. As quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying assets. The Company’s expected cash flows are calculated for each security and include the impact of actual and forecasted bank defaults within each collateral pool as well as structural features of the security’s tranche such as lock outs, subordination and overcollateralization. The forecast of underlying bank defaults in each pool is based upon a quarterly financial update including the trend in non-performing assets, the allowance for loan and lease losses and the underlying bank’s capital ratios. Also a factor is the Company’s loan and lease loss experience in the local economy in which the bank operates. At December 31, 2016, the Company’s forecast of cash flows for both securities includes actual and forecasted defaults totaling 17.9% of all banks in the collateral pools, compared to 16.1% of the banks actually in default. The expected cash flows reflect the Company’s best estimate of all pool losses which are then applied to the overcollateralization reserve and the subordinated tranches to determine the cash flows. The Company selects a discount rate margin based upon the spread between U.S. Treasury rates and the market rates for active credit grades for financial companies. The discount margin when added to the U.S. Treasury rate determines the discount rate, reflecting primarily market liquidity and interest rate risk since expected credit loss is included in the cash flows. At December 31, 2016, the Company used a weighted average discount margin of 475 basis points above U.S. Treasury rates to calculate the net present value of the expected cash flows and the fair value of its trading securities.

The Level 3 fair values determined by the Company for its trading securities rely heavily on management’s assumptions as to the future credit performance of the collateral banks, the impact of the global and regional economic activity, the timing of forecasted defaults and the discount rate applied to cash flows. The fair value of the trading securities at December 31, 2016 is sensitive to an increase or decrease in the discount rate. An increase in the discount margin of 100 basis points would have reduced the total fair value of the trading securities and decreased net income before income tax by $803. A decrease in the discount margin of 100 basis points would have increased the total fair value of the trading securities and increased net income before income tax by $921.

Securities—available-for-sale and held-to-maturity. Available-for-sale (“AFS”) securities are recorded at fair value and consist of residential mortgage-backed securities (“RMBS”) issued by U.S. agencies, non-agencies, collateralized loan obligations, and municipals. Held-to-maturity (“HTM”) securities are recorded at amortized cost and consist of RMBS issued by U.S. agencies, RMBS issued by non-agencies, and municipals. Fair value for U.S. agency securities is generally based on quoted market prices of similar securities used to form a dealer quote or a pricing matrix. There continues to be significant illiquidity in the market for RMBS issued by non-agencies, impacting the availability and reliability of transparent pricing. As orderly quoted market prices are not available, the Level 3 fair values for these securities are determined by the Company utilizing industry-standard tools to calculate the net present value of the expected cash flows available to the securities from the underlying mortgage assets. The Company computes Level 3 fair values for each non-agency RMBS in the same manner (as described below) whether available-for-sale or held-to-maturity.

To determine the performance of the underlying mortgage loan pools, the Company estimates prepayments, defaults, and loss severities based on a number of macroeconomic factors, including housing price changes, unemployment rates, interest rates and borrower attributes such as credit score and loan documentation at the time of origination. For each security, the Company inputs a projection of monthly default rates, loss severity rates and voluntary prepayment rates for the underlying mortgages for the remaining life of each security to determine the expected cash flows. The projections of default rates are derived by the Company from the historic default rate observed in the pool of loans collateralizing the security, increased by and decreased by the forecasted increase or decrease in the national unemployment rate. The projections of loss severity rates are derived by the Company from the historic loss severity rate observed in the pool of loans, increased by (and decreased by) the forecasted decrease or increase in the national home price appreciation (“HPA”) index. The largest factors influencing the Company’s modeling of the monthly default rate are unemployment and HPA, as a strong correlation exists. The national unemployment rate announced prior to the end of the period covered by this report (reported for November 2016) was 4.6%, down from the high of 10.0% in October 2009. Consensus estimates for unemployment are that the rate will continue to decline. Going forward, the Company is projecting lower monthly default rates. The range of loss severity rates applied to each default used in the Company’s projections at December 31, 2016 are from 40.0% up to 68.8% based upon individual bond historical performance. The default rates and the severities are projected for every non-agency RMBS security held by the Company and will vary monthly based upon the actual performance of the security and the macroeconomic factors discussed above.

To determine the discount rates used to compute the present value of the expected cash flows for these non-agency RMBS securities, the Company separates the securities by the borrower characteristics in the underlying pool. Specifically, “prime” securities generally have borrowers with higher FICO scores and better documentation of income. “Alt-A” securities generally have borrowers with a lower FICO and less documentation of income. “Pay-option ARMs” are Alt-A securities with borrowers that tend to pay the least amount of principal (or increase their loan balance through negative amortization). The Company calculates separate discount rates for prime, Alt-A and Pay-option ARM non-agency RMBS securities using market-participant assumptions for risk, capital and return on equity. The range of annual default rates used in the Company’s projections at December 31, 2016 are from 1.5% up to 13.7% with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range. The Company applies its discount rates to the projected monthly cash flows which already reflect the full impact of all forecasted losses using the assumptions described above. When calculating present value of the expected cash flows at December 31, 2016, the Company computed its discount rates as a spread between 239 and 668 basis points over the interpolated swap curve with prime securities tending toward the lower end of the range and Alt-A and Pay-option ARMs tending toward the higher end of the range.

The Bank’s estimate of fair value for non-agency securities using Level 3 pricing is highly subjective and is based on the Bank’s estimate of voluntary prepayments, default rates, severities and discount margins, which are forecasted monthly over the remaining life of the security. Changes in one or more of these assumptions can cause a significant change in the estimated fair value. For further details see the table later in this note that summarizes quantitative information about Level 3 fair value measurements.

Loans Held for Sale. Loans held for sale at fair value are primarily single-family and multifamily residential loans. The fair value of residential loans held for sale is determined by pricing for comparable assets or by existing forward sales commitment prices with investors.

Impaired Loans. Impaired loans are loans which are inadequately protected by the current net worth and paying capacity of the borrowers or the collateral pledged. The accrual of interest income has been discontinued for impaired loans. The impaired loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. The Company assesses loans individually and identifies impairment when the loan is classified as impaired, has been restructured, or management has serious doubts about the future collectibility of principal and interest, even though the loans may currently be performing. The fair value of an impaired loan is determined based on an observable market price or current appraised value of the underlying collateral. The fair value of impaired loans with specific write-offs or allocations of the allowance for loan losses are generally based on recent real estate appraisals or internal valuation analyses consistent with the methodology used in real estate appraisals and include other third-party valuations and analysis of cash flows. These appraisals and analyses are updated at least on an annual basis. The Company primarily obtains real estate appraisals and in the rare cases where an appraisal cannot be obtained, the Company performs an internal valuation analysis. These appraisals and analyses may utilize a single valuation approach or a combination of approaches including comparable sales and income approaches. The sales comparison approach uses at least three recent similar property sales to help determine the fair value of the property being appraised. The income approach is calculated by taking the net operating income generated by the collateral property of the rent collected and dividing it by an assumed capitalization rate. Adjustments are routinely made in the process by the appraisers to account for differences between the comparable sales and income data available. When measuring the fair value of the impaired loan based upon the projected sale of the underlying collateral, the Company subtracts the costs expected to be incurred for the transfer of the underlying collateral, which includes items such as sales commissions, delinquent taxes and insurance premiums. These adjustments to the estimated fair value of non-performing loans may result in increases or decreases to the provision for loan losses recorded in current earnings. Such adjustments are typically significant and result in a Level 3 classification for the inputs for determining fair value.

Other Real Estate Owned and Repossessed Vehicles. Non-recurring adjustments to certain commercial and residential real estate properties classified as other real estate owned (“OREO”) are measured at the lower of carrying amount or fair value, less estimated costs to sell. Fair values are generally based on third-party appraisals of the property, resulting in a Level 3 classification. In cases where the carrying amount exceeds the fair value, less costs to sell, an impairment loss is recognized.

Mortgage Servicing Rights. The Company initially records all mortgage servicing rights (“MSRs”) at fair value and accounts for MSRs at fair value during the life of the MSR, with changes in fair value recorded through current period earnings. Fair value adjustments encompass market-driven valuation changes as well as modeled amortization involving the run-off of value that occurs due to the passage of time as individual loans are paid by borrowers. Market expectations about loan duration, and correspondingly the expected term of future servicing cash flows, may vary from time to time due to changes in expected prepayment activity, especially when interest rates rise or fall. Market expectations of increased loan prepayment speeds may negatively impact the fair value of the single family MSRs. Fair value is also dependent on the discount rate used in calculating present value, which is imputed from observable market activity and market participants and results in Level 3 classification. Management reviews and adjusts the discount rate on an ongoing basis. An increase in the discount rate would reduce the estimated fair value of the MSRs asset.

Mortgage Banking Derivatives. Fair value for mortgage banking derivatives are either based upon prices in active secondary markets for identical securities or based on quoted market prices of similar assets used to form a dealer quote or a pricing matrix. If no such quoted price exists, the fair value of a commitment is determined by quoted prices for a similar commitment or commitments, adjusted for the specific attributes of each commitment. These fair values are then adjusted for items such as fallout and estimated costs to originate the loan.

The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.  While management believes the Company’s valuation methodologies are appropriate and consistent with or, in some cases, more conservative than other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the relevant reporting date.

Credit Quality Indicators

Credit Quality Indicators

The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes loans and leases individually by classifying the loans and leases based on credit risk. The Company uses the following definitions for risk ratings.

Pass. Loans and leases classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention. Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the institution’s credit position at some future date.

Substandard. Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

The Company reviews and grades loans and leases following a continuous review process, featuring coverage of all loan and lease types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.

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FAIR VALUE (Tables)

6 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at December 31, 2016 and June 30, 2016. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	8,151	$	8,151
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,264	$	—	$	33,264
Non-Agency RMBS	—		—		82,226		82,226
Municipal	—		29,373		—		29,373
Other Debt Securities	—		234,871		—		234,871
Total—Securities—Available-for-Sale	$	—	$	297,508	$	82,226	$	379,734
Loans Held for Sale	$	—	$	33,990	$	—	$	33,990
Mortgage Servicing Rights	$	—	$	—	$	6,150	$	6,150
Other assets – Derivative Instruments	$	—	$	—	$	2,340	$	2,340
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	89	$	89
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
ASSETS:
Securities—Trading: Collateralized Debt Obligations	$	—	$	—	$	7,584	$	7,584
Securities—Available-for-Sale:
Agency RMBS	$	—	$	33,722	$	—	$	33,722
Non-Agency RMBS	—		—		9,364		9,364
Municipal	—		34,719		—		34,719
Other Debt Securities	—		187,642		—		187,642
Total—Securities—Available-for-Sale	$	—	$	256,083	$	9,364	$	265,447
Loans Held for Sale	$	—	$	20,871	$	—	$	20,871
Mortgage Servicing Rights	$	—	$	—	$	3,943	$	3,943
Other assets – Derivative Instruments	$	—	$	—	$	2,202	$	2,202
LIABILITIES:
Other liabilities – Derivative Instruments	$	—	$	—	$	884	$	884

Additional Information About Assets Measured at Fair Value on a Recurring Basis and for which the Company has Utilized Level 3 Inputs to Determine Fair Value

The following tables present additional information about assets measured at fair value on a recurring basis and for which the Company has utilized Level 3 inputs to determine fair value:

	For the Three Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening balance	$	7,695	$	133,169		$	4,855	$	2,186	$	147,905
Transfers into Level 3	—		—			—		—		—
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(2,569		)	—		—		(2,569		)
Included in earnings—Fair value gain (loss) on trading securities	456		—			—		—		456
Included in earnings—Mortgage banking income	—		—			585		65		650
Included in other comprehensive income	—		1,780			—		—		1,780
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			710		—		710
Issues	—		—			—		—		—
Sales	—		(44,210		)	—		—		(44,210		)
Settlements	—		(4,594		)	—		—		(4,594		)
Other-than-temporary impairment	—		(1,350		)	—		—		(1,350		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	456	$	(2,569	)	$	585	$	65	$	(1,463	)
	For the Six Months Ended
	December 31, 2016
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations		Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights		Derivative Instruments, net		Total
Opening Balance	$	7,584	$	9,364		$	3,943	$	1,318	$	22,209
Transfers into Level 3	—		124,547			—		—		124,547
Transfers out of Level 3	—		—			—		—		—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—		(1,868		)	—		—		(1,868		)
Included in earnings—Fair value gain (loss) on trading securities	567		—			—		—		567
Included in earnings—Mortgage banking income	—		—			364		933		1,297
Included in other comprehensive income	—		9,314			—		—		9,314
Purchases, originations, issues, sales and settlements:
Purchases/originations	—		—			1,843		—		1,843
Issues	—		—			—		—		—
Sales	—		(50,609		)	—		—		(50,609		)
Settlements	—		(7,052		)	—		—		(7,052		)
Other-than-temporary impairment	—		(1,470		)	—		—		(1,470		)
Closing balance	$	8,151	$	82,226		$	6,150	$	2,251	$	98,778
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	567	$	(1,868	)	$	364	$	933	$	(4	)

	For the Three Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening balance	$	7,902		$	24,993		$	2,687		$	1,018		$	36,600
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain on trading securities	(196		)	—			—			—			(196		)
Included in earnings—Mortgage banking income	—			—			95			13			108
Included in other comprehensive income	—			(715		)	—			—			(715		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			693			—			693
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(369		)	—			—			(369		)
Other-than-temporary impairment	—			(4		)	—			—			(4		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(196	)	$	(680	)	$	95		$	13		$	(768	)
	For the Six Months Ended
	December 31, 2015
(Dollars in thousands)	Securities – Trading: Collateralized Debt Obligations			Securities – Available-for-Sale: Non-Agency RMBS			Mortgage Servicing Rights			Derivative Instruments, net			Total
Opening Balance	$	7,832		$	26,633		$	2,098		$	2,261		$	38,824
Transfers into Level 3	—			—			—			—			—
Transfers out of Level 3	—			—			—			—			—
Total gains or losses for the period:
Included in earnings—Sale of mortgage-backed securities	—			(680		)	—			—			(680		)
Included in earnings—Fair value gain (loss) on trading securities	(126		)	—			—			—			(126		)
Included in earnings—Mortgage banking income	—			—			(51		)	(1,230		)	(1,281		)
Included in other comprehensive income	—			(961		)	—			—			(961		)
Purchases, originations, issues, sales and settlements:
Purchases/originations	—			—			1,428			—			1,428
Issues	—			—			—			—			—
Sales	—			(2,089		)	—			—			(2,089		)
Settlements	—			(1,728		)	—			—			(1,728		)
Other-than-temporary impairment	—			(39		)	—			—			(39		)
Closing balance	$	7,706		$	21,136		$	3,475		$	1,031		$	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$	(126	)	$	(680	)	$	(51	)	$	(1,230	)	$	(2,087	)

Quantitative Information About Level 3 Fair Value Measurements

The table below summarizes the quantitative information about level 3 fair value measurements at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	8,151	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	13.7 to 22.0% (17.8%) 4.75 to 4.75% (4.75%)
Securities – Available-for-Sale: Non-agency RMBS	$	82,226	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.5 to 25.3% (10.0%) 1.5 to 13.7% (4.3%) 40.0 to 68.8% (57.4%) 2.39 to 6.68% (3.61%)
Mortgage Servicing Rights	$	6,150	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	6.6 to 21.7% (9.0%) 2.9 to 8.5 (6.9) 9.5 to 13.0% (9.7%)
Derivative Instruments, net	$	2,251	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.2 to 0.7% (0.5%)

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique	Unobservable Input	Range (Weighted Average)
Securities – Trading: Collateralized Debt Obligations	$	7,584	Discounted Cash Flow	Total Projected Defaults, Discount Rate over Treasury	11.7 to 21.0% (16.5%) 5.0 to 5.0% (5.0%)
Securities – Available-for-Sale: Non-agency RMBS	$	9,364	Discounted Cash Flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	9.1 to 20.6% (14.2%) 1.5 to 13.6% (6.1%) 40.0 to 68.8% (51.5%) 2.5 to 2.9% (2.8%)
Mortgage Servicing Rights	$	3,943	Discounted Cash Flow	Projected Constant Prepayment Rate, Life (in years), Discount Rate	7.8 to 21.8% (10.6%) 3.5 to 7.1 (6.2) 9.5 to 10.5% (9.5%)
Derivative Instruments, net	$	1,318	Sales Comparison Approach	Projected Sales Profit of Underlying Loans	0.3 to 0.6% (0.4%)

