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FAIR VALUE
 3 Months Ended
Sep. 30, 2023
Fair Value Disclosures [Abstract]  
FAIR VALUE FAIR VALUE
The following tables sets forth the Company’s financial assets and liabilities measured at fair value on a recurring basis at September 30, 2023 and June 30, 2023. Assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement:
September 30, 2023
(Dollars in thousands)Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
ASSETS:
Securities—Trading
$640 $— $640 
Securities—Available-for-sale:
Agency MBS1
27,624 — 27,624 
Non-Agency MBS2
— 206,076 206,076 
Municipal3,026 — 3,026 
Total—Securities—Available-for-sale$30,650 $206,076 $236,726 
Loans held for sale$8,014 $— $8,014 
Servicing rights
$— $29,338 $29,338 
Other assets—Derivative instruments$1,295 $— $1,295 
LIABILITIES:
Accrued expense and other liabilities—Derivative instruments$934 $— $934 

June 30, 2023
(Dollars in thousands)Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Total
ASSETS:
Securities—Trading
$758 $— $758 
Securities—Available-for-sale:
Agency MBS1
23,947 — 23,947 
Non-Agency MBS2
— 205,005 205,005 
Municipal3,398 — 3,398 
Total—Securities—Available-for-sale$27,345 $205,005 $232,350 
Loans held for sale$23,203 $— $23,203 
Servicing rights
$— $25,443 $25,443 
Other assets—Derivative instruments$919 $— $919 
LIABILITIES:
Accrued expense and other liabilities—Derivative instruments$691 $— $691 
1 Includes securities guaranteed by Ginnie Mae, a U.S. government agency, and the government sponsored enterprises Fannie Mae and Freddie Mac.
2 Private sponsors of securities collateralized primarily by first-lien mortgage loans on commercial properties or by pools of 1-4 family residential first mortgages. Primarily super senior securities secured by Alt-A or pay-option adjustable rate mortgages (“ARMs”).
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
September 30, 2023
(Dollars in thousands)Securities – Available-for-Sale: Non-Agency RMBS
Servicing Rights1
Total
Opening Balance$205,005 $25,443 $230,448 
Total gains or losses for the period:
Included in earnings—Mortgage banking and servicing rights income
— 1,858 1,858 
Included in other comprehensive income1,316 — 1,316 
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions— 2,037 2,037 
Settlements(245)— (245)
Closing balance$206,076 $29,338 $235,414 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period$— $1,858 $1,858 
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.2 million for the three months ended September 30, 2023 and an increase in servicing rights value resulting from market-driven changes in interest rates of $2.1 million for the three months ended September 30, 2023. Additions to servicing rights were related to purchases and servicing rights retained upon sale of loans held for sale.

For the Three Months Ended
September 30, 2022
(Dollars in thousands)Securities – Available-for-Sale: Non-Agency RMBS
Servicing Rights1
Derivative Instruments, netTotal
Opening Balance$186,814 $25,213 $464 $212,491 
Total gains or losses for the period:
Included in earnings—Mortgage banking and servicing rights income
— 953 71 1,024 
Included in other comprehensive income(2,473)— — (2,473)
Purchases, retentions, issues, sales and settlements:
Purchases/Retentions— 207 — 207 
Settlements(329)— — (329)
Closing balance$184,012 $26,373 $535 $210,920 
Change in unrealized gains or losses for the period included in earnings for assets held at the end of the reporting period$— $953 $71 $1,024 
1 Earnings from servicing rights were attributable to: time and payoffs, representing a decrease in servicing rights value due to passage of time, including the impact from both regularly scheduled loan principal payments and loans that were paid down or paid off during the period of $0.4 million for the three months ended September 30, 2022 and an increase in servicing rights value resulting from market-driven changes in interest rates of $1.4 million for the three months ended September 30, 2022. Additions to servicing rights were retained upon sale of loans held for sale.
