XML 43 R29.htm IDEA: XBRL DOCUMENT
v3.22.2.2

FAIR VALUES OF FINANCIAL INSTRUMENTS | 12 Months Ended
--- | ---
Sep. 30, 2022
Fair Value Disclosures [Abstract] |
FAIR VALUES OF FINANCIAL INSTRUMENTS | FAIR VALUES OF FINANCIAL INSTRUMENTS ASC 820, Fair Value Measurements defines fair value, establishes a framework for measuring the fair value of assets and liabilities using a hierarchy system and requires disclosures about fair value measurement. It clarifies that fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the market in which the reporting entity transacts. The fair value hierarchy is as follows: Level 1 Inputs - Valuation is based upon quoted prices for identical instruments traded in active markets that the Company has the ability to access at measurement date. Level 2 Inputs - Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which significant assumptions are observable in the market. Level 3 Inputs - Valuation is generated from model-based techniques that use significant assumptions not observable in the market and are used only to the extent that observable inputs are not available. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. There were no transfers between levels of the fair value hierarchy for the fiscal years ended September 30, 2022 or 2021. Debt Securities Available for Sale and Held to Maturity. Debt securities available for sale are recorded at fair value on a recurring basis and debt securities held to maturity are carried at amortized cost. The fair values of debt securities available for sale, categorized primarily as Level 2, is recorded using prices obtained from independent asset pricing services that are based on observable transactions, but not quoted markets. Management reviews the prices obtained from independent asset pricing services for unusual fluctuations and compares to current market trading activity. Equity Securities. Marketable equity securities and certain non-marketable equity securities are recorded at fair value on a recurring basis. The fair values of marketable equity securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs). The following table summarizes the fair values of debt securities available for sale and equity securities as they are measured at fair value on a recurring basis.
| Fair Value At September 30, 2022
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3
Debt securities AFS |  |  |  |
Corporate securities | $ | 97,768 |  | $ | — |  | $ | 97,768 |  | — |
SBA securities | 2,344 |  | — |  | 2,344 |  | — |
Obligations of states and political subdivisions | 263,783 |  | — |  | 263,783 |  | — |
Non-bank qualified obligations of states and political subdivisions | 147,790 |  | — |  | 147,790 |  | — |
Asset-backed securities | 1,348,997 |  | — |  | 1,348,997 |  | — |
Mortgage-backed securities | 22,187 |  | — |  | 22,187 |  | — |
Total debt securities AFS | $ | 1,882,869 |  | $ | — |  | $ | 1,882,869 |  | $ | — |
Common equities and mutual funds(1) | $ | 2,874 |  | $ | 2,874 |  | $ | — |  | $ | — |
Non-marketable equity securities(2) | $ | 7,212 |  | $ | — |  | $ | — |  | $ | — |
(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2022. (2) Consists of certain non-marketable equity securities that are measured at fair value using net asset value ("NAV") per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.
| Fair Value At September 30, 2021
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3
Debt securities AFS |  |  |  |
Corporate securities | $ | 25,000 |  | $ | — |  | $ | 25,000 |  | $ | — |
SBA securities | 157,209 |  | — |  | 157,209 |  | — |
Obligations of states and political subdivisions | 2,507 |  | — |  | 2,507 |  | — |
Non-bank qualified obligations of states and political subdivisions | 268,295 |  | — |  | 268,295 |  | — |
Asset-backed securities | 394,859 |  | — |  | 394,859 |  | — |
Mortgage-backed securities | 1,017,029 |  | — |  | 1,017,029 |  | — |
Total debt securities AFS | $ | 1,864,899 |  | $ | — |  | $ | 1,864,899 |  | $ | — |
Common equities and mutual funds(1) | $ | 12,668 |  | $ | 12,668 |  | $ | — |  | $ | — |
Non-marketable equity securities(2) | $ | 4,560 |  | $ | — |  | $ | — |  | $ | — |
