XML 47 R29.htm IDEA: XBRL DOCUMENT v3.25.3
FAIR VALUES OF FINANCIAL INSTRUMENTS
 12 Months Ended
Sep. 30, 2025
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, 2025 or 2024.
 
Debt Securities AFS and HTM. Debt securities AFS are recorded at fair value on a recurring basis and debt securities HTM are carried at amortized cost.
 
The fair value of debt securities AFS, 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).

Derivatives. The Bank's use of derivatives is limited to the Consumer Lending Programs. Under these Programs, the Bank has an agreement with a third party to originate consumer loans that are included in the Bank's held for investment or held for sale portfolios. The third party provides a target return to the Company on the portfolio of loans retained by the Bank and all interest received from borrowers on such loans above the target return and after all charge-offs have been covered is paid to the third party as excess interest and servicing. The primary drivers of the derivative value include the Company's ability to settle the loans at par value and the third party partners' rights of first refusal to purchase loans that the Company intends to sell. The Company estimates the fair value of the derivative instrument using a market approach considering primarily the average interest rate on the underlying loans and the credit spread relative to the risk-free rate in order to validate that the value of the loans is in excess of par and thus the derivative could be settled by either party at no cost. The Company considers this derivative instrument to be within Level 3 of the fair value hierarchy, as it utilizes inputs from sales or securitization transactions involving similar loans. As of September 30, 2025 and September 30, 2024, the Company determined the derivatives had no fair value, respectively, thus eliminating the need for further disclosures regarding Level 3 inputs as outlined in ASC 820.
The following table summarizes the fair values of debt securities AFS and equity securities as they are measured at fair value on a recurring basis.

(Dollars in thousands)TotalLevel 1Level 2Level 3
September 30, 2025
Debt securities AFS
Corporate securities$21,250 $— $21,250 — 
SBA securities10,769 — 10,769 — 
Obligations of states and political subdivisions162 — 162 — 
Non-bank qualified obligations of states and political subdivisions187,040 — 187,040 — 
Asset-backed securities136,372 — 136,372 — 
Mortgage-backed securities972,250 — 972,250 — 
Total debt securities AFS$1,327,843 $— $1,327,843 $— 
Common equities and mutual funds(1)
$3,787 $3,787 $— $— 
Non-marketable equity securities(2)
$13,237 $— $— $— 
September 30, 2024
Debt securities AFS
Corporate securities$19,750 $— $19,750 $— 
SBA securities81,935 — 81,935 — 
Obligations of states and political subdivisions480 — 480 — 
Non-bank qualified obligations of states and political subdivisions217,990 — 217,990 — 
Asset-backed securities189,698 — 189,698 — 
Mortgage-backed securities1,231,368 — 1,231,368 — 
Total debt securities AFS$1,741,221 $— $1,741,221 $— 
Common equities and mutual funds(1)
$3,303 $3,303 $— $— 
Non-marketable equity securities(2)
$11,828 $— $— $— 
(1) Equity securities at fair value are included within other assets on the Consolidated Statements of Financial Condition at September 30, 2025 and September 30, 2024.
(2) Consists of certain non-marketable equity securities that are measured at fair value using NAV 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 of the underlying collateral, the Company measures fair value on a nonrecurring basis. 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 3% to 31%.
 
The following table summarizes the assets of the Company that are measured at fair value in the Consolidated Statements of Financial Condition on a nonrecurring basis:

(Dollars in thousands)TotalLevel 1Level 2Level 3
September 30, 2025
Loans and leases, net individually evaluated for credit loss
Commercial finance$32,321 $— $— $32,321 
    Total loans and leases, net individually evaluated
    for credit loss		32,321 — — 32,321 
Total$32,321 $— $— $32,321 
September 30, 2024
Loans and leases, net individually evaluated for credit loss
Commercial finance$7,652 $— $— $7,652 
    Total loans and leases, net individually evaluated
    for credit loss		7,652 — — 7,652 
Total$7,652 $— $— $7,652 

Quantitative Information About Level 3 Fair Value Measurements
(Dollars in thousands)Fair Value at September 30, 2025Fair Value at September 30, 2024Valuation
Technique		Unobservable InputRange of Inputs
Loans and leases, net individually evaluated for credit loss$32,321 7,652 Market approach
Appraised values(1)
3% - 31%
(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 3% to 31%.

Management discloses the estimated fair value of 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 value estimates were made at September 30, 2025 and 2024 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:

 September 30, 2025
(Dollars in thousands)Carrying
Amount		Estimated
Fair Value		Level 1Level 2Level 3
Financial assets
Cash and cash equivalents$120,568 $120,568 $120,568 $— $— 
Debt securities available for sale1,327,843 1,327,843 — 1,327,843 — 
Debt securities held to maturity29,308 25,653 — 25,653 — 
Common equities and mutual funds(1)
3,787 3,787 3,787 — — 
Non-marketable equity securities(1)(2)
19,937 19,937 — 6,699 — 
Loans held for sale179,421 179,421 — 179,421 — 
Loans and leases4,665,006 4,599,269 — — 4,599,269 
Federal Reserve Bank and Federal Home Loan Bank stocks24,708 24,708 — 24,708 — 
Accrued interest receivable38,520 38,520 38,520 — — 
Financial liabilities
Deposits5,886,947 5,886,914 5,884,311 2,604 — 
Overnight federal funds purchased9,000 9,000 9,000 — — 
Other short- and long-term borrowings33,456 33,667 — 33,667 — 
Accrued interest payable188 188 188 — — 
(1) Equity securities at fair value are included within other assets on the Consolidated Statement of Financial Condition at September 30, 2025.
(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.

 September 30, 2024
(Dollars in thousands)Carrying
Amount		Estimated
Fair Value		Level 1Level 2Level 3
Financial assets
Cash and cash equivalents$158,337 $158,337 $158,337 $— $— 
Debt securities available for sale1,741,221 1,741,221 — 1,741,221 — 
Debt securities held to maturity33,092 30,236 — 30,236 — 
Common equities and mutual funds(1)
3,303 3,303 3,303 — — 
Non-marketable equity securities(1)(2)
21,350 21,350 — 9,522 — 
Loans held for sale691,688 691,688 — 691,688 — 
Loans and leases4,071,071 4,036,490 — — 4,036,490 
Federal Reserve Bank and Federal Home Loan Bank stocks36,014 36,014 — 36,014 — 
Accrued interest receivable31,385 31,385 31,385 — — 
Financial liabilities
Deposits5,875,085 5,874,994 5,845,879 29,115 — 
Overnight federal funds purchased377,000 377,000 377,000 — — 
Other short- and long-term borrowings33,354 31,787 — 31,787 — 
Accrued interest payable571 571 571 — — 
(1) Equity securities at fair value are included within other assets on the Consolidated Statement of Financial Condition at September 30, 2024.
(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, 2025 and 2024.
 
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 2 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
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.