The table below summarizes the quantitative information about Level 3 fair value measurements as of the dates indicated:
September 30, 2023
(Dollars in thousands)Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
Securities – Non-agency MBS$206,076 Discounted Cash Flow
Projected Constant Prepayment Rate,
Projected Constant Default Rate,
Projected Loss Severity,
Discount Rate over SOFR Swaps
0.0 to 58.1% (34.9%)
0.0 to 7.6% (2.4%)
0.0 to 68.7% (28.5%)
2.6 to 6.5% (2.6%)
Servicing Rights
$29,338 Discounted Cash FlowProjected Constant Prepayment Rate,
Life (in years),
Discount Rate
4.8 to 39.9% (13.0%)
1.7 to 15.8 (7.4)
9.5 to 11.5% (9.8%)
June 30, 2023
(Dollars in thousands)Fair ValueValuation TechniqueUnobservable InputRange (Weighted Average)
Securities – Non-agency MBS$205,005 Discounted Cash FlowProjected Constant Prepayment Rate,
Projected Constant Default Rate,
Projected Loss Severity,
Discount Rate over LIBOR
0.0 to 59.7% (32.0%)
0.0 to 7.5% (2.4%)
0.0 to 68.7% (28.5%)
2.6 to 7.5% (2.7%)
Servicing Rights
$25,443 Discounted Cash FlowProjected Constant Prepayment Rate,
Life (in years),
Discount Rate
6.1 to 40.1% (12.6%)
1.8 to 10.9 (7.7)
9.5 to 11.5% (9.6%)
For mortgage-backed securities, 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 projected loss severity and a directionally opposite change in the assumption used for projected prepayment rates. For servicing rights, significant increases in projected prepayment rates or discount rates in isolation would result in a significantly lower fair value measurement, while a significant increase in expected life in isolation would result in a significantly higher fair value measurement. Generally, a change in the projected prepayment rates is accompanied by a directionally opposite change in expected life.
The aggregate fair value of loans held for sale, carried at fair value, contractual balance (including accrued interest), and unrealized gain were:
(Dollars in thousands)September 30, 2023June 30, 2023
Aggregate fair value$8,014 $23,203 
Contractual balance7,878 22,844 
Unrealized gain$136 $359 
The total interest income and amount of gains and losses from changes in fair value included in earnings for loans held for sale were:
For the Three Months Ended
September 30,
(Dollars in thousands)20232022
Interest income$189 $50 
Change in fair value(129)91 
Total $60 $141 
The table below summarizes assets measured for impairment on a non-recurring basis:
September 30, 2023
(Dollars in thousands)Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Balance
Other real estate owned and repossessed vehicles:
Single family real estate$— $— $5,574 $5,574 
Multifamily real estate— — 1,392 1,392 
Autos$— $— $1,813 $1,813 
Total$— $— $8,779 $8,779 
June 30, 2023
(Dollars in thousands)Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Balance
Other real estate owned and repossessed vehicles:
Single family real estate$— $— $5,574 $5,574 
Multifamily real estate— — 1,392 1,392 
Autos— — 1,133 1,133 
Total$— $— $8,099 $8,099 
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 $8.8 million at September 30, 2023, after write-downs of $0.4 million, and a net carrying amount of $8.1 million at June 30, 2023, after write-downs of $1.7 million.
The following table presents quantitative information about Level 3 fair value measurements for other real estate owned and repossessed vehicles measured at fair value on a non-recurring basis at the periods indicated:
September 30, 2023
(Dollars in thousands)Fair ValueValuation TechniqueUnobservable Input
Range (Weighted Average) 1
Other real estate owned and repossessed vehicles2:
Single family real estate$5,574 Sales comparison approach
Differences between the comparable sales
62.1 to 93.6% (62.1%)
Multifamily real estate$1,392 Sales comparison approach and income approach
Differences between the comparable sales and differences in net operating income expectations, capitalization rate
49.8% to 54.5% (49.8%)
June 30, 2023
(Dollars in thousands)Fair ValueValuation TechniqueUnobservable Input
Range (Weighted Average) 1
Other real estate owned and repossessed vehicles2:
Single family real estate$5,574 Sales comparison approach
Differences between the comparable sales
62.1 to 93.6% (62.1%)
Multifamily real estate$1,392 
Sales comparison approach and income approach
Differences between the comparable sales and differences in net operating income expectations, capitalization rate
49.8 to 54.5%% (49.8%)
1 For other real estate owned and repossessed vehicles 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 asset being valued having limited comparable sales with similar characteristics at the time the current appraisal is conducted.
2 Repossessed vehicles are valued using third-party pricing information of comparable vehicle sales without adjustment.
Fair Value of Financial Instruments
Carrying amounts and estimated fair values of financial instruments at September 30, 2023 and June 30, 2023 were:
September 30, 2023
Fair Value
(Dollars in thousands)Carrying
Amount		Level 1Level 2Level 3Total Fair Value
Financial assets:
Cash and cash equivalents$2,413,769 $2,413,769 $— $— $2,413,769 
Securities—trading640 — 640 — 640 
Securities—available-for-sale236,726 — 30,650 206,076 236,726 
Stock of regulatory agencies21,533 — 21,533 — 21,533 
Loans held for sale, at fair value8,014 — 8,014 — 8,014 
Loans held for investment—net16,955,041 — — 16,935,835 16,935,835 
Securities borrowed96,424 — — 102,084 102,084 
Customer, broker-dealer and clearing receivables285,423 — — 294,499 294,499 
Servicing rights
29,338 — — 29,338 29,338 
Other assets - derivative instruments1,295 — 1,295 — 1,295 
Financial liabilities:
Total deposits17,565,741 — 17,481,019 — 17,481,019 
Advances from the Federal Home Loan Bank90,000 — 82,234 — 82,234 
Borrowings, subordinated notes and debentures447,733 — 414,462 — 414,462 
Securities loaned116,446 — — 116,097 116,097 
Customer, broker-dealer and clearing payables341,915 — — 341,915 341,915 
Accrued expense and other liabilities - derivative instruments934 — 934 — 934 
June 30, 2023
Fair Value
(Dollars in thousands)Carrying
Amount		Level 1Level 2Level 3Total Fair Value
Financial assets:
Cash and cash equivalents$2,382,086 $2,382,086 $— $— $2,382,086 
Securities—trading758 — 758 — 758 
Securities—available-for-sale232,350 — 27,345 205,005 232,350 
Stock of regulatory agencies
21,510 — 21,510 — 21,510 
Loans held for sale, at fair value23,203 — 23,203 — 23,203 
Loans held for sale, at lower of cost or fair value776 — — 780 780 
Loans held for investment—net16,456,728 — — 16,417,183 16,417,183 
Securities borrowed134,339 — — 143,461 143,461 
Customer, broker-dealer and clearing receivables374,074 — — 386,082 386,082 
Servicing rights
25,443 — — 25,443 25,443 
Other assets - derivative instruments919 — 919 — 919 
Financial liabilities:
Total deposits17,123,108 — 17,064,084 — 17,064,084 
Advances from the Federal Home Loan Bank90,000 — 83,192 — 83,192 
Borrowings, subordinated notes and debentures361,779 — 327,564 — 327,564 
Securities loaned159,832 — — 159,416 159,416 
Customer, broker-dealer and clearing payables445,477 — — 445,447 445,447 
Accrued expense and other liabilities - derivative instruments691 — 691 — 691 
Carrying amount is the estimated fair value for cash and cash equivalents, stock of regulatory agencies, 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, loans held for sale and derivatives can be found in Note 3—“Fair Value” of the 2023 Form 10-K. The fair value of off-balance sheet items is not material.