(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2021. (2) Consists of certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy. Loans and Leases. The Company does not record loans and leases at fair value on a recurring basis. However, if a loan or lease is individually evaluated for risk of credit loss and repayment is expected to be solely provided by the values underlying collateral, the Company measures fair value on a nonrecurring bases. Fair value is determined by the fair value of the underlying collateral less estimated costs to sell. The fair value of the collateral is determined based on the internal estimates and/or assessment provided by third-party appraisers and the valuation relies on discount rates ranging from 4% to 35%. The following table summarizes the assets of the Company that are measured at fair value in the Consolidated Statements of Financial Condition on a non-recurring basis:
| Fair Value At September 30, 2022
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3
Loans and leases, net individually evaluated for credit loss |  |  |  |
Commercial finance | $ | 1,575 |  | $ | — |  | $ | — |  | $ | 1,575 |
Total loans and leases, net individually evaluated for credit loss | 1,575 |  | — |  | — |  | 1,575 |
Foreclosed assets, net | 1 |  | — |  | — |  | 1 |
Total | $ | 1,576 |  | $ | — |  | $ | — |  | $ | 1,576 |
| Fair Value At September 30, 2021
(Dollars in thousands) | Total | Level 1 | Level 2 | Level 3
Impaired loans and leases, net |  |  |  |
Commercial finance | $ | 3,404 |  | $ | — |  | $ | — |  | $ | 3,404 |
Community banking | 9,371 |  | — |  | — |  | 9,371 |
Total impaired loans and leases, net | 12,775 |  | — |  | — |  | 12,775 |
Foreclosed assets, net | 2,077 |  | — |  | — |  | 2,077 |
Total | $ | 14,852 |  | $ | — |  | $ | — |  | $ | 14,852 |
| Quantitative Information About Level 3 Fair Value Measurements
(Dollars in thousands) | Fair Value at September 30, 2022 |  | Fair Value at September 30, 2021 |  | Valuation Technique |  | Unobservable Input |  | Range of Inputs
Loans and leases, net individually evaluated for credit loss | $ | 1,575 |  |  | 12,775 |  |  | Market approach |  | Appraised values(1) |  | 15% - 59%
Foreclosed assets, net | $ | 1 |  |  | 2,077 |  |  | Market approach |  | Appraised values(1) |  | 9% - 20%
(1) The Company generally relies on external appraisers to develop this information. Management reduced the appraised value by estimated selling costs and other inputs in a range of 15% to 59%. Management discloses the estimated fair value amounts of its financial instruments, including assets and liabilities on and off the Consolidated Statements of Financial Condition, for which it is practicable to estimate fair value. These fair values estimates were made at September 30, 2022 and 2021 based on relevant market information and information about financial instruments. Fair value estimates are intended to represent the price at which an asset could be sold or a liability could be settled. However, since there is no active market for certain financial instruments of the Company, the estimates of fair value are subjective in nature, involve uncertainties, and include matters of significant judgment. Changes in assumptions as well as tax considerations could significantly affect the estimated values. Accordingly, the aggregate fair value estimates are not intended to represent the underlying value of the Company, on either a going concern or a liquidation basis. The following tables present the carrying amount and estimated fair value of the financial instruments held by the Company:
| At September 30, 2022
(Dollars in thousands) | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3
Financial assets |  |  |  |  |
Cash and cash equivalents | $ | 388,038 |  | $ | 388,038 |  | $ | 388,038 |  | $ | — |  | $ | — |
Debt securities available for sale | 1,882,869 |  | 1,882,869 |  | — |  | 1,882,869 |  | — |
Debt securities held to maturity | 41,682 |  | 38,171 |  | — |  | 38,171 |  | — |
Common equities and mutual funds(1) | 2,874 |  | 2,874 |  | 2,874 |  | — |  | — |
Non-marketable equity securities(1)(2) | 22,526 |  | 22,526 |  | — |  | 15,314 |  | — |
Loans held for sale | 21,071 |  | 21,071 |  | — |  | 21,071 |  | — |
Loans and leases | 3,529,280 |  | 3,525,803 |  | — |  | — |  | 3,525,803 |
Federal Reserve Bank and Federal Home Loan Bank stocks | 28,812 |  | 28,812 |  | — |  | 28,812 |  | — |
Accrued interest receivable | 17,979 |  | 17,979 |  | 17,979 |  | — |  | — |
Financial liabilities |  |  |  |  |
Deposits | 5,866,037 |  | 5,865,854 |  | 5,858,283 |  | 7,571 |  | — |
Other short- and long-term borrowings | 36,028 |  | 35,986 |  | — |  | 35,986 |  | — |
Accrued interest payable | 192 |  | 192 |  | 192 |  | — |  | — |
(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2022. (2) Includes certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy.