The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated:

	December 31, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,351	Sales comparison approach	Adjustment for differences between the comparable sales	-33.3 to 56.4% (-3.0%)
Home equity	$	47	Sales comparison approach	Adjustment for differences between the comparable sales	-7.8 to 22.0% (1.5%)
Multifamily real estate secured	$	5,478	Sales comparison approach, income approach, Discounted cash flows	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	-26.7 to 25.0% (-9.5%)
Commercial real estate secured	$	232	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations	0.0 to 23.6% (11.8%)
Auto and RV secured	$	216	Sales comparison approach	Adjustment for differences between the comparable sales	-31.0 to 25.9% (-6.7%)
Other	$	445	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 4.9 to 6.0% (5.4%)
Other real estate owned and foreclosed assets:
Single family real estate	$	908	Sales comparison approach	Adjustment for differences between the comparable sales	-23.0 to 12.5% (-5.3%)
Autos and RVs	$	53	Sales comparison approach	Adjustment for differences between the comparable sales	-5.9 to 16.1% (4.3%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

	June 30, 2016
(Dollars in thousands)	Fair Value		Valuation Technique(s)	Unobservable Input	Range (Weighted Average) 1
Impaired loans:
Single family real estate secured:
Mortgage	$	28,610	Sales comparison approach	Adjustment for differences between the comparable sales	-40.6 to 69.5% (6.2%)
Home equity	$	33	Sales comparison approach	Adjustment for differences between the comparable sales	-27.2 to 0.0% (-11.1%)
Multifamily real estate secured	$	2,218	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	-29.7 to 58.0% (3.0%)
Commercial real estate secured	$	254	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 66.7% (33.3%)
Auto and RV secured	$	278	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 22.8% (10.6%)
Other	$	676	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate	0.0 to 0.0% (0.0%) 0.0 to 10.0% (5.0%) 100.0 to 100.0% (100.0%) 6.6 to 8.0% (7.3%)
Other real estate owned and foreclosed assets:
Multifamily real estate	$	207	Sales comparison approach and income approach	Adjustment for differences between the comparable sales and adjustments for differences in net operating income expectations, capitalization rate	0.0 to 25.0% (12.5%)
Autos and RVs	$	45	Sales comparison approach	Adjustment for differences between the comparable sales	0.0 to 20.6% (10.2%)
HTM Securities – Non-Agency RMBS	$	79,164	Discounted cash flow	Projected Constant Prepayment Rate, Projected Constant Default Rate, Projected Loss Severity, Discount Rate over LIBOR	2.6 to 48.8% (12.0%) 1.5 to 17.8% (5.7%) 40.0 to 65.9% (56.5%) 2.9 to 8.2% (5.7%)

^{_______________________} 

¹ For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

Changes in Unrealized Gains and Losses and Interest Income Recorded in Earnings for Level 3 Trading Assets and Liabilities

The table below summarizes changes in unrealized gains and losses and interest income recorded in earnings for level 3 trading assets and liabilities that are still held at the periods indicated:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income on investments	$	70	$	60		$	143	$	117
Fair value adjustment	456		(195		)	567		(126		)
Total	$	526	$	(135	)	$	710	$	(9	)

Fair Value Assets Measured on Nonrecurring Basis

The table below summarizes assets measured for impairment on a non-recurring basis:

	December 31, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,351	$	28,351
Home equity	—		—		47		47
Multifamily real estate secured	—		—		5,478		5,478
Commercial real estate secured	—		—		232		232
Auto and RV secured	—		—		216		216
Other	—		—		445		445
Total	$	—	$	—	$	34,769	$	34,769
Other real estate owned and foreclosed assets:
Single family real estate	$	—	$	—	$	908	$	908
Autos and RVs	—		—		53		53
Total	$	—	$	—	$	961	$	961
	June 30, 2016
(Dollars in thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance
Impaired Loans:
Single family real estate secured:
Mortgage	$	—	$	—	$	28,610	$	28,610
Home equity	—		—		33		33
Multifamily real estate secured	—		—		2,218		2,218
Commercial real estate secured	—		—		254		254
Auto and RV secured	—		—		278		278
Other	—		—		676		676
Total	$	—	$	—	$	32,069	$	32,069
Other real estate owned and foreclosed assets:
Multifamily real estate	—		—		207		207
Autos and RVs	—		—		45		45
Total	$	—	$	—	$	252	$	252
HTM Securities – Non-Agency RMBS	$	—	$	—	$	79,164	$	79,164

Aggregate Fair Value, Contractual Balance, and Gains

As of December 31, 2016 and June 30, 2016, the aggregate fair value, contractual balance (including accrued interest), and unrealized gain was as follows:

(Dollars in thousands)	December 31, 2016		June 30, 2016
Aggregate fair value	$	33,990	$	20,871
Contractual balance	33,232		20,226
Unrealized gain	$	758	$	645

The total amount of unrealized gains and losses from changes in fair value included in earnings for the period indicated below for loans held for sale were:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016		2015			2016		2015
Interest income	$	192	$	161		$	329	$	433
Change in fair value	99		(286		)	1,046		(1,292		)
Total	$	291	$	(125	)	$	1,375	$	(859	)

Carrying Amounts and Estimated Fair Values of Financial Instruments at Period-end

The carrying amounts and estimated fair values of financial instruments at December 31, 2016 and June 30, 2016 were as follows:

	December 31, 2016
			Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	707,593	$	707,593	$	—	$	—	$	707,593
Securities trading	8,151		—		—		8,151		8,151
Securities available-for-sale	379,734		—		297,508		82,226		379,734
Loans held for sale, at fair value	33,990		—		33,990		—		33,990
Loans held for sale, at lower of cost or fair value	15,905		—		—		16,610		16,610
Loans and leases held for investment—net	6,811,470		—		—		6,982,624		6,982,624
Accrued interest receivable	21,538		—		—		21,538		21,538
Mortgage servicing rights	6,150		—		—		6,150		6,150
Financial liabilities:
Time deposits and savings	6,610,674		—		6,238,765		—		6,238,765
Securities sold under agreements to repurchase	35,000		—		35,640		—		35,640
Advances from the Federal Home Loan Bank	665,000		—		671,061		—		671,061
Subordinated notes and debentures and other	56,408		—		52,401		—		52,401
Accrued interest payable	1,700		—		1,700		—		1,700

	June 30, 2016
	Fair Value
(Dollars in thousands)	Carrying Amount		Level 1		Level 2		Level 3		Total Fair Value
Financial assets:
Cash and cash equivalents	$	486,727	$	486,727	$	—	$	—	$	486,727
Securities trading	7,584		—		—		7,584		7,584
Securities available-for-sale	265,447		—		256,083		9,364		265,447
Securities held-to-maturity	199,174		—		77,415		125,262		202,677
Loans held for sale, at fair value	20,871		—		20,871		—		20,871
Loans held for sale, at lower of cost or fair value	33,530		—		—		33,530		33,530
Loans and leases held for investment—net	6,354,679		—		—		6,640,918		6,640,918
Accrued interest receivable	26,201		—		—		26,201		26,201
Mortgage servicing rights	3,943		—		—		3,943		3,943
Financial liabilities:
Time deposits and savings	6,044,051		—		5,946,991		—		5,946,991
Securities sold under agreements to repurchase	35,000		—		36,391		—		36,391
Advances from the Federal Home Loan Bank	727,000		—		747,940		—		747,940
Subordinated notes and debentures and other	56,016		—		58,299		—		58,299
Accrued interest payable	1,667		—		1,667		—		1,667

XML

SECURITIES (Tables)

6 Months Ended

Dec. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Marketable Securities

The amortized cost, carrying amount and fair value for the major categories of securities: trading, available-for-sale, and held-to-maturity at December 31, 2016 and June 30, 2016 were:

	December 31, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,422	$	265	$	(423	)	$	33,264	$	—	$	—	$	—		$	—
Non-agency2	—		79,469		5,800		(3,043		)	82,226		—		—		—			—
Total mortgage-backed securities	—		112,891		6,065		(3,466		)	115,490		—		—		—			—
Other debt securities:
Municipal	—		29,907		15		(549		)	29,373		—		—		—			—
Non-agency	8,151		233,048		1,975		(152		)	234,871		—		—		—			—
Total other debt securities	8,151		262,955		1,990		(701		)	264,244		—		—		—			—
Total debt securities	$	8,151	$	375,846	$	8,055	$	(4,167	)	$	379,734	$	—	$	—	$	—		$	—
	June 30, 2016
	Trading		Available-for-sale									Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Unrealized Gains		Unrealized Losses			Fair Value		Carrying Amount		Unrecognized Gains		Unrecognized Losses			Fair Value
Mortgage-backed securities (RMBS):
U.S. agencies1	$	—	$	33,256	$	489	$	(23	)	$	33,722	$	35,067	$	843	$	(1	)	$	35,909
Non-agency2	—		9,043		321		—			9,364		128,211		7,095		(10,044		)	125,262
Total mortgage-backed securities	—		42,299		810		(23		)	43,086		163,278		7,938		(10,045		)	161,171
Other debt securities:
Municipal	—		34,543		185		(10		)	34,718		35,896		5,610		—			41,506
Non-agency	7,584		186,316		1,501		(174		)	187,643		—		—		—			—
Total other debt securities	7,584		220,859		1,686		(184		)	222,361		35,896		5,610		—			41,506
Total debt securities	$	7,584	$	263,158	$	2,496	$	(207	)	$	265,447	$	199,174	$	13,548	$	(10,045	)	$	202,677

__________________________________

^1.  U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

^2.  Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

Schedule of Unrealized Loss on Investments

The securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position were as follows:

	December 31, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	22,228	$	(327	)	$	2,367	$	(96	)	$	24,595	$	(423	)	$	—	$	—		$	—	$	—		$	—	$	—
Non-agency	9,036		(43		)	26,039		(3,000		)	35,075		(3,043		)	—		—			—		—			—		—
Total RMBS securities	31,264		(370		)	28,406		(3,096		)	59,670		(3,466		)	—		—			—		—			—		—
Other Debt:
Municipal Debt	20,204		(531		)	8,317		(18		)	28,521		(549		)	—		—			—		—			—		—
Non-agency	46,342		(132		)	12,368		(20		)	58,710		(152		)	—		—			—		—			—		—
Total Other Debt	66,546		(663		)	20,685		(38		)	87,231		(701		)	—		—			—		—			—		—
Total debt securities	$	97,810	$	(1,033	)	$	49,091	$	(3,134	)	$	146,901	$	(4,167	)	$	—	$	—		$	—	$	—		$	—	$	—
	June 30, 2016
	Available-for-sale securities in loss position for															Held-to-maturity securities in loss position for
	Less Than 12 Months					More Than 12 Months					Total					Less Than 12 Months					More Than 12 Months					Total
(Dollars in thousands)	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
RMBS:
U.S. agencies	$	—	$	—		$	5,094	$	(23	)	$	5,094	$	(23	)	$	129	$	(1	)	$	—	$	—		$	129	$	(1	)
Non-agency	—		—			—		—			—		—			15,011		(419		)	53,372		(9,625		)	68,383		(10,044		)
Total RMBS securities	—		—			5,094		(23		)	5,094		(23		)	15,140		(420		)	53,372		(9,625		)	68,512		(10,045		)
Other Debt:
Municipal Debt	10,267		(10		)	—		—			10,267		(10		)	—		—			—		—			—		—
Non-agency	5,566		(5		)	16,963		(169		)	22,529		(174		)	—		—			—		—			—		—
Total Other Debt	15,833		(15		)	16,963		(169		)	32,796		(184		)	—		—			—		—			—		—
Total debt securities	$	15,833	$	(15	)	$	22,057	$	(192	)	$	37,890	$	(207	)	$	15,140	$	(420	)	$	53,372	$	(9,625	)	$	68,512	$	(10,045	)

Other than Temporary Impairment, Credit Losses Recognized in Earnings

The following table summarizes amounts of credit loss recognized in the income statement through other-than-temporary impairment charges which reduced non-interest income:

	For the Three Months Ended						For the Six Months Ended
	December 31,						December 31,
(Dollars in thousands)	2016			2015			2016			2015
Beginning balance	$	(20,611	)	$	(20,621	)	$	(20,865	)	$	(20,503	)
Additions for the amounts related to credit loss for which an other-than-temporary impairment was not previously recognized	—			—			—			(99		)
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	(1,350		)	(23		)	(1,470		)	(42		)
Credit losses realized for securities sold	5,330			116			5,704			116
Ending balance	$	(16,631	)	$	(20,528	)	$	(16,631	)	$	(20,528	)

Schedule of Realized Gain (Loss)

The gross gains and losses realized through earnings upon the sale of available-for-sale securities for the six months ended December 31, 2016 were as follows:

	For the Three Months Ended					For the Six Months Ended
	December 31,					December 31,
(Dollars in thousands)	2016			2015		2016			2015
Proceeds	$	95,386		$	10,069	$	121,061		$	10,069
Gross realized gains	5,089			933		6,079			933
Gross realized losses	(3,467		)	—		(3,467		)	—
Net realized gain on securities	$	1,622		$	933	$	2,612		$	933

Unrealized Gain (Loss) on Investments

The Company had recorded unrealized gains and unrealized losses in accumulated other comprehensive loss as follows:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Available-for-sale debt securities—net unrealized gains	$	3,889		$	2,288
Available-for-sale debt securities—non-credit related losses	(7,560		)	(138		)
Held-to-maturity debt securities—non-credit related losses	—			(14,129		)
Subtotal	(3,671		)	(11,979		)
Tax (expense) benefit	1,169			4,675
Net unrealized gain (loss) on investment securities in accumulated other comprehensive income (loss)	$	(2,502	)	$	(7,304	)

Investments Classified by Contractual Maturity Date

The expected maturity distribution including repayments of the Company’s mortgage-backed securities and other debt securities classified as trading, available-for-sale and held-to-maturity at December 31, 2016 were:

	December 31, 2016
	Trading		Available for sale				Held-to-maturity
(Dollars in thousands)	Fair Value		Amortized Cost		Fair Value		Carrying Amount		Fair Value
RMBS—U.S. agencies:
Due within one year	$	—	$	1,955	$	1,945	$	—	$	—
Due one to five years	—		6,442		6,426		—		—
Due five to ten years	—		5,730		5,730		—		—
Due after ten years	—		19,295		19,163		—		—
Total RMBS—U.S. agencies	—		33,422		33,264		—		—
RMBS—Non-agency:
Due within one year	—		9,004		9,343		—		—
Due one to five years	—		28,435		29,591		—		—
Due five to ten years	—		22,744		23,441		—		—
Due after ten years	—		19,286		19,851		—		—
Total RMBS—Non-agency	—		79,469		82,226		—		—
Other debt:
Due within one year	—		162,740		163,501		—		—
Due one to five years	55		86,301		87,320		—		—
Due five to ten years	291		59		58		—		—
Due after ten years	7,805		13,855		13,365		—		—
Total other debt	8,151		262,955		264,244		—		—
Total	$	8,151	$	375,846	$	379,734	$	—	$	—

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES (Tables)

6 Months Ended

Dec. 31, 2016

Receivables [Abstract]

Composition of the Loan and Lease Portfolio

The following table sets forth the composition of the loan and lease portfolio as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single family real estate secured:
Mortgage	$	3,719,038		$	3,678,520
Home equity	2,412			2,470
Warehouse and other1	480,378			537,714
Multifamily real estate secured	1,451,535			1,373,216
Commercial real estate secured	155,124			121,746
Auto and RV secured	107,430			73,676
Factoring	134,349			98,275
Commercial & Industrial	763,811			514,300
Other	63,441			2,542
Total gross loans and leases	6,877,518			6,402,459
Allowance for loan and lease losses	(40,928		)	(35,826		)
Unaccreted discounts and loan and lease fees	(25,120		)	(11,954		)
Total net loans and leases	$	6,811,470		$	6,354,679

1. The balance of single family warehouse loans was $179,747 at December 31, 2016 and $173,148 at June 30, 2016. The remainder of the balance is attributable to single family lender finance loans.

Activity in the Allowance for Loan and Lease Losses by Portfolio Class

The following tables summarize activity in the allowance for loan and lease losses by portfolio classes for the periods indicated:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2016	$	19,483		$	22		$	2,554		$	3,922		$	917		$	1,914		$	294	$	8,411	$	79		$	37,596
Provision for loan and lease loss	601			(16		)	(375		)	(9		)	84			123			45		1,353		2,294			4,100
Charge-offs	(841		)	—			—			—			—			(66		)	—		—		(31		)	(938		)
Recoveries	—			16			—			—			—			46			—		—		108			170
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at October 1, 2015	$	16,313		$	94		$	2,057		$	4,180		$	961		$	1,339		$	342	$	5,663	$	129		$	31,078
Provision for loan and lease loss	911			(60		)	586			(887		)	(895		)	532			17		939		2,257			3,400
Charge-offs	(61		)	(1		)	—			—			—			(56		)	—		—		—			(118		)
Recoveries	4			12			—			—			670			25			—		—		—			711
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071
	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2016	$	18,666		$	23		$	2,685		$	3,938		$	882		$	1,615		$	245	$	7,630	$	142		$	35,826
Provision for loan and lease loss	1,400			(21		)	(506		)	(25		)	142			449			94		2,134		2,333			6,000
Charge-offs	(868		)	—			—			—			(23		)	(139		)	—		—		(133		)	(1,163		)
Recoveries	45			20			—			—			—			92			—		—		108			265
Balance at December 31, 2016	$	19,243		$	22		$	2,179		$	3,913		$	1,001		$	2,017		$	339	$	9,764	$	2,450		$	40,928
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage			Home Equity			Warehouse & Other			Multifamily Real Estate Secured			Commercial Real Estate Secured			Auto and RV Secured			Factoring		Commercial & Industrial		Other			Total
Balance at July 1, 2015	$	13,664		$	122		$	1,879		$	4,363		$	1,103		$	953		$	292	$	5,882	$	69		$	28,327
Provision for loan and lease loss	3,418			(96		)	764			(1,070		)	(1,349		)	1,029			67		720		2,317			5,800
Charge-offs	(77		)	(2		)	—			—			—			(206		)	—		—		—			(285		)
Recoveries	162			21			—			—			982			64			—		—		—			1,229
Balance at December 31, 2015	$	17,167		$	45		$	2,643		$	3,293		$	736		$	1,840		$	359	$	6,602	$	2,386		$	35,071

Loans and Leases Evaluated for Impairment by Portfolio Class

The following tables present our loans and leases evaluated individually for impairment by class:

	December 31, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	9,954		$	1,517		$	8,437		$	937		$	9,374		$	—
Purchased	5,221			2,074			3,147			114			3,261			—
Multifamily Real Estate Secured:
Purchased	2,492			1,178			1,314			—			1,314			—
Commercial Real Estate Secured:
Purchased	630			398			232			100			332			—
Auto and RV Secured:
In-house originated	673			498			175			12			187			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,376			—			14,376			1			14,377			574
Purchased	2,391			—			2,391			6			2,397			64
Home Equity:
In-house originated	47			—			47			—			47			1
Multifamily Real Estate Secured:
In-house originated	4,164			—			4,164			133			4,297			19
Auto and RV Secured:
In-house originated	41			—			41			5			46			2
Other	445			—			445			—			445			45
Total	$	40,434		$	5,665		$	34,769		$	1,308		$	36,077		$	705
As a % of total gross loans and leases	0.59		%	0.08		%	0.51		%	0.02		%	0.52		%	0.01		%

	June 30, 2016
(Dollars in thousands)	Unpaid Principal Balance			Principal Balance Adjustment			Unpaid Book Balance			Accrued Interest / Origination Fees			Recorded Investment			Related Allowance
With no related allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	8,989		$	727		$	8,262		$	657		$	8,919		$	—
Purchased	5,852			2,132			3,720			110			3,830			—
Multifamily Real Estate Secured:
Purchased	2,520			1,093			1,427			—			1,427			—
Commercial Real Estate Secured:
Purchased	629			375			254			61			315			—
Auto and RV Secured:
In-house originated	902			663			239			10			249			—
With an allowance recorded:
Single Family Real Estate Secured:
Mortgage:
In-house originated	14,696			—			14,696			65			14,761			575
Purchased	1,932			—			1,932			5			1,937			46
Home Equity:
In-house originated	33			—			33			—			33			1
Multifamily Real Estate Secured:
In-house originated	791			—			791			65			856			1
Auto and RV Secured:
In-house originated	39			—			39			4			43			2
Other	676						676			—			676			67
Total	$	37,059		$	4,990		$	32,069		$	977		$	33,046		$	692
As a % of total gross loans and leases	0.58		%	0.08		%	0.50		%	0.02		%	0.52		%	0.01		%

Balance in the Allowance for Loan and Lease Losses and Recorded Investments by Portfolio Segment

The following tables present the balance in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment and based on impairment evaluation method:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	638	$	1	$	—		$	19	$	—	$	2	$	—		$	—	$	45		$	705
Collectively evaluated for impairment	18,605		21		2,179			3,894		1,001		2,015		339			9,764		2,405			40,223
Total ending allowance balance	$	19,243	$	22	$	2,179		$	3,913	$	1,001	$	2,017	$	339		$	9,764	$	2,450		$	40,928
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,351	$	47	$	—		$	5,478	$	232	$	216	$	—		$	—	$	445		$	34,769
Loans and leases collectively evaluated for impairment	3,690,687		2,365		480,378			1,446,057		154,892		107,214		134,349			763,811		62,996			6,842,749
Principal loan and lease balance	3,719,038		2,412		480,378			1,451,535		155,124		107,430		134,349			763,811		63,441			6,877,518
Unaccreted discounts and loan and lease fees	11,693		29		(2,173		)	4,496		812		1,396		(40,115		)	810		(2,068		)	(25,120		)
Accrued interest receivable	8,336		2		1,842			4,541		400		225		219			3,008		533			19,106
Total recorded investment in loans and leases	$	3,739,067	$	2,443	$	480,047		$	1,460,572	$	156,336	$	109,051	$	94,453		$	767,629	$	61,906		$	6,871,504

________________

^1. Loans and leases evaluated for impairment include Troubled Debt Restructurings (“TDRs”) that have been performing for more than six months.

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse and other			Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring			Commercial & Industrial		Other			Total
Allowance for loan and lease losses:
Ending allowance balance attributable to loans and leases:
Individually evaluated for impairment	$	621	$	1	$	—		$	1	$	—	$	2	$	—		$	—	$	67		$	692
Collectively evaluated for impairment	18,045		22		2,685			3,937		882		1,613		245			7,630		75			35,134
Total ending allowance balance	$	18,666	$	23	$	2,685		$	3,938	$	882	$	1,615	$	245		$	7,630	$	142		$	35,826
Loans and leases:
Loans and leases individually evaluated for impairment1	$	28,610	$	33	$	—		$	2,218	$	254	$	278	$	—		$	—	$	676		$	32,069
Loans and leases collectively evaluated for impairment	3,649,910		2,437		537,714			1,370,998		121,492		73,398		98,275			514,300		1,866			6,370,390
Principal loan and lease balance	3,678,520		2,470		537,714			1,373,216		121,746		73,676		98,275			514,300		2,542			6,402,459
Unaccreted discounts and loan and lease fees	13,142		24		(2,200		)	3,957		542		975		(30,533		)	2,172		(33		)	(11,954		)
Accrued interest receivable	12,460		2		1,870			5,409		389		169		327			2,202		3			22,831
Total recorded investment in loans and leases	$	3,704,122	$	2,496	$	537,384		$	1,382,582	$	122,677	$	74,820	$	68,069		$	518,674	$	2,512		$	6,413,336

________________

^1.Loans and leases evaluated for impairment include TDRs that have been performing for more than six months.

Non-performing Loans and Leases

Non-performing loans and leases consisted of the following as of the dates indicated:

(Dollars in thousands)	December 31, 2016			June 30, 2016
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	22,814		$	22,958
Purchased	5,331			5,442
Home Equity:
In-house originated	47			33
Multifamily Real Estate Secured:
In-house originated	4,164			791
Purchased	1,314			1,427
Commercial Real Estate Secured:
Purchased	232			254
Total non-performing loans secured by real estate	33,902			30,905
Auto and RV Secured	216			278
Other	445			676
Total non-performing loans and leases	$	34,563		$	31,859
Non-performing loans and leases to total loans and leases	0.50		%	0.50		%

Loans and Leases, Performing and Non-performing

The following tables present the outstanding unpaid balance of loans and leases that are performing and non-performing by portfolio class:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,690,893	$	2,365	$	480,378	$	1,446,057	$	154,892	$	107,214	$	134,349	$	763,811	$	62,996	$	6,842,955
Non-performing	28,145		47		—		5,478		232		216		—		—		445		34,563
Total	$	3,719,038	$	2,412	$	480,378	$	1,451,535	$	155,124	$	107,430	$	134,349	$	763,811	$	63,441	$	6,877,518

	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing	$	3,650,120	$	2,437	$	537,714	$	1,370,998	$	121,492	$	73,398	$	98,275	$	514,300	$	1,866	$	6,370,600
Non-performing	28,400		33		—		2,218		254		278		—		—		676		31,859
Total	$	3,678,520	$	2,470	$	537,714	$	1,373,216	$	121,746	$	73,676	$	98,275	$	514,300	$	2,542	$	6,402,459

The Company divides loan balances when determining general loan loss reserves between purchases and originations as follows:

	December 31, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,629,359	$	61,534	$	3,690,893	$	1,356,627	$	89,430	$	1,446,057	$	142,911	$	11,981	$	154,892
Non-performing	22,814		5,331		28,145		4,164		1,314		5,478		—		232		232
Total	$	3,652,173	$	66,865	$	3,719,038	$	1,360,791	$	90,744	$	1,451,535	$	142,911	$	12,213	$	155,124

	June 30, 2016
	Single Family Real Estate Secured: Mortgage						Multifamily Real Estate Secured						Commercial Real Estate Secured
(Dollars in thousands)	Origination		Purchase		Total		Origination		Purchase		Total		Origination		Purchase		Total
Performing	$	3,578,629	$	71,491	$	3,650,120	$	1,270,379	$	100,619	$	1,370,998	$	109,370	$	12,122	$	121,492
Non-performing	22,958		5,442		28,400		791		1,427		2,218		—		254		254
Total	$	3,601,587	$	76,933	$	3,678,520	$	1,271,170	$	102,046	$	1,373,216	$	109,370	$	12,376	$	121,746

Interest Recognized on Performing Loans Temporarily Modified as TDR

The Company classifies these loans as performing loans temporarily modified as TDR and are included in impaired loans and leases as follows:

	December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	206	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	206
Non-performing loans and leases	28,145		47		—		5,478		232		216		—		—		445		34,563
Total impaired loans and leases	$	28,351	$	47	$	—	$	5,478	$	232	$	216	$	—	$	—	$	445	$	34,769
	June 30, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Performing loans temporarily modified as TDR	$	210	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	210
Non-performing loans and leases	28,400		33		—		2,218		254		278		—		—		676		31,859
Total impaired loans and leases	$	28,610	$	33	$	—	$	2,218	$	254	$	278	$	—	$	—	$	676	$	32,069

The Company recognizes interest on performing loans temporarily modified as TDR, which is shown in conjunction with average balances as follows:

	For the Three Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	3	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3
Average balances of performing TDRs	$	207	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	207
Average balances of impaired loans	$	31,855	$	40	$	—	$	5,606	$	232	$	262	$	—	$	—	$	510	$	38,505
	For the Three Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	2	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	2
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,195	$	8	$	—	$	5,064	$	1,045	$	321	$	—	$	—	$	—	$	28,633

	For the Six Months Ended December 31, 2016
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	6	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	6
Average balances of performing TDRs	$	208	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	208
Average balances of impaired loans	$	30,773	$	37	$	—	$	4,476	$	239	$	267	$	—	$	—	$	565	$	36,357
	For the Six Months Ended December 31, 2015
	Single Family Real Estate Secured
(Dollars in thousands)	Mortgage		Home Equity		Warehouse & other		Multifamily Real Estate Secured		Commercial Real Estate Secured		Auto and RV Secured		Factoring		Commercial & Industrial		Other		Total
Interest income recognized on performing TDRs	$	4	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	4
Average balances of performing TDRs	$	215	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	215
Average balances of impaired loans	$	22,483	$	8	$	—	$	5,176	$	1,406	$	365	$	—	$	—	$	—	$	29,438

Compositon of Loan and Lease Portfolio by Credit Quality Indicators

The following table presents the composition of the Company’s loan and lease portfolio by credit quality indicators:

	December 31, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,610,703		$	18,656		$	22,814		$	—		$	3,652,173
Purchased	60,879			353			5,633			—			66,865
Home Equity:
In-house originated	2,363			—			49			—			2,412
Warehouse and other:
In-house originated	479,383			—			995			—			480,378
Multifamily Real Estate Secured:
In-house originated	1,353,379			3,248			4,164			—			1,360,791
Purchased	88,392			—			2,352			—			90,744
Commercial Real Estate Secured:
In-house originated	142,911			—			—			—			142,911
Purchased	9,992			1,989			232			—			12,213
Auto and RV Secured:
In-house originated	107,077			100			253			—			107,430
Factoring	134,349			—			—			—			134,349
Commercial & Industrial	763,537			274			—			—			763,811
Other	62,996			—			445			—			63,441
Total	$	6,815,961		$	24,620		$	36,937		$	—		$	6,877,518
As a % of total gross loans and leases	99.1		%	0.4		%	0.5		%	—		%	100.0		%
	June 30, 2016
(Dollars in thousands)	Pass			Special Mention			Substandard			Doubtful			Total
Single Family Real Estate Secured:
Mortgage:
In-house originated	$	3,563,430		$	10,938		$	27,219		$	—		$	3,601,587
Purchased	71,111			—			5,822			—			76,933
Home Equity:
In-house originated	2,420			17			33			—			2,470
Warehouse and other:
In-house originated	534,868			2,846			—			—			537,714
Multifamily Real Estate Secured:
In-house originated	1,262,384			4,721			4,065			—			1,271,170
Purchased	96,792			2,769			2,485			—			102,046
Commercial Real Estate Secured:
In-house originated	109,370			—			—			—			109,370
Purchased	10,110			2,012			254			—			12,376
Auto and RV Secured:
In-house originated	73,192			97			387			—			73,676
Factoring	98,275			—			—			—			98,275
Commercial & Industrial	513,310			—			990			—			514,300
Other	1,715			151			676			—			2,542
Total	$	6,336,977		$	23,551		$	41,931		$	—		$	6,402,459
As a % of total gross loans and leases	99.0		%	0.4		%	0.6		%	—		%	100.0		%

Past Due Loan and Leases

The following table provides the outstanding unpaid balance of loans and leases that are past due 30 days or more by portfolio class as of the period indicated:

	December 31, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage:
In-house originated	$	4,523		$	5,356		$	22,787		$	32,666
Purchased	804			165			2,701			3,670
Home equity:
In-house originated	—			—			45			45
Multifamily real estate secured:
In-house originated	576			—			4,164			4,740
Commercial real estate secured:
Purchased	—			—			232			232
Auto and RV secured	477			139			82			698
Other	—			—			445			445
Total	$	6,380		$	5,660		$	30,456		$	42,496
As a % of total gross loans and leases	0.10		%	0.08		%	0.44		%	0.62		%
	June 30, 2016
(Dollars in thousands)	30-59 Days Past Due			60-89 Days Past Due			90+ Days Past Due			Total
Single family real estate secured:
Mortgage
In-house originated	$	5,192		$	1,866		$	21,722		$	28,780
Purchased	572			—			2,538			3,110
Home equity
In-house originated	—			17			29			46
Multifamily real estate secured
In-house originated	3,594			—			791			4,385
Commercial real estate secured
Purchased	—			—			254			254
Auto and RV secured
In-house originated	200			136			104			440
Commercial and industrial	142			—			—			142
Other	62			151			676			889
Total	$	9,762		$	2,170		$	26,114		$	38,046
As a % of total gross loans and leases	0.15		%	0.03		%	0.41		%	0.59		%

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EQUITY AND STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Dec. 31, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Unrecognized compensation expense related to non-vested awards, to be recognized in the future

At December 31, 2016, unrecognized compensation expense related to non-vested awards aggregated to $29,216 and is expected to be recognized in future periods as follows:

(Dollars in thousands)	Stock Award Compensation Expense
For the fiscal year remainder:
2017	$	7,291
2018	11,905
2019	7,692
2020	2,328
Total	$	29,216

Status and changes in restricted stock grants

The following table presents the status and changes in restricted stock unit grants for the periods indicated:

	Restricted Stock Unit Shares		Weighted-Average Grant-Date Fair Value
Non-vested balance at June 30, 2015	1,135,088		$	17.01
Granted	615,834		26.60
Vested	(536,528	)	16.14
Canceled	(154,668	)	18.70
Non-vested balance at June 30, 2016	1,059,726		$	22.53
Granted	804,518		20.80
Vested	(247,875	)	20.29
Canceled	(45,566	)	19.11
Non-vested balance at December 31, 2016	1,570,803		$	22.1

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EARNINGS PER SHARE ("EPS") (Tables)

6 Months Ended

Dec. 31, 2016

Earnings Per Share [Abstract]

Calculation of basic and diluted EPS

The following table presents the calculation of basic and diluted EPS:

	Three Months Ended						Six Months Ended
	December 31,						December 31,
(Dollars in thousands, except per share data)	2016			2015			2016			2015
Earnings Per Common Share
Net income	$	32,300		$	28,149		$	61,197		$	53,650
Preferred stock dividends	(78		)	(78		)	(155		)	(155		)
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	63,341,437			62,999,335			63,312,805			62,741,596
Average unvested RSU shares	1,520,103			1,431,998			1,412,167			1,309,243
Total qualifying shares	64,861,540			64,431,333			64,724,972			64,050,839
Earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84
Diluted Earnings Per Common Share
Net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Dilutive net income attributable to common shareholders	$	32,222		$	28,071		$	61,042		$	53,495
Average common shares issued and outstanding	64,861,540			64,431,333			64,724,972			64,050,839
Dilutive effect of stock options	—			1,323			—			10,982
Total dilutive common shares issued and outstanding	64,861,540			64,432,656			64,724,972			64,061,821
Diluted earnings per common share	$	0.50		$	0.44		$	0.94		$	0.84

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SIGNIFICANT ACCOUNTING POLICIES (Details) - H&R Block Bank Deposits	6 Months Ended
	Dec. 31, 2016
Emerald Advance
Business Acquisition [Line Items]
Interest income and fees retainer (as a percent)	10.00%
Refund Advance Loan
Business Acquisition [Line Items]
Average life of the loan product	10 days

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FAIR VALUE - NARRATIVE (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2016 USD ($) security	Nov. 30, 2016	Oct. 31, 2009
Collateralized Debt Obligations
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Number of collateralized debt securities in trading portfolio | security	2
Collateralized Debt Obligations | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Probability of actual and forecasted defaults	17.90%
Percentage of actual defaults	16.10%
Description of variable rate basis	U.S. Treasury
Collateralized Debt Obligations | Significant Unobservable Inputs (Level 3) | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Percent increase in discount rate	1.00%
Effect on net income before tax from one percentage point increase in discount rate	$ 803
Percent decrease in discount rate	1.00%
Effect on net income before tax from one percentage point decrease in discount rate	$ 921
Collateralized Debt Obligations | Significant Unobservable Inputs (Level 3) | Weighted Average | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Discount rate, basis spread	4.75%
Non-agency RMBS | Minimum | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Discount rate, basis spread	2.39%
Non-agency RMBS | Maximum | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Discount rate, basis spread	6.68%
Non-agency RMBS | Significant Unobservable Inputs (Level 3)
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Unemployment rate		4.60%	10.00%
Non-agency RMBS | Significant Unobservable Inputs (Level 3) | Minimum | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Probability of actual and forecasted defaults	1.50%
Projected Loss Severity	40.00%
Non-agency RMBS | Significant Unobservable Inputs (Level 3) | Maximum | Discounted cash flow
Fair Value Inputs, Equity, Quantitative Information [Line Items]
Probability of actual and forecasted defaults	13.70%
Projected Loss Severity	68.80%

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FAIR VALUE - ASSETS AND LIABILITIES MEASURED ON RECURRING BASIS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	$ 8,151	$ 7,584
Securities available-for-sale	379,734	265,447
Loans held for sale, at fair value	33,990	20,871
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	0	0
Securities available-for-sale	0	0
Loans held for sale, at fair value	0	0
Mortgage Servicing Rights	0	0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	0	0
Securities available-for-sale	297,508	256,083
Loans held for sale, at fair value	33,990	20,871
Mortgage Servicing Rights	0	0
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	8,151	7,584
Securities available-for-sale	82,226	9,364
Loans held for sale, at fair value	0	0
Mortgage Servicing Rights	6,150	3,943
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	379,734	265,447
Loans held for sale, at fair value	33,990	20,871
Mortgage Servicing Rights	6,150	3,943
Other assets - Derivative instruments	2,340	2,202
Other liabilities - Derivative instruments	89	884
Recurring | Collateralized Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	8,151	7,584
Recurring | U.S. agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	33,264	33,722
Recurring | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	82,226	9,364
Recurring | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	29,373	34,719
Recurring | Other Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	234,871	187,642
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Loans held for sale, at fair value	0	0
Mortgage Servicing Rights	0	0
Other assets - Derivative instruments	0	0
Other liabilities - Derivative instruments	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Collateralized Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	297,508	256,083
Loans held for sale, at fair value	33,990	20,871
Mortgage Servicing Rights	0	0
Other assets - Derivative instruments	0	0
Other liabilities - Derivative instruments	0	0
Recurring | Significant Other Observable Inputs (Level 2) | Collateralized Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	0	0
Recurring | Significant Other Observable Inputs (Level 2) | U.S. agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	33,264	33,722
Recurring | Significant Other Observable Inputs (Level 2) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Significant Other Observable Inputs (Level 2) | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	29,373	34,719
Recurring | Significant Other Observable Inputs (Level 2) | Other Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	234,871	187,642
Recurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	82,226	9,364
Loans held for sale, at fair value	0	0
Mortgage Servicing Rights	6,150	3,943
Other assets - Derivative instruments	2,340	2,202
Other liabilities - Derivative instruments	89	884
Recurring | Significant Unobservable Inputs (Level 3) | Collateralized Debt Obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Trading	8,151	7,584
Recurring | Significant Unobservable Inputs (Level 3) | U.S. agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	82,226	9,364
Recurring | Significant Unobservable Inputs (Level 3) | Municipal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	0	0
Recurring | Significant Unobservable Inputs (Level 3) | Other Debt Securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities available-for-sale	$ 0	$ 0

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FAIR VALUE - LEVEL 3 ASSETS MEASURED ON RECURRING BASIS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Other-than-temporary impairment	$ (1,350)	$ (23)	$ (1,470)	$ (141)
Recurring | Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	147,905	36,600	22,209	38,824
Transfers into Level 3	0	0	124,547	0
Transfers out of Level 3	0	0	0	0
Total gains or losses for the period - Included in earnings	650	108	1,297	(1,281)
Total gains or losses for the period - Included in other comprehensive income	1,780	(715)	9,314	(961)
Purchases/originations	710	693	1,843	1,428
Issues	0	0	0	0
Sales	(44,210)	(2,089)	(50,609)	(2,089)
Settlements	(4,594)	(369)	(7,052)	(1,728)
Other-than-temporary impairment	(1,350)	(4)	(1,470)	(39)
Closing balance	98,778	33,348	98,778	33,348
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	(1,463)	(768)	(4)	(2,087)
Recurring | Level 3 | Collateralized Debt Obligations
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	7,695	7,902	7,584	7,832
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Total gains or losses for the period - Included in earnings	456	(196)	567	(126)
Total gains or losses for the period - Included in other comprehensive income	0	0	0	0
Purchases/originations	0	0	0	0
Issues	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Other-than-temporary impairment	0	0	0	0
Closing balance	8,151	7,706	8,151	7,706
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	456	(196)	567	(126)
Recurring | Level 3 | Non-agency RMBS
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	133,169	24,993	9,364	26,633
Transfers into Level 3	0	0	124,547	0
Transfers out of Level 3	0	0	0	0
Total gains or losses for the period - Included in earnings	(2,569)	(680)	(1,868)	(680)
Total gains or losses for the period - Included in other comprehensive income	1,780	(715)	9,314	(961)
Purchases/originations	0	0	0	0
Issues	0	0	0	0
Sales	(44,210)	(2,089)	(50,609)	(2,089)
Settlements	(4,594)	(369)	(7,052)	(1,728)
Other-than-temporary impairment	(1,350)	(4)	(1,470)	(39)
Closing balance	82,226	21,136	82,226	21,136
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	(2,569)	(680)	(1,868)	(680)
Recurring | Level 3 | Mortgage Servicing Rights
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	4,855	2,687	3,943	2,098
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Total gains or losses for the period - Included in earnings	585	95	364	(51)
Purchases/originations	710	693	1,843	1,428
Issues	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Other-than-temporary impairment	0	0	0	0
Closing balance	6,150	3,475	6,150	3,475
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	585	95	364	(51)
Recurring | Level 3 | Derivative Instruments, net
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Opening balance	2,186	1,018	1,318	2,261
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Total gains or losses for the period - Included in earnings	65	13	933	(1,230)
Purchases/originations	0	0	0	0
Issues	0	0	0	0
Sales	0	0	0	0
Settlements	0	0	0	0
Other-than-temporary impairment	0	0	0	0
Closing balance	2,251	1,031	2,251	1,031
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period	$ 65	$ 13	$ 933	$ (1,230)

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FAIR VALUE - QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASURMENTS (RECURRING) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities trading	$ 8,151	$ 7,584
Securities available-for-sale	$ 379,734	265,447
Collateralized Debt Obligations | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	17.90%
Level 3
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities trading	$ 8,151	7,584
Securities available-for-sale	82,226	9,364
Mortgage Servicing Rights	$ 6,150	3,943
Level 3 | Non-agency RMBS | Minimum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	1.50%
Projected Loss Severity	40.00%
Level 3 | Non-agency RMBS | Maximum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	13.70%
Projected Loss Severity	68.80%
Recurring
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available-for-sale	$ 379,734	265,447
Mortgage Servicing Rights	6,150	3,943
Recurring | Collateralized Debt Obligations
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities trading	8,151	7,584
Recurring | Non-agency RMBS
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available-for-sale	82,226	9,364
Recurring | Level 3
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available-for-sale	82,226	9,364
Mortgage Servicing Rights	6,150	3,943
Recurring | Level 3 | Collateralized Debt Obligations
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities trading	8,151	7,584
Recurring | Level 3 | Collateralized Debt Obligations | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities trading	$ 8,151	$ 7,584
Recurring | Level 3 | Collateralized Debt Obligations | Minimum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	13.70%	11.70%
Discount Rate	4.75%	5.00%
Recurring | Level 3 | Collateralized Debt Obligations | Maximum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	22.00%	21.00%
Discount Rate	4.75%	5.00%
Recurring | Level 3 | Collateralized Debt Obligations | Weighted Average | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Total Projected Defaults	17.80%	16.50%
Discount Rate	4.75%	5.00%
Recurring | Level 3 | Non-agency RMBS
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available-for-sale	$ 82,226	$ 9,364
Recurring | Level 3 | Non-agency RMBS | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Securities available-for-sale	$ 82,226	$ 9,364
Recurring | Level 3 | Non-agency RMBS | Minimum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	2.39%	2.50%
Projected Constant Prepayment Rate	2.50%	9.10%
Projected Constant Default Rate	1.50%	1.50%
Projected Loss Severity	40.00%	40.00%
Recurring | Level 3 | Non-agency RMBS | Maximum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	6.68%	2.90%
Projected Constant Prepayment Rate	25.30%	20.60%
Projected Constant Default Rate	13.70%	13.60%
Projected Loss Severity	68.80%	68.80%
Recurring | Level 3 | Non-agency RMBS | Weighted Average | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	3.61%	2.80%
Projected Constant Prepayment Rate	10.00%	14.20%
Projected Constant Default Rate	4.30%	6.10%
Projected Loss Severity	57.40%	51.50%
Recurring | Level 3 | Mortgage Servicing Rights | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Mortgage Servicing Rights	$ 6,150	$ 3,943
Recurring | Level 3 | Mortgage Servicing Rights | Minimum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	9.50%	9.50%
Projected Constant Prepayment Rate	6.60%	7.80%
Life (in years)	2 years 10 months 24 days	3 years 6 months
Recurring | Level 3 | Mortgage Servicing Rights | Maximum | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	13.00%	10.50%
Projected Constant Prepayment Rate	21.70%	21.80%
Life (in years)	8 years 6 months	7 years 1 month 6 days
Recurring | Level 3 | Mortgage Servicing Rights | Weighted Average | Discounted cash flow
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount Rate	9.70%	9.50%
Projected Constant Prepayment Rate	9.00%	10.60%
Life (in years)	6 years 10 months 24 days	6 years 2 months 12 days
Recurring | Level 3 | Derivative Instruments, net | Sales comparison approach
Fair Value, Option, Quantitative Disclosures [Line Items]
Derivative Instruments, net	$ 2,251	$ 1,318
Recurring | Level 3 | Derivative Instruments, net | Minimum | Sales comparison approach
Fair Value, Option, Quantitative Disclosures [Line Items]
Projected Sales Profit of Underlying Loans	0.20%	0.30%
Recurring | Level 3 | Derivative Instruments, net | Maximum | Sales comparison approach
Fair Value, Option, Quantitative Disclosures [Line Items]
Projected Sales Profit of Underlying Loans	0.70%	0.60%
Recurring | Level 3 | Derivative Instruments, net | Weighted Average | Sales comparison approach
Fair Value, Option, Quantitative Disclosures [Line Items]
Projected Sales Profit of Underlying Loans	0.50%	0.40%

XML

FAIR VALUE - LEVEL 3 UNREALIZED GAIN (LOSS) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value adjustment	$ 456	$ (196)	$ 567	$ (126)
Level 3
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Interest income on investments	70	60	143	117
Fair value adjustment	456	(195)	567	(126)
Total	$ 526	$ (135)	$ 710	$ (9)

XML

FAIR VALUE - ASSETS MEASURED NONRECURRING BASIS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value	$ 0	$ 202,677
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		0
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		77,415
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		125,262
Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	34,769	32,069
Other real estate owned and foreclosed assets, fair value	961	252
Nonrecurring | Single family real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	908
Nonrecurring | Multifamily real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value		207
Nonrecurring | Autos and RVs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	53	45
Nonrecurring | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		79,164
Nonrecurring | Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	28,351	28,610
Nonrecurring | Home equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	47	33
Nonrecurring | Multi-family real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	5,478	2,218
Nonrecurring | Commercial real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	232	254
Nonrecurring | Auto and RV secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	216	278
Nonrecurring | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	445	676
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Other real estate owned and foreclosed assets, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Single family real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Multifamily real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value		0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Autos and RVs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Home equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Multi-family real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Commercial real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Auto and RV secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Other real estate owned and foreclosed assets, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Single family real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Multifamily real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value		0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Autos and RVs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value		0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Home equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Multi-family real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Commercial real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Auto and RV secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Other Observable Inputs (Level 2) | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	0	0
Nonrecurring | Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	34,769	32,069
Other real estate owned and foreclosed assets, fair value	961	252
Nonrecurring | Significant Unobservable Inputs (Level 3) | Single family real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	908
Nonrecurring | Significant Unobservable Inputs (Level 3) | Multifamily real estate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value		207
Nonrecurring | Significant Unobservable Inputs (Level 3) | Autos and RVs
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other real estate owned and foreclosed assets, fair value	53	45
Nonrecurring | Significant Unobservable Inputs (Level 3) | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Held to maturity - Fair Value	0	79,164
Nonrecurring | Significant Unobservable Inputs (Level 3) | Mortgage
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	28,351	28,610
Nonrecurring | Significant Unobservable Inputs (Level 3) | Home equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	47	33
Nonrecurring | Significant Unobservable Inputs (Level 3) | Multi-family real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	5,478	2,218
Nonrecurring | Significant Unobservable Inputs (Level 3) | Commercial real estate secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	232	254
Nonrecurring | Significant Unobservable Inputs (Level 3) | Auto and RV secured
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	216	278
Nonrecurring | Significant Unobservable Inputs (Level 3) | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	$ 445	$ 676

XML

FAIR VALUE - ASSETS MEASURED ON NONRECURRING BASIS NARRATIVE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Related Allowance	$ 705		$ 705		$ 692
Securities held-to-maturity	0		0		202,677
Held-to-maturity securities, impairment charged to other comprehensive income	6,368	$ 1,014	7,529	$ 1,638
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held-to-maturity					125,262
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held-to-maturity					199,174
Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	34,769		34,769		32,069
Related Allowance	705		705
Other real estate owned and foreclosed assets, fair value	961		961		252
Held-to-maturity securities, impairment charged to other comprehensive income			0
Nonrecurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, fair value	34,769		34,769		32,069
Other real estate owned and foreclosed assets, fair value	961		961		252
Nonrecurring | Nonperforming
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, write-off			903
Impaired loans, additional provision for loan losses			5,665
Nonrecurring | Other real estate owned
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans, write-off	323
Nonrecurring | Non-agency RMBS
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held-to-maturity					79,164
Held-to-maturity securities, impairment charged to income			0	102
Held-to-maturity securities, impairment charged to other comprehensive income				$ 3,496
Nonrecurring | Non-agency RMBS | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held-to-maturity	0		0		$ 79,164
Nonrecurring | Non-agency RMBS | Carrying Amount | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Securities held-to-maturity	$ 0		$ 0

XML

FAIR VALUE - LOANS HELD-FOR-SALE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Aggregate fair value	$ 33,990		$ 33,990		$ 20,871
Contractual balance	33,232		33,232		20,226
Unrealized gain	758		758		$ 645
Interest income	192	$ 161	329	$ 433
Change in fair value	99	(286)	1,046	(1,292)
Total Change in fair value	$ 291	$ (125)	$ 1,375	$ (859)

XML

FAIR VALUE - QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASURMENTS (NONRECURRING) (Details) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Dec. 31, 2016	Jun. 30, 2016
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Held to maturity - Fair Value		$ 0	$ 202,677
Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Held to maturity - Fair Value			125,262
Level 3 | Non-agency RMBS | Minimum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Loss Severity		40.00%
Level 3 | Non-agency RMBS | Maximum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Loss Severity		68.80%
Nonrecurring
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 34,769	32,069
Other real estate owned and foreclosed assets, fair value		961	252
Nonrecurring | Single family real estate
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		908
Nonrecurring | Multifamily real estate
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value			207
Nonrecurring | Autos and RVs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		53	45
Nonrecurring | Non-agency RMBS
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Held to maturity - Fair Value			79,164
Nonrecurring | Mortgage
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		28,351	28,610
Nonrecurring | Home equity
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		47	33
Nonrecurring | Multi-family real estate secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		5,478	2,218
Nonrecurring | Commercial real estate secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		232	254
Nonrecurring | Auto and RV secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		216	278
Nonrecurring | Other
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		445	676
Nonrecurring | Level 3
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		34,769	32,069
Other real estate owned and foreclosed assets, fair value		961	252
Nonrecurring | Level 3 | Single family real estate
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		908
Nonrecurring | Level 3 | Single family real estate | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		$ 908
Nonrecurring | Level 3 | Single family real estate | Minimum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(23.00%)
Nonrecurring | Level 3 | Single family real estate | Maximum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	12.50%
Nonrecurring | Level 3 | Single family real estate | Weighted Average | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(5.30%)
Nonrecurring | Level 3 | Multifamily real estate
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value			207
Nonrecurring | Level 3 | Multifamily real estate | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value			$ 207
Nonrecurring | Level 3 | Multifamily real estate | Minimum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		0.00%
Nonrecurring | Level 3 | Multifamily real estate | Maximum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		25.00%
Nonrecurring | Level 3 | Multifamily real estate | Weighted Average | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		12.50%
Nonrecurring | Level 3 | Autos and RVs
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		$ 53	$ 45
Nonrecurring | Level 3 | Autos and RVs | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Other real estate owned and foreclosed assets, fair value		$ 53	$ 45
Nonrecurring | Level 3 | Autos and RVs | Minimum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(5.90%)	0.00%
Nonrecurring | Level 3 | Autos and RVs | Maximum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	16.10%	20.60%
Nonrecurring | Level 3 | Autos and RVs | Weighted Average | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	4.30%	10.20%
Nonrecurring | Level 3 | Non-agency RMBS
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Held to maturity - Fair Value		$ 0	$ 79,164
Nonrecurring | Level 3 | Non-agency RMBS | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Held to maturity - Fair Value			$ 79,164
Nonrecurring | Level 3 | Non-agency RMBS | Minimum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]		2.60%
Projected Constant Default Rate	[1]		1.50%
Projected Loss Severity	[1]		40.00%
Discount Rate	[1]		2.90%
Nonrecurring | Level 3 | Non-agency RMBS | Maximum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]		48.80%
Projected Constant Default Rate	[1]		17.80%
Projected Loss Severity	[1]		65.90%
Discount Rate	[1]		8.20%
Nonrecurring | Level 3 | Non-agency RMBS | Weighted Average | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]		12.00%
Projected Constant Default Rate	[1]		5.70%
Projected Loss Severity	[1]		56.50%
Discount Rate	[1]		5.70%
Nonrecurring | Level 3 | Mortgage
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		28,351	$ 28,610
Nonrecurring | Level 3 | Mortgage | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 28,351	$ 28,610
Nonrecurring | Level 3 | Mortgage | Minimum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(33.30%)	(40.60%)
Nonrecurring | Level 3 | Mortgage | Maximum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	56.40%	69.50%
Nonrecurring | Level 3 | Mortgage | Weighted Average | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(3.00%)	6.20%
Nonrecurring | Level 3 | Home equity
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 47	$ 33
Nonrecurring | Level 3 | Home equity | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 47	$ 33
Nonrecurring | Level 3 | Home equity | Minimum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(7.80%)	(27.20%)
Nonrecurring | Level 3 | Home equity | Maximum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	22.00%	0.00%
Nonrecurring | Level 3 | Home equity | Weighted Average | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	1.50%	(11.10%)
Nonrecurring | Level 3 | Multi-family real estate secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 5,478	$ 2,218
Nonrecurring | Level 3 | Multi-family real estate secured | Sales comparison approach, income approach and discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 5,478
Nonrecurring | Level 3 | Multi-family real estate secured | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value			$ 2,218
Nonrecurring | Level 3 | Multi-family real estate secured | Minimum | Sales comparison approach, income approach and discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(26.70%)
Nonrecurring | Level 3 | Multi-family real estate secured | Minimum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		(29.70%)
Nonrecurring | Level 3 | Multi-family real estate secured | Maximum | Sales comparison approach, income approach and discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	25.00%
Nonrecurring | Level 3 | Multi-family real estate secured | Maximum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		58.00%
Nonrecurring | Level 3 | Multi-family real estate secured | Weighted Average | Sales comparison approach, income approach and discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(9.50%)
Nonrecurring | Level 3 | Multi-family real estate secured | Weighted Average | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]		3.00%
Nonrecurring | Level 3 | Commercial real estate secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 232	$ 254
Nonrecurring | Level 3 | Commercial real estate secured | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 232	$ 254
Nonrecurring | Level 3 | Commercial real estate secured | Minimum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	0.00%	0.00%
Nonrecurring | Level 3 | Commercial real estate secured | Maximum | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	23.60%	66.70%
Nonrecurring | Level 3 | Commercial real estate secured | Weighted Average | Sales comparison and income approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	11.80%	33.30%
Nonrecurring | Level 3 | Auto and RV secured
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 216	$ 278
Nonrecurring | Level 3 | Auto and RV secured | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 216	$ 278
Nonrecurring | Level 3 | Auto and RV secured | Minimum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(31.00%)	0.00%
Nonrecurring | Level 3 | Auto and RV secured | Maximum | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	25.90%	22.80%
Nonrecurring | Level 3 | Auto and RV secured | Weighted Average | Sales comparison approach
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Unobservable Input, Comparability Adjustments	[1]	(6.70%)	10.60%
Nonrecurring | Level 3 | Other
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 445	$ 676
Nonrecurring | Level 3 | Other | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Impaired loans, fair value		$ 445	$ 676
Nonrecurring | Level 3 | Other | Minimum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]	0.00%	0.00%
Projected Constant Default Rate	[1]	0.00%	0.00%
Projected Loss Severity	[1]	100.00%	100.00%
Discount Rate	[1]	4.90%	6.60%
Nonrecurring | Level 3 | Other | Maximum | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]	0.00%	0.00%
Projected Constant Default Rate	[1]	10.00%	10.00%
Projected Loss Severity	[1]	100.00%	100.00%
Discount Rate	[1]	6.00%	8.00%
Nonrecurring | Level 3 | Other | Weighted Average | Discounted cash flow
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Projected Constant Prepayment Rate	[1]	0.00%	0.00%
Projected Constant Default Rate	[1]	5.00%	5.00%
Projected Loss Severity	[1]	100.00%	100.00%
Discount Rate	[1]	5.40%	7.30%

[1] For impaired loans, other real estate owned and foreclosed assets the ranges shown may vary positively or negatively based on the comparable sales reported in the current appraisal. In certain instances, the range can be significant due to small sample sizes and in some cases the property being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.

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FAIR VALUE - FAIR VALUE BY BALANCE SHEET GROUPING (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financial assets:
Securities trading	$ 8,151	$ 7,584
Securities available-for-sale	379,734	265,447
Securities held-to-maturity	0	202,677
Loans held for sale, at fair value	33,990	20,871
Loans held for sale, lower of cost or fair value	15,905	33,530
Carrying Amount
Financial assets:
Cash and cash equivalents	707,593	486,727
Securities trading	8,151	7,584
Securities available-for-sale	379,734	265,447
Securities held-to-maturity		199,174
Loans held for sale, at fair value	33,990	20,871
Loans held for sale, lower of cost or fair value	15,905	33,530
Loans and leases held for investment—net	6,811,470	6,354,679
Accrued interest receivable	21,538	26,201
Mortgage servicing rights	6,150	3,943
Financial liabilities:
Time deposits and savings	6,610,674	6,044,051
Securities sold under agreements to repurchase	35,000	35,000
Advances from the Federal Home Loan Bank	665,000	727,000
Subordinated notes and debentures and other	56,408	56,016
Accrued interest payable	1,700	1,667
Total Fair Value
Financial assets:
Cash and cash equivalents	707,593	486,727
Securities trading	8,151	7,584
Securities available-for-sale	379,734	265,447
Securities held-to-maturity		202,677
Loans held for sale, at fair value	33,990	20,871
Loans held for sale, lower of cost or fair value	16,610	33,530
Loans and leases held for investment—net	6,982,624	6,640,918
Accrued interest receivable	21,538	26,201
Mortgage servicing rights	6,150	3,943
Financial liabilities:
Time deposits and savings	6,238,765	5,946,991
Securities sold under agreements to repurchase	35,640	36,391
Advances from the Federal Home Loan Bank	671,061	747,940
Subordinated notes and debentures and other	52,401	58,299
Accrued interest payable	1,700	1,667
Level 1
Financial assets:
Cash and cash equivalents	707,593	486,727
Securities trading	0	0
Securities available-for-sale	0	0
Securities held-to-maturity		0
Loans held for sale, at fair value	0	0
Loans held for sale, lower of cost or fair value	0	0
Loans and leases held for investment—net	0	0
Accrued interest receivable	0	0
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits and savings	0	0
Securities sold under agreements to repurchase	0	0
Advances from the Federal Home Loan Bank	0	0
Subordinated notes and debentures and other	0	0
Accrued interest payable	0	0
Level 2
Financial assets:
Cash and cash equivalents	0	0
Securities trading	0	0
Securities available-for-sale	297,508	256,083
Securities held-to-maturity		77,415
Loans held for sale, at fair value	33,990	20,871
Loans held for sale, lower of cost or fair value	0	0
Loans and leases held for investment—net	0	0
Accrued interest receivable	0	0
Mortgage servicing rights	0	0
Financial liabilities:
Time deposits and savings	6,238,765	5,946,991
Securities sold under agreements to repurchase	35,640	36,391
Advances from the Federal Home Loan Bank	671,061	747,940
Subordinated notes and debentures and other	52,401	58,299
Accrued interest payable	1,700	1,667
Level 3
Financial assets:
Cash and cash equivalents	0	0
Securities trading	8,151	7,584
Securities available-for-sale	82,226	9,364
Securities held-to-maturity		125,262
Loans held for sale, at fair value	0	0
Loans held for sale, lower of cost or fair value	16,610	33,530
Loans and leases held for investment—net	6,982,624	6,640,918
Accrued interest receivable	21,538	26,201
Mortgage servicing rights	6,150	3,943
Financial liabilities:
Time deposits and savings	0	0
Securities sold under agreements to repurchase	0	0
Advances from the Federal Home Loan Bank	0	0
Subordinated notes and debentures and other	0	0
Accrued interest payable	$ 0	$ 0

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SECURITIES - AMORTIZED COST, CARRYING AMOUNT AND FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands		Dec. 31, 2016	Jun. 30, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading		$ 8,151	$ 7,584
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost		375,846	263,158
Available-for-sale, Unrealized Gains		8,055	2,496
Available-for-sale, Unrealized Losses		(4,167)	(207)
Available-for-sale		379,734	265,447
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity, Carrying Amount		0	199,174
Held-to-maturity, Unrecognized Gains		0	13,548
Held-to-maturity, Unrecognized Losses		0	(10,045)
Held to maturity - Fair Value		0	202,677
Mortgage-backed securities (RMBS)
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading		0	0
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost		112,891	42,299
Available-for-sale, Unrealized Gains		6,065	810
Available-for-sale, Unrealized Losses		(3,466)	(23)
Available-for-sale		115,490	43,086
U.S. agencies
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading	[1]	0	0
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost	[1]	33,422	33,256
Available-for-sale, Unrealized Gains	[1]	265	489
Available-for-sale, Unrealized Losses	[1]	(423)	(23)
Available-for-sale	[1]	33,264	33,722
Non-agency RMBS
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading	[2]	0	0
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost	[2]	79,469	9,043
Available-for-sale, Unrealized Gains	[2]	5,800	321
Available-for-sale, Unrealized Losses	[2]	(3,043)	0
Available-for-sale	[2]	82,226	9,364
Other Debt Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading		8,151	7,584
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost		262,955	220,859
Available-for-sale, Unrealized Gains		1,990	1,686
Available-for-sale, Unrealized Losses		(701)	(184)
Available-for-sale		264,244	222,361
Municipal
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading		0	0
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost		29,907	34,543
Available-for-sale, Unrealized Gains		15	185
Available-for-sale, Unrealized Losses		(549)	(10)
Available-for-sale		29,373	34,718
Non-agency
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading		8,151	7,584
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale, Amortized Cost		233,048	186,316
Available-for-sale, Unrealized Gains		1,975	1,501
Available-for-sale, Unrealized Losses		(152)	(174)
Available-for-sale		234,871	187,643
Mortgage-backed securities (RMBS)
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity, Carrying Amount		0	163,278
Held-to-maturity, Unrecognized Gains		0	7,938
Held-to-maturity, Unrecognized Losses		0	(10,045)
Held to maturity - Fair Value		0	161,171
Other Debt Securities
Schedule of Held-to-maturity Securities [Line Items]
Held-to-maturity, Carrying Amount		0	35,896
Held-to-maturity, Unrecognized Gains		0	5,610
Held-to-maturity, Unrecognized Losses		0	0
Held to maturity - Fair Value		$ 0	$ 41,506

[1] U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

[2] Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

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SECURITIES - NARRATIVE (Details)		3 Months Ended	6 Months Ended	12 Months Ended
		Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) security	Jun. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
Available-for-sale Securities [Abstract]
Securities transferred from held-to-maturity to available-for-sale portfolio		$ 194,153,000	$ 194,153,000		$ 0
Net unrealized gain recognized in other comprehensive income of held-to-maturity securities transferred to available-for-sale		$ 3,618,000
Available-for-sale			379,734,000	$ 265,447,000
Certain Loans Acquired in Transfer Accounted for as Debt Securities [Abstract]
Available-for-sale securities, other-than-temporary loss charged to income			1,310,000	0
Available-for-sale securities pledged as collateral			19,352,000
Debt securities available-for-sale and held-to-maturity pledged to secure borrowings				39,961,000
Non-agency RMBS
Available-for-sale Securities [Abstract]
Available-for-sale	[1]		82,226,000	$ 9,364,000
RMBS, Super Senior Securities
Available-for-sale Securities [Abstract]
Available-for-sale			$ 81,210,000
Available-for-sale, number of securities | security			44
Non-Agency RMBS, Mezzanine Z-Tranche Securities
Available-for-sale Securities [Abstract]
Available-for-sale			$ 49,000
Available-for-sale, number of securities | security			2
RMBS, Senior-Support Securities
Certain Loans Acquired in Transfer Accounted for as Debt Securities [Abstract]
Number of securities account for as debt security acquired with deteriorated credit quality | security			1
Fair value of security acquired with deteriorated credit quality	[1]		$ 967,000
Cost of securities acquired in transfer			17,740,000
Carrying amount of securities acquired in transfer			30,560,000
Accretable yield of securities acquired in transfer, forecasted			9,015,000
Nonaccretable yield of securities acquired in transfer, forecasted			3,805,000
Balance of securities acquired in transfer			0
Amortizable premium of securities acquired in transfer, forecasted			0
Nonamortizable premium of securities acquired in transfer, forecasted			$ 1,162,000

[1] Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

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SECURITIES - SCHEDULE OF UNREALIZED LOSS ON INVESTMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	$ 97,810	$ 15,833
Available-for-sale securities in loss position, Gross Unrealized Losses	(1,033)	(15)
Available-for-sale securities in loss position for more than 12 months, Fair Value	49,091	22,057
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(3,134)	(192)
Available-for-sale securities in loss position, Total, Fair Value	146,901	37,890
Available-for-sale securities in loss position, Gross Unrealized Losses	(4,167)	(207)
Held-to-maturity securities in loss position for
Held-to-maturity securities in loss position for less than 12 months, Fair Value	0	15,140
Held-to-maturity securities in loss position for less than 12 months, Gross Unrealized Losses	0	(420)
Held-to-maturity securities in loss position for more than 12 months, Fair Value	0	53,372
Held-to-maturity securities in loss position for more than 12 months, Gross Unrealized Losses	0	(9,625)
Held-to-maturity securities in loss position, Total, Fair Value	0	68,512
Held-to-maturity securities in loss position, Gross Unrealized Losses	0	(10,045)
Mortgage-backed securities (RMBS)
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	31,264	0
Available-for-sale securities in loss position, Gross Unrealized Losses	(370)	0
Available-for-sale securities in loss position for more than 12 months, Fair Value	28,406	5,094
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(3,096)	(23)
Available-for-sale securities in loss position, Total, Fair Value	59,670	5,094
Available-for-sale securities in loss position, Gross Unrealized Losses	(3,466)	(23)
U.S. agencies
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	22,228	0
Available-for-sale securities in loss position, Gross Unrealized Losses	(327)	0
Available-for-sale securities in loss position for more than 12 months, Fair Value	2,367	5,094
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(96)	(23)
Available-for-sale securities in loss position, Total, Fair Value	24,595	5,094
Available-for-sale securities in loss position, Gross Unrealized Losses	(423)	(23)
Non-agency RMBS
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	9,036	0
Available-for-sale securities in loss position, Gross Unrealized Losses	(43)	0
Available-for-sale securities in loss position for more than 12 months, Fair Value	26,039	0
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(3,000)	0
Available-for-sale securities in loss position, Total, Fair Value	35,075	0
Available-for-sale securities in loss position, Gross Unrealized Losses	(3,043)	0
Other Debt Securities
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	66,546	15,833
Available-for-sale securities in loss position, Gross Unrealized Losses	(663)	(15)
Available-for-sale securities in loss position for more than 12 months, Fair Value	20,685	16,963
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(38)	(169)
Available-for-sale securities in loss position, Total, Fair Value	87,231	32,796
Available-for-sale securities in loss position, Gross Unrealized Losses	(701)	(184)
Municipal
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	20,204	10,267
Available-for-sale securities in loss position, Gross Unrealized Losses	(531)	(10)
Available-for-sale securities in loss position for more than 12 months, Fair Value	8,317	0
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(18)	0
Available-for-sale securities in loss position, Total, Fair Value	28,521	10,267
Available-for-sale securities in loss position, Gross Unrealized Losses	(549)	(10)
Non-agency
Available-for-sale securities in loss position for
Available-for-sale securities in loss position for less than 12 months, Fair Value	46,342	5,566
Available-for-sale securities in loss position, Gross Unrealized Losses	(132)	(5)
Available-for-sale securities in loss position for more than 12 months, Fair Value	12,368	16,963
Available-for-sale securities in loss position for more than 12 months, Gross Unrealized Losses	(20)	(169)
Available-for-sale securities in loss position, Total, Fair Value	58,710	22,529
Available-for-sale securities in loss position, Gross Unrealized Losses	(152)	(174)
Mortgage-backed securities (RMBS)
Held-to-maturity securities in loss position for
Held-to-maturity securities in loss position for less than 12 months, Fair Value	0	15,140
Held-to-maturity securities in loss position for less than 12 months, Gross Unrealized Losses	0	(420)
Held-to-maturity securities in loss position for more than 12 months, Fair Value	0	53,372
Held-to-maturity securities in loss position for more than 12 months, Gross Unrealized Losses	0	(9,625)
Held-to-maturity securities in loss position, Total, Fair Value	0	68,512
Held-to-maturity securities in loss position, Gross Unrealized Losses	0	(10,045)
Other Debt Securities
Held-to-maturity securities in loss position for
Held-to-maturity securities in loss position for less than 12 months, Fair Value	0	0
Held-to-maturity securities in loss position for less than 12 months, Gross Unrealized Losses	0	0
Held-to-maturity securities in loss position for more than 12 months, Fair Value	0	0
Held-to-maturity securities in loss position for more than 12 months, Gross Unrealized Losses	0	0
Held-to-maturity securities in loss position, Total, Fair Value	0	0
Held-to-maturity securities in loss position, Gross Unrealized Losses	$ 0	$ 0

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SECURITIES - OTHER THAN TEMPORARY IMPAIRMENT, CREDIT LOSSES RECOGNIZED IN EARNINGS (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016 USD ($) security	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) security	Dec. 31, 2015 USD ($)	Jun. 30, 2016 security
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items]
Number of securities in a continuous loss position | security	15		15		26
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Beginning balance	$ (20,611)	$ (20,621)	$ (20,865)	$ (20,503)
Additions for the amounts related to credit loss for which an other-than-temporary impairment was not previously recognized	0	0	0	(99)
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	(1,350)	(23)	(1,470)	(42)
Credit losses realized for securities sold	5,330	116	5,704	116
Ending balance	(16,631)	$ (20,528)	(16,631)	$ (20,528)
Non-agency RMBS
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Roll Forward]
Increases to the amount related to the credit loss for which other-than-temporary impairment was previously recognized	(1,350)
Ending balance	(16,631)		(16,631)
Carrying amount of securities with cumulative credit losses	$ 48,317		$ 48,317
Number of securities with other than temporary impairment | security	3		3
Carrying value of securities with other than temporary impairment	$ 7,085		$ 7,085

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SECURITIES - REALIZED GAIN (LOSS) ON SALE OF SECURITIES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds	$ 95,386	$ 10,069	$ 121,061	$ 10,069
Gross realized gains	5,089	933	6,079	933
Gross realized losses	(3,467)	0	(3,467)	0
Net realized gain on securities	$ 1,622	$ 933	$ 2,612	$ 933

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SECURITIES - UNREALIZED GAIN (LOSS) ON INVESTMENTS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Investments, Debt and Equity Securities [Abstract]
Available-for-sale debt securities—net unrealized gains	$ 3,889	$ 2,288
Available-for-sale debt securities—non-credit related losses	(7,560)	(138)
Held-to-maturity debt securities—non-credit related losses	0	(14,129)
Subtotal	(3,671)	(11,979)
Tax (expense) benefit	1,169	4,675
Net unrealized gain (loss) on investment securities in accumulated other comprehensive income (loss)	$ (2,502)	$ (7,304)

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SECURITIES - INVESTMENTS CLASSIFIED BY CONTRACTUAL MATURITY DATE (Details) - USD ($) $ in Thousands		Dec. 31, 2016	Jun. 30, 2016
Schedule of Trading Securities and Other Trading Assets [Line Items]
Trading, Fair Value		$ 8,151
Available-for-sale, Amortized Cost:
Available-for-sale, Amortized Cost		375,846
Available-for-sale, Fair Value:
Available-for-sale, Fair Value		379,734	$ 265,447
Held-to-maturity, Carrying Amount:
Held-to-maturity, Amortized Cost		0
Held-to-maturity, Fair Value:
Held to maturity - Fair Value		0	202,677
RMBS U.S. agencies
Available-for-sale, Amortized Cost:
Due within one year		1,955
Due one to five years		6,442
Due five to ten years		5,730
Due after ten years		19,295
Available-for-sale, Amortized Cost		33,422
Available-for-sale, Fair Value:
Due within one year		1,945
Due one to five years		6,426
Due five to ten years		5,730
Due after ten years		19,163
Available-for-sale, Fair Value	[1]	33,264	33,722
RMBS Non-agency
Available-for-sale, Amortized Cost:
Due within one year		9,004
Due one to five years		28,435
Due five to ten years		22,744
Due after ten years		19,286
Available-for-sale, Amortized Cost		79,469
Available-for-sale, Fair Value:
Due within one year		9,343
Due one to five years		29,591
Due five to ten years		23,441
Due after ten years		19,851
Available-for-sale, Fair Value	[2]	82,226	9,364
Other Debt Securities
Schedule of Trading Securities and Other Trading Assets [Line Items]
Due one to five years		55
Due five to ten years		291
Due after ten years		7,805
Trading, Fair Value		8,151
Available-for-sale, Amortized Cost:
Due within one year		162,740
Due one to five years		86,301
Due five to ten years		59
Due after ten years		13,855
Available-for-sale, Amortized Cost		262,955
Available-for-sale, Fair Value:
Due within one year		163,501
Due one to five years		87,320
Due five to ten years		58
Due after ten years		13,365
Available-for-sale, Fair Value		264,244	222,361
RMBS U.S. agencies
Held-to-maturity, Carrying Amount:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held-to-maturity, Amortized Cost		0
Held-to-maturity, Fair Value:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held to maturity - Fair Value	[1]	0	35,909
RMBS Non-agency
Held-to-maturity, Carrying Amount:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held-to-maturity, Amortized Cost		0
Held-to-maturity, Fair Value:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held to maturity - Fair Value	[2]	0	125,262
Other Debt Securities
Held-to-maturity, Carrying Amount:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held-to-maturity, Amortized Cost		0
Held-to-maturity, Fair Value:
Due within one year		0
Due one to five years		0
Due five to ten years		0
Due after ten years		0
Held to maturity - Fair Value		$ 0	$ 41,506

[1] U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

[2] Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - LOAN PORTFOLIO COMPOSITION (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	$ 6,877,518		$ 6,402,459
Allowance for loan and lease losses	(40,928)	$ (37,596)	(35,826)	$ (35,071)	$ (31,078)	$ (28,327)
Unaccreted discounts and loan and lease fees	(25,120)		(11,954)
Total net loans and leases	6,811,470		6,354,679
Single family warehouse loans	179,747		173,148
Mortgage
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	3,719,038		3,678,520
Allowance for loan and lease losses	(19,243)	(19,483)	(18,666)	(17,167)	(16,313)	(13,664)
Unaccreted discounts and loan and lease fees	11,693		13,142
Home equity
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	2,412		2,470
Allowance for loan and lease losses	(22)	(22)	(23)	(45)	(94)	(122)
Unaccreted discounts and loan and lease fees	29		24
Warehouse and other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	480,378		537,714
Allowance for loan and lease losses	(2,179)	(2,554)	(2,685)	(2,643)	(2,057)	(1,879)
Unaccreted discounts and loan and lease fees	(2,173)		(2,200)
Multifamily real estate secured
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	1,451,535		1,373,216
Allowance for loan and lease losses	(3,913)	(3,922)	(3,938)	(3,293)	(4,180)	(4,363)
Unaccreted discounts and loan and lease fees	4,496		3,957
Commercial real estate secured
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	155,124		121,746
Allowance for loan and lease losses	(1,001)	(917)	(882)	(736)	(961)	(1,103)
Unaccreted discounts and loan and lease fees	812		542
Auto and RV secured
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	107,430		73,676
Allowance for loan and lease losses	(2,017)	(1,914)	(1,615)	(1,840)	(1,339)	(953)
Unaccreted discounts and loan and lease fees	1,396		975
Factoring
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	134,349		98,275
Allowance for loan and lease losses	(339)	(294)	(245)	(359)	(342)	(292)
Unaccreted discounts and loan and lease fees	(40,115)		(30,533)
Commercial and Industrial
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	763,811		514,300
Allowance for loan and lease losses	(9,764)	(8,411)	(7,630)	(6,602)	(5,663)	(5,882)
Unaccreted discounts and loan and lease fees	810		2,172
Other
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total gross loans and leases	63,441		2,542
Allowance for loan and lease losses	(2,450)	$ (79)	(142)	$ (2,386)	$ (129)	$ (69)
Unaccreted discounts and loan and lease fees	$ (2,068)		$ (33)

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - ALLOWANCE FOR CREDIT LOSS NARRATIVE (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2016 USD ($) class	Jun. 30, 2016 USD ($)
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	$ 6,842,749	$ 6,370,390
Number of classes loans are divided for LTV analysis | class	2
Auto and RV secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	$ 107,214	73,398
Auto and RV secured | FICO greater than or equal to 770
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	44,551
Auto and RV secured | FICO 715 - 769
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	38,248
Auto and RV secured | FICO 700 - 714
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	10,740
Auto and RV secured | FICO 660 - 699
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	11,824
Auto and RV secured | FICO less than 660
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	1,851
Single Family Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	3,690,687	3,649,910
Single Family Mortgage | LTV less than or equal to 60%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	1,946,922
Single Family Mortgage | LTV 61% - 70%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	1,348,394
Single Family Mortgage | LTV 71% - 80%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	395,171
Single Family Mortgage | LTV greater than 80%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	200
Multifamily real estate secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	1,446,057	1,370,998
Multifamily real estate secured | LTV greater than 80%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	0
Multifamily real estate secured | LTV less than or equal to 55%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	674,726
Multifamily real estate secured | LTV 56% - 65%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	473,901
Multifamily real estate secured | LTV 66% - 75%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	284,996
Multifamily real estate secured | LTV 76% - 80%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	12,434
Commercial real estate secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	154,892	$ 121,492
Commercial real estate secured | LTV 61% - 70%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	42,558
Commercial real estate secured | LTV 71% - 80%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	10,337
Commercial real estate secured | LTV less than or equal to 50%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	65,740
Commercial real estate secured | LTV 51% - 60%
Financing Receivable, Allowance for Credit Losses [Line Items]
Loans and leases collectively evaluated for impairment	$ 36,257

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - ALLOWANCE FOR LOAN LOSS BY PORTFOLIO CLASS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	$ 37,596	$ 31,078	$ 35,826	$ 28,327
Provision for loan and lease losses	4,100	3,400	6,000	5,800
Charge-offs	(938)	(118)	(1,163)	(285)
Recoveries	170	711	265	1,229
Balance, end of period	40,928	35,071	40,928	35,071
Mortgage
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	19,483	16,313	18,666	13,664
Provision for loan and lease losses	601	911	1,400	3,418
Charge-offs	(841)	(61)	(868)	(77)
Recoveries	0	4	45	162
Balance, end of period	19,243	17,167	19,243	17,167
Home equity
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	22	94	23	122
Provision for loan and lease losses	(16)	(60)	(21)	(96)
Charge-offs	0	(1)	0	(2)
Recoveries	16	12	20	21
Balance, end of period	22	45	22	45
Warehouse and other
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	2,554	2,057	2,685	1,879
Provision for loan and lease losses	(375)	586	(506)	764
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	2,179	2,643	2,179	2,643
Multifamily real estate secured
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	3,922	4,180	3,938	4,363
Provision for loan and lease losses	(9)	(887)	(25)	(1,070)
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	3,913	3,293	3,913	3,293
Commercial real estate secured
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	917	961	882	1,103
Provision for loan and lease losses	84	(895)	142	(1,349)
Charge-offs	0	0	(23)	0
Recoveries	0	670	0	982
Balance, end of period	1,001	736	1,001	736
Auto and RV secured
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	1,914	1,339	1,615	953
Provision for loan and lease losses	123	532	449	1,029
Charge-offs	(66)	(56)	(139)	(206)
Recoveries	46	25	92	64
Balance, end of period	2,017	1,840	2,017	1,840
Factoring
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	294	342	245	292
Provision for loan and lease losses	45	17	94	67
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	339	359	339	359
Commercial and Industrial
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	8,411	5,663	7,630	5,882
Provision for loan and lease losses	1,353	939	2,134	720
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Balance, end of period	9,764	6,602	9,764	6,602
Other
Allowance for Loan and Lease Losses [Roll Forward]
Balance, beginning of period	79	129	142	69
Provision for loan and lease losses	2,294	2,257	2,333	2,317
Charge-offs	(31)	0	(133)	0
Recoveries	108	0	108	0
Balance, end of period	$ 2,450	$ 2,386	$ 2,450	$ 2,386

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - LOANS INDIVIDUALLY EVALUATED FOR IMPAIRMENT (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	$ 40,434	$ 37,059
Principal Balance Adjustment	5,665	4,990
Unpaid Book Balance	34,769	32,069
Accrued Interest/Origination Fees	1,308	977
Recorded Investment	36,077	33,046
Related Allowance	$ 705	$ 692
Loans and Leases, Evaluated Individually For Impairment As a Percentage of Gross Loans [Abstract]
Unpaid Principal Balance, Ratio to All Loans and Leases	0.59%	0.58%
Principal Balance Adjustment, Ratio to All Loans and Leases	0.08%	0.08%
Unpaid Book Balance, Ratio to All Loans and Leases	0.51%	0.50%
Accrued Interest/Origination Fees, Ratio to All Loans and Leases	0.02%	0.02%
Recorded Investment, Ratio to All Loans and Leases	0.52%	0.52%
Related Allowance, Ratio to All Loans and Leases	0.01%	0.01%
Mortgage | In-house originated
Loans and Leases, Evaluated Individually For Impairment, With No Related Allowance Recorded [Abstract]
Unpaid Principal Balance	$ 9,954	$ 8,989
Principal Balance Adjustment	1,517	727
Unpaid Book Balance	8,437	8,262
Accrued Interest/Origination Fees	937	657
Recorded Investment	9,374	8,919
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	14,376	14,696
Unpaid Book Balance	14,376	14,696
Accrued Interest/Origination Fees	1	65
Recorded Investment	14,377	14,761
Related Allowance	574	575
Mortgage | Purchased
Loans and Leases, Evaluated Individually For Impairment, With No Related Allowance Recorded [Abstract]
Unpaid Principal Balance	5,221	5,852
Principal Balance Adjustment	2,074	2,132
Unpaid Book Balance	3,147	3,720
Accrued Interest/Origination Fees	114	110
Recorded Investment	3,261	3,830
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	2,391	1,932
Unpaid Book Balance	2,391	1,932
Accrued Interest/Origination Fees	6	5
Recorded Investment	2,397	1,937
Related Allowance	64	46
Multifamily real estate secured | In-house originated
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	4,164	791
Unpaid Book Balance	4,164	791
Accrued Interest/Origination Fees	133	65
Recorded Investment	4,297	856
Related Allowance	19	1
Multifamily real estate secured | Purchased
Loans and Leases, Evaluated Individually For Impairment, With No Related Allowance Recorded [Abstract]
Unpaid Principal Balance	2,492	2,520
Principal Balance Adjustment	1,178	1,093
Unpaid Book Balance	1,314	1,427
Accrued Interest/Origination Fees	0	0
Recorded Investment	1,314	1,427
Commercial real estate secured | Purchased
Loans and Leases, Evaluated Individually For Impairment, With No Related Allowance Recorded [Abstract]
Unpaid Principal Balance	630	629
Principal Balance Adjustment	398	375
Unpaid Book Balance	232	254
Accrued Interest/Origination Fees	100	61
Recorded Investment	332	315
Auto and RV secured | In-house originated
Loans and Leases, Evaluated Individually For Impairment, With No Related Allowance Recorded [Abstract]
Unpaid Principal Balance	673	902
Principal Balance Adjustment	498	663
Unpaid Book Balance	175	239
Accrued Interest/Origination Fees	12	10
Recorded Investment	187	249
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	41	39
Unpaid Book Balance	41	39
Accrued Interest/Origination Fees	5	4
Recorded Investment	46	43
Related Allowance	2	2
Home equity | In-house originated
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	47	33
Unpaid Book Balance	47	33
Accrued Interest/Origination Fees	0	0
Recorded Investment	47	33
Related Allowance	1	1
Other
Loans and Leases, Evaluated Individually For Impairment, With Related Allowance Recorded [Abstract]
Unpaid Principal Balance	445	676
Unpaid Book Balance	445	676
Accrued Interest/Origination Fees	0	0
Recorded Investment	445	676
Related Allowance	$ 45	$ 67

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LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - ALLOWANCE FOR LOAN LOSS BY PORTFOLIO SEGMENT (Details) - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		$ 705	$ 692
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		40,223	35,134
Total ending allowance balance		40,928	35,826
Loans and leases individually evaluated for impairment	[1]	34,769	32,069
Loans and leases collectively evaluated for impairment		6,842,749	6,370,390
Principal loan and lease balance		6,877,518	6,402,459
Unaccreted discounts and loan and lease fees		(25,120)	(11,954)
Accrued interest receivable		19,106	22,831
Total recorded investment in loans and leases		$ 6,871,504	$ 6,413,336
Threshold period for TDRs to be considered performing		6 months	6 months
Mortgage
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		$ 638	$ 621
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		18,605	18,045
Total ending allowance balance		19,243	18,666
Loans and leases individually evaluated for impairment	[1]	28,351	28,610
Loans and leases collectively evaluated for impairment		3,690,687	3,649,910
Principal loan and lease balance		3,719,038	3,678,520
Unaccreted discounts and loan and lease fees		11,693	13,142
Accrued interest receivable		8,336	12,460
Total recorded investment in loans and leases		3,739,067	3,704,122
Home equity
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		1	1
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		21	22
Total ending allowance balance		22	23
Loans and leases individually evaluated for impairment	[1]	47	33
Loans and leases collectively evaluated for impairment		2,365	2,437
Principal loan and lease balance		2,412	2,470
Unaccreted discounts and loan and lease fees		29	24
Accrued interest receivable		2	2
Total recorded investment in loans and leases		2,443	2,496
Warehouse and other
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		0	0
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		2,179	2,685
Total ending allowance balance		2,179	2,685
Loans and leases individually evaluated for impairment	[1]	0	0
Loans and leases collectively evaluated for impairment		480,378	537,714
Principal loan and lease balance		480,378	537,714
Unaccreted discounts and loan and lease fees		(2,173)	(2,200)
Accrued interest receivable		1,842	1,870
Total recorded investment in loans and leases		480,047	537,384
Multifamily real estate secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		19	1
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		3,894	3,937
Total ending allowance balance		3,913	3,938
Loans and leases individually evaluated for impairment	[1]	5,478	2,218
Loans and leases collectively evaluated for impairment		1,446,057	1,370,998
Principal loan and lease balance		1,451,535	1,373,216
Unaccreted discounts and loan and lease fees		4,496	3,957
Accrued interest receivable		4,541	5,409
Total recorded investment in loans and leases		1,460,572	1,382,582
Commercial real estate secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		0	0
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		1,001	882
Total ending allowance balance		1,001	882
Loans and leases individually evaluated for impairment	[1]	232	254
Loans and leases collectively evaluated for impairment		154,892	121,492
Principal loan and lease balance		155,124	121,746
Unaccreted discounts and loan and lease fees		812	542
Accrued interest receivable		400	389
Total recorded investment in loans and leases		156,336	122,677
Auto and RV secured
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		2	2
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		2,015	1,613
Total ending allowance balance		2,017	1,615
Loans and leases individually evaluated for impairment	[1]	216	278
Loans and leases collectively evaluated for impairment		107,214	73,398
Principal loan and lease balance		107,430	73,676
Unaccreted discounts and loan and lease fees		1,396	975
Accrued interest receivable		225	169
Total recorded investment in loans and leases		109,051	74,820
Factoring
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		0	0
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		339	245
Total ending allowance balance		339	245
Loans and leases individually evaluated for impairment	[1]	0	0
Loans and leases collectively evaluated for impairment		134,349	98,275
Principal loan and lease balance		134,349	98,275
Unaccreted discounts and loan and lease fees		(40,115)	(30,533)
Accrued interest receivable		219	327
Total recorded investment in loans and leases		94,453	68,069
Commercial and Industrial
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		0	0
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		9,764	7,630
Total ending allowance balance		9,764	7,630
Loans and leases individually evaluated for impairment	[1]	0	0
Loans and leases collectively evaluated for impairment		763,811	514,300
Principal loan and lease balance		763,811	514,300
Unaccreted discounts and loan and lease fees		810	2,172
Accrued interest receivable		3,008	2,202
Total recorded investment in loans and leases		767,629	518,674
Other
Financing Receivable, Allowance for Credit Losses [Line Items]
Ending allowance balance attributable to loans and leases, individually evaluated for impairment		45	67
Ending allowance balance attributable to loans and leases, collectively evaluated for impairment		2,405	75
Total ending allowance balance		2,450	142
Loans and leases individually evaluated for impairment	[1]	445	676
Loans and leases collectively evaluated for impairment		62,996	1,866
Principal loan and lease balance		63,441	2,542
Unaccreted discounts and loan and lease fees		(2,068)	(33)
Accrued interest receivable		533	3
Total recorded investment in loans and leases		$ 61,906	$ 2,512

[1] Loans and leases evaluated for impairment include Troubled Debt Restructurings (“TDRs”) that have been performing for more than six months

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - NONPERFORMING LOANS (Details) - Nonperforming - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases secured by real estate	$ 33,902	$ 30,905
Total non-performing loans and leases	$ 34,563	$ 31,859
Nonperforming loans to total loans, percent	0.50%	0.50%
Mortgage | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	$ 22,814	$ 22,958
Mortgage | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	5,331	5,442
Home equity | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	47	33
Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	4,164	791
Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	1,314	1,427
Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	232	254
Auto and RV secured
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	216	278
Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total non-performing loans and leases	$ 445	$ 676

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - NONPERFORMING LOANS NARRATIVE (Details) - loan	6 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Impaired [Line Items]
Number of loans and leases past due over 90 days and still accruing	0
Ratio of nonperforming loans and leases considered TDRs	8.34%	9.63%
Threshold period for TDRs to be considered performing	6 months	6 months
Nonperforming | Mortgage
Financing Receivable, Impaired [Line Items]
Ratio of non-performing loans and leases that are single family mortgage	81.43%
Percentage of aggregate single family first mortgage loans and leases written down	50.55%

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - UNPAID PRINCIPAL BALANCE FOR PERFORMING AND NONPERFORMING (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 6,877,518	$ 6,402,459
Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	6,842,955	6,370,600
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	34,563	31,859
Mortgage
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,719,038	3,678,520
Mortgage | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,690,893	3,650,120
Mortgage | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	28,145	28,400
Home equity
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,412	2,470
Home equity | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,365	2,437
Home equity | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	47	33
Warehouse and other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	480,378	537,714
Warehouse and other | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	480,378	537,714
Warehouse and other | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Multifamily real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,451,535	1,373,216
Multifamily real estate secured | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,446,057	1,370,998
Multifamily real estate secured | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	5,478	2,218
Commercial real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	155,124	121,746
Commercial real estate secured | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	154,892	121,492
Commercial real estate secured | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	232	254
Auto and RV secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	107,430	73,676
Auto and RV secured | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	107,214	73,398
Auto and RV secured | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	216	278
Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	134,349	98,275
Factoring | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	134,349	98,275
Factoring | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	763,811	514,300
Commercial and Industrial | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	763,811	514,300
Commercial and Industrial | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	63,441	2,542
Other | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	62,996	1,866
Other | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 445	$ 676

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - PERFORMING AND NONPERFORMING BY CLASS AND SOURCE (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 6,877,518	$ 6,402,459
Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	6,842,955	6,370,600
Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	34,563	31,859
Single Family Mortgage
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,719,038	3,678,520
Single Family Mortgage | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,690,893	3,650,120
Single Family Mortgage | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	28,145	28,400
Single Family Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,652,173	3,601,587
Single Family Mortgage | In-house originated | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,629,359	3,578,629
Single Family Mortgage | In-house originated | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	22,814	22,958
Single Family Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	66,865	76,933
Single Family Mortgage | Purchased | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	61,534	71,491
Single Family Mortgage | Purchased | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	5,331	5,442
Multifamily real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,451,535	1,373,216
Multifamily real estate secured | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,446,057	1,370,998
Multifamily real estate secured | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	5,478	2,218
Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,360,791	1,271,170
Multifamily real estate secured | In-house originated | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,356,627	1,270,379
Multifamily real estate secured | In-house originated | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	4,164	791
Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	90,744	102,046
Multifamily real estate secured | Purchased | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	89,430	100,619
Multifamily real estate secured | Purchased | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,314	1,427
Commercial real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	155,124	121,746
Commercial real estate secured | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	154,892	121,492
Commercial real estate secured | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	232	254
Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	142,911	109,370
Commercial real estate secured | In-house originated | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	142,911	109,370
Commercial real estate secured | In-house originated | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	12,213	12,376
Commercial real estate secured | Purchased | Performing
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	11,981	12,122
Commercial real estate secured | Purchased | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 232	$ 254

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - TROUBLED DEBT RESTRUCTURINGS BY CLASS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015	Jun. 30, 2016
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	$ 206		$ 206		$ 210
Non-performing loans and leases	34,563		34,563		31,859
Total impaired loans and leases	34,769		34,769		32,069
Interest income recognized on performing TDRs	3	$ 2	6	$ 4
Average balances of performing TDRs	207	215	208	215
Average balances of impaired loans	38,505	28,633	36,357	29,438
Mortgage
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	206		206		210
Non-performing loans and leases	28,145		28,145		28,400
Total impaired loans and leases	28,351		28,351		28,610
Interest income recognized on performing TDRs	3	2	6	4
Average balances of performing TDRs	207	215	208	215
Average balances of impaired loans	31,855	22,195	30,773	22,483
Home equity
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	47		47		33
Total impaired loans and leases	47		47		33
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	40	8	37	8
Warehouse and other
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	0		0		0
Total impaired loans and leases	0		0		0
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	0	0	0	0
Multifamily real estate secured
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	5,478		5,478		2,218
Total impaired loans and leases	5,478		5,478		2,218
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	5,606	5,064	4,476	5,176
Commercial real estate secured
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	232		232		254
Total impaired loans and leases	232		232		254
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	232	1,045	239	1,406
Auto and RV secured
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	216		216		278
Total impaired loans and leases	216		216		278
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	262	321	$ 267	365
Auto and RV secured | Interest-only Payments | Minimum
Financing Receivable, Modifications [Line Items]
Financing receivable, modifications, repayment period by borrower			6 months
Auto and RV secured | Interest-only Payments | Maximum
Financing Receivable, Modifications [Line Items]
Financing receivable, modifications, repayment period by borrower			1 year
Factoring
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		$ 0		0
Non-performing loans and leases	0		0		0
Total impaired loans and leases	0		0		0
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	0	0	0	0
Commercial and Industrial
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	0		0		0
Total impaired loans and leases	0		0		0
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	0	0	0	0
Other
Financing Receivable, Modifications [Line Items]
Performing loans temporarily modified as TDR	0		0		0
Non-performing loans and leases	445		445		676
Total impaired loans and leases	445		445		$ 676
Interest income recognized on performing TDRs	0	0	0	0
Average balances of performing TDRs	0	0	0	0
Average balances of impaired loans	$ 510	$ 0	$ 565	$ 0
Single Family, Multifamily and Commercial Real Estate | Stated Interest Rate Reduction and Delinquent Property Taxes
Financing Receivable, Modifications [Line Items]
Financing receivable, modifications, repayment period by borrower			1 year

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - LOANS BY CREDIT QUALITY INDICATOR (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 6,877,518	$ 6,402,459
As a percentage of total gross loans and leases	100.00%	100.00%
Mortgage
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 3,719,038	$ 3,678,520
Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,652,173	3,601,587
Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	66,865	76,933
Home equity
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,412	2,470
Home equity | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,412	2,470
Warehouse and other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	480,378	537,714
Warehouse and other | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	480,378	537,714
Multifamily real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,451,535	1,373,216
Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,360,791	1,271,170
Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	90,744	102,046
Commercial real estate secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	155,124	121,746
Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	142,911	109,370
Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	12,213	12,376
Auto and RV secured
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	107,430	73,676
Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	107,430	73,676
Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	134,349	98,275
Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	763,811	514,300
Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	63,441	2,542
Pass
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 6,815,961	$ 6,336,977
As a percentage of total gross loans and leases	99.10%	99.00%
Pass | Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 3,610,703	$ 3,563,430
Pass | Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	60,879	71,111
Pass | Home equity | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,363	2,420
Pass | Warehouse and other | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	479,383	534,868
Pass | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,353,379	1,262,384
Pass | Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	88,392	96,792
Pass | Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	142,911	109,370
Pass | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	9,992	10,110
Pass | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	107,077	73,192
Pass | Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	134,349	98,275
Pass | Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	763,537	513,310
Pass | Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	62,996	1,715
Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 24,620	$ 23,551
As a percentage of total gross loans and leases	0.40%	0.40%
Special Mention | Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 18,656	$ 10,938
Special Mention | Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	353	0
Special Mention | Home equity | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	17
Special Mention | Warehouse and other | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	2,846
Special Mention | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	3,248	4,721
Special Mention | Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	2,769
Special Mention | Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Special Mention | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	1,989	2,012
Special Mention | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	100	97
Special Mention | Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Special Mention | Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	274	0
Special Mention | Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	151
Substandard
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 36,937	$ 41,931
As a percentage of total gross loans and leases	0.50%	0.60%
Substandard | Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 22,814	$ 27,219
Substandard | Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	5,633	5,822
Substandard | Home equity | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	49	33
Substandard | Warehouse and other | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	995	0
Substandard | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	4,164	4,065
Substandard | Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	2,352	2,485
Substandard | Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Substandard | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	232	254
Substandard | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	253	387
Substandard | Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Substandard | Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	990
Substandard | Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	445	676
Doubtful
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 0	$ 0
As a percentage of total gross loans and leases	0.00%	0.00%
Doubtful | Mortgage | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 0	$ 0
Doubtful | Mortgage | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Home equity | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Warehouse and other | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Multifamily real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Commercial real estate secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Factoring
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Commercial and Industrial
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	0	0
Doubtful | Other
Financing Receivable, Recorded Investment [Line Items]
Total gross loans and leases	$ 0	$ 0

XML

LOANS, LEASES & ALLOWANCE FOR LOANS AND LEASE LOSSES - PAST DUE LOANS (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Jun. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 42,496	$ 38,046
As a % of total gross loans and leases	0.62%	0.59%
Mortgage | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 32,666	$ 28,780
Mortgage | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	3,670	3,110
Home equity | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	45	46
Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	4,740	4,385
Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	232	254
Auto and RV secured
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	698
Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		440
Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		142
Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	445	889
30-59 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 6,380	$ 9,762
As a % of total gross loans and leases	0.10%	0.15%
30-59 Days Past Due | Mortgage | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 4,523	$ 5,192
30-59 Days Past Due | Mortgage | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	804	572
30-59 Days Past Due | Home equity | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	0
30-59 Days Past Due | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	576	3,594
30-59 Days Past Due | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	0
30-59 Days Past Due | Auto and RV secured
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	477
30-59 Days Past Due | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		200
30-59 Days Past Due | Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		142
30-59 Days Past Due | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	62
60-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 5,660	$ 2,170
As a % of total gross loans and leases	0.08%	0.03%
60-89 Days Past Due | Mortgage | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 5,356	$ 1,866
60-89 Days Past Due | Mortgage | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	165	0
60-89 Days Past Due | Home equity | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	17
60-89 Days Past Due | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	0
60-89 Days Past Due | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	0
60-89 Days Past Due | Auto and RV secured
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	139
60-89 Days Past Due | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		136
60-89 Days Past Due | Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		0
60-89 Days Past Due | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	0	151
90 Plus Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 30,456	$ 26,114
As a % of total gross loans and leases	0.44%	0.41%
90 Plus Days Past Due | Mortgage | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 22,787	$ 21,722
90 Plus Days Past Due | Mortgage | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	2,701	2,538
90 Plus Days Past Due | Home equity | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	45	29
90 Plus Days Past Due | Multifamily real estate secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	4,164	791
90 Plus Days Past Due | Commercial real estate secured | Purchased
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	232	254
90 Plus Days Past Due | Auto and RV secured
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	82
90 Plus Days Past Due | Auto and RV secured | In-house originated
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		104
90 Plus Days Past Due | Commercial and Industrial
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total		0
90 Plus Days Past Due | Other
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total	$ 445	$ 676

XML

SUBORNIDATED NOTES AND DEBENTURES (Details) - USD ($)		1 Months Ended
	Dec. 13, 2004	Mar. 31, 2016	Dec. 31, 2016
Debt Instrument [Line Items]
Subordinated notes issues		$ 51,000,000
Interest rate per annum (as a percentage)		6.25%
Proceeds from issuance of subordinated notes and debentures and other		$ 51,000,000
Debt issuance costs and discount (as a percentage)		3.15%
Trust preferred securities	$ 5,000,000
Junior Subordinated Debt
Debt Instrument [Line Items]
Junior subordinated debenture	$ 5,155,000
Variable rate basis	P3M
Basis spread on variable rate (as a percentage)	2.40%
Effective rate (as a percentage)			3.31983%

XML

EQUITY AND STOCK-BASED COMPENSATION - NARRATIVE (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2016 USD ($) stock_incentive_plan shares	Dec. 31, 2015 USD ($)	Dec. 31, 2016 USD ($) stock_incentive_plan shares	Dec. 31, 2015 USD ($) shares	Jun. 30, 2016 shares	Mar. 17, 2016 USD ($)
Stock Award Compensation Expense
Stock repurchase program, maximum amount authorized						$ 100,000,000
Stock Options
Stock Award Compensation Expense
Stock options outstanding (in shares) | shares	0		0		0
Restricted Stock and Restricted Stock Units
Stock Award Compensation Expense
Unrecognized compensation expense	$ 29,216,000		$ 29,216,000
Share-based compensation expense	3,413,000	$ 2,858,000	6,450,000	$ 5,116,000
Tax benefit from stock-based compensation	1,432,000	1,201,000	$ 2,705,000	$ 2,137,000
Restricted Stock and Restricted Stock Units | Employees and Directors
Stock Award Compensation Expense
Restricted stock grants (in shares) | shares			804,518	614,721
Restricted Stock Units (RSUs)
Stock Award Compensation Expense
Vesting period for options granted			3 years
Restricted stock grants (in shares) | shares			804,518		615,834
Total fair value of shares vested in the period	$ 2,293,000	$ 1,655,000	$ 5,289,000	$ 7,147,000
Restricted Stock Units (RSUs) | Employees and Directors | Anniversary 1
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			33.33%
Restricted Stock Units (RSUs) | Employees and Directors | Anniversary 2
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			33.33%
Restricted Stock Units (RSUs) | Employees and Directors | Anniversary 3
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			33.33%
Restricted Stock Units (RSUs) | CEO | Anniversary 1
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			25.00%
Restricted Stock Units (RSUs) | CEO | Anniversary 2
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			25.00%
Restricted Stock Units (RSUs) | CEO | Anniversary 3
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			25.00%
Restricted Stock Units (RSUs) | CEO | Anniversary 4
Stock Award Compensation Expense
Restricted stock grants, vesting percentage			25.00%
Plans
Stock Award Compensation Expense
Number of stock incentive plans | stock_incentive_plan	2		2
Contractual term for options granted under plan			10 years
Plans | Minimum
Stock Award Compensation Expense
Vesting period for options granted			3 years
Plans | Maximum
Stock Award Compensation Expense
Vesting period for options granted			5 years
2014 Stock Incentive Plan | Stock Options
Stock Award Compensation Expense
Share reserved for issuance (in shares) | shares	3,680,000		3,680,000

XML

EQUITY AND STOCK-BASED COMPENSATION - UNRECOGNIZED COMPENSATION EXPENSE RELATED TO NON-VESTED AWARDS (Details) - Restricted Stock and Restricted Stock Units $ in Thousands	Dec. 31, 2016 USD ($)
Stock Award Compensation Expense
For the remainder of 2017	$ 7,291
2018	11,905
2019	7,692
2020	2,328
Unrecognized compensation expense, total	$ 29,216

XML

EQUITY AND STOCK-BASED COMPENSATION - CHANGES IN RESTRICTED STOCK UNIT GRANTS (Details) - Restricted Stock Units (RSUs) - $ / shares	6 Months Ended	12 Months Ended
	Dec. 31, 2016	Jun. 30, 2016
Restricted Stock Unit Shares
Non-vested balance, beginning, Shares	1,059,726	1,135,088
Granted, Shares	804,518	615,834
Vested, Shares	(247,875)	(536,528)
Canceled, Shares	(45,566)	(154,668)
Non-vested balance, ending, Shares	1,570,803	1,059,726
Weighted-Average Grant-Date Fair Value
Non-vested balance, beginning, Weighted Average Grant Date Fair Value (in dollars per share)	$ 22.53	$ 17.01
Granted, Weighted Average Grant Date Fair Value (in dollars per share)	20.80	26.60
Vested, Weighted Average Grant Date Fair Value (in dollars per share)	20.29	16.14
Canceled, Weighted Average Grant Date Fair Value (in dollars per share)	19.11	18.70
Non-vested balance, ending, Weighted Average Grant Date Fair Value (in dollars per share)	$ 22.10	$ 22.53

XML

EARNINGS PER SHARE ("EPS") (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share [Abstract]
Net income	$ 32,300	$ 28,149	$ 61,197	$ 53,650
Preferred stock dividends	(78)	(78)	(155)	(155)
Net income attributable to common shareholders	$ 32,222	$ 28,071	$ 61,042	$ 53,495
Average common shares issued and outstanding	63,341,437	62,999,335	63,312,805	62,741,596
Average unvested RSU shares	1,520,103	1,431,998	1,412,167	1,309,243
Total qualifying shares	64,861,540	64,431,333	64,724,972	64,050,839
Basic earnings per share (in dollars per share)	$ 0.50	$ 0.44	$ 0.94	$ 0.84
Diluted Earnings Per Common Share
Net income attributable to common shareholders	$ 32,222	$ 28,071	$ 61,042	$ 53,495
Dilutive net income attributable to common shareholders	$ 32,222	$ 28,071	$ 61,042	$ 53,495
Average common shares issued and outstanding	64,861,540	64,431,333	64,724,972	64,050,839
Dilutive effect of stock options (in shares)	0	1,323	0	10,982
Total dilutive common shares issued and outstanding	64,861,540	64,432,656	64,724,972	64,061,821
Diluted earnings per share (in dollars per share)	$ 0.50	$ 0.44	$ 0.94	$ 0.84

XML

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	6 Months Ended
	Dec. 31, 2016 USD ($)	Jun. 09, 2016 claim	Feb. 02, 2016 claim	Dec. 31, 2015 claim
Shareholder Derivative Actions
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Loss contingency, number of pending claims | claim			5	2
Loss contingency, number of consolidated pending claims | claim		4
Loan Origination Commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, loan origination commitment	$ 604,783
Loan Origination Commitments | Sales commitment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, commitment	77,932
Loan Origination Commitments | Fixed Interest Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, loan origination commitment	$ 66,298
Fixed interest rate minimum on commitments to extend credit	2.50%
Fixed interest rate maximum on commitments to extend credit	5.59%
Loan Origination Commitments | Fixed Interest Rate | Sales commitment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, commitment	$ 74,494
Loan Origination Commitments | Variable Interest Rate
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, loan origination commitment	538,485
Loan Origination Commitments | Variable Interest Rate | Sales commitment
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Off-balance sheet, commitment	$ 3,438

XML

RELATED PARTY TRANSACTIONS (Details) - loan	6 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Related Party Transactions [Abstract]
Number of related party loans granted	0	0
Number of related party loans refinanced	0	0
Number of related party loans modified	1

XML

Label	Element	Value
Municipal Bonds [Member]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	$ 35,896,000
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Fair Value	us-gaap_HeldToMaturitySecuritiesFairValue	41,506,000
Held-to-maturity Securities, Fair Value	us-gaap_HeldToMaturitySecuritiesFairValue	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	5,610,000
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	0
Non-Agency Securities [Member]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	0
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Fair Value	us-gaap_HeldToMaturitySecuritiesFairValue	0
Held-to-maturity Securities, Fair Value	us-gaap_HeldToMaturitySecuritiesFairValue	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	0
Agency, Residential Mortgage Backed Securities [Member]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	35,067,000	[1]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	0	[1]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	1,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	1,000	[1]
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0	[1]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	129,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	843,000	[1]
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	0	[1]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	129,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	1,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	0
Non-Agency, Residential Mortgage Backed Securities [Member]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	128,211,000	[2]
Held-to-maturity Securities	us-gaap_HeldToMaturitySecurities	0	[2]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	419,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThan12MonthsAccumulatedLoss	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	10,044,000	[2]
Held-to-maturity Securities, Accumulated Unrecognized Holding Loss	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingLoss	0	[2]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	68,383,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionFairValue	0
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	7,095,000	[2]
Held-to-maturity Securities, Accumulated Unrecognized Holding Gain	us-gaap_HeldToMaturitySecuritiesAccumulatedUnrecognizedHoldingGain	0	[2]
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	15,011,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionLessThanTwelveMonthsFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	53,372,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionTwelveMonthsOrLongerFairValue	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	9,625,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPosition12MonthsOrLongerAccumulatedLoss	0
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	10,044,000
Held-to-maturity Securities, Continuous Unrealized Loss Position, Accumulated Loss	us-gaap_HeldToMaturitySecuritiesContinuousUnrealizedLossPositionAccumulatedLoss	$ 0

[1] U.S. government-backed or government sponsored enterprises including Fannie Mae, Freddie Mac and Ginnie Mae.

[2] Private sponsors of securities collateralized primarily by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by prime, Alt-A or pay-option ARM mortgages.