| At September 30, 2021
(Dollars in thousands) | Carrying Amount | Estimated Fair Value | Level 1 | Level 2 | Level 3
Financial assets |  |  |  |  |
Cash and cash equivalents | $ | 314,019 |  | $ | 314,019 |  | $ | 314,019 |  | $ | — |  | $ | — |
Debt securities available for sale | 1,864,899 |  | 1,864,899 |  | — |  | 1,864,899 |  | — |
Debt securities held to maturity | 56,669 |  | 56,391 |  | — |  | 56,391 |  | — |
Common equities and mutual funds(1) | 12,668 |  | 12,668 |  | 12,668 |  | — |  | — |
Non-marketable equity securities(1)(2) | 17,509 |  | 17,509 |  | — |  | 12,949 |  | — |
Loans held for sale | 56,194 |  | 56,194 |  | — |  | 56,194 |  | — |
Loans and leases | 3,607,815 |  | 3,616,646 |  | — |  | — |  | 3,616,646 |
Federal Reserve Bank and Federal Home Loan Bank stocks | 28,400 |  | 28,400 |  | — |  | 28,400 |  | — |
Accrued interest receivable | 16,254 |  | 16,254 |  | 16,254 |  | — |  | — |
Financial liabilities |  |  |  |  |
Deposits | 5,514,971 |  | 5,515,035 |  | 5,482,471 |  | 32,564 |  | — |
Other short- and long-term borrowings | 92,834 |  | 93,938 |  | — |  | 93,938 |  | — |
Accrued interest payable | 579 |  | 579 |  | 579 |  | — |  | — |
(1) Equity securities at fair value are included within other assets on the consolidated statement of financial condition at September 30, 2021. (2) Includes certain non-marketable equity securities that are measured at fair value using NAV per share (or its equivalent) as a practical expedient and are excluded from the fair value hierarchy. The following sets forth the methods and assumptions used in determining the fair value estimates for the Company’s financial instruments at September 30, 2022 and 2021. CASH AND CASH EQUIVALENTS The carrying amount of cash and short-term investments is assumed to approximate the fair value. DEBT SECURITIES AVAILABLE FOR SALE AND EQUITY SECURITIES Fair values for debt securities available for sale are based on quoted prices of similar securities on nationally recognized securities exchanges, or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities. Fair values for marketable equity securities are based on unadjusted quoted prices from active markets in which the security is traded. Non-marketable equity securities are measured at fair value using NAV per share (or its equivalent) as a practical expedient. LOANS HELD FOR SALE Loans held for sale are carried at the lower of amortized cost or fair value, where fair value reflects the amount a willing market participant would pay for the loan. The Company classifies SBA/USDA loans held for sale as Level 2 in the fair value hierarchy as there is an active secondary market in which these loans are exchanged. Consumer loans held for sale are classified as Level 3 in the fair value hierarchy as the price at which these loans are sold are dictated by terms of the Program Agreements with consumer lending partners. LOANS AND LEASES, NET The fair values of loans and leases were estimated using an exit price methodology. The exit price estimation of fair value is based on the present value of expected cash flows, which are based on the contractual terms of the loans, adjusted for prepayments and a discount rate based on the relative risk of the cash flows. Other considerations include the loan type, remaining life of the loan and credit risk. FEDERAL RESERVE BANK AND FEDERAL HOME LOAN BANK STOCKS The fair value of FRB and FHLB stock is assumed to approximate book value since the Company is only able to redeem this stock at par value. ACCRUED INTEREST RECEIVABLE The carrying amount of accrued interest receivable is assumed to approximate the fair value. DEPOSITS With the exception of time certificate deposits and wholesale deposits, the carrying values of deposits are assumed to approximate fair value since deposits are immediately withdrawable without penalty. The fair value of time certificate deposits and wholesale certificate of deposits are estimated using a discounted cash flows calculation that applies the FHLB Des Moines curve to aggregated expected maturities of time deposits. FEDERAL HOME LOAN BANK ADVANCES The fair value of such advances was estimated by discounting the expected future cash flows using current interest rates for advances with similar terms and remaining maturities. SUBORDINATED DEBENTURES AND OTHER BORROWINGS The fair value of these instruments was estimated by discounting the expected future cash flows using derived interest rates approximating market over the contractual maturity of such borrowings. ACCRUED INTEREST PAYABLE The carrying amount of accrued interest payable is assumed to approximate the fair value. LIMITATIONS Fair value estimates are made at a specific point in time and are based on relevant market information about the financial instrument. Additionally, fair value estimates are based on existing on- and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business, customer relationships and the value of assets and liabilities that are not considered financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time. Furthermore, since no market exists for certain of the Company’s financial instruments, fair value estimates may be based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with a high level of precision. Changes in assumptions as well as tax considerations could significantly affect the estimates. Accordingly, based on the limitations described above, the aggregate fair value estimates are not intended to represent the underlying value of the Company, on either a going concern or a liquidation basis.

X
- References No definition available. + Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI https://asc.fasb.org/extlink&oid=126976982&loc=d3e19207-110258 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration