
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
December 31, 2024
Held to Maturity
U.S. Treasury and U.S. government agency securities	$	79,391	$	—	$	(4,916)	$	74,475	$	—
Mortgage-backed securities ("MBS"):
U.S. government agencies	48,161		—		(2,324)		45,837		—
Private label residential	26,833		264		(1,422)		25,675		52
Municipal securities	1,223		9		—		1,232		—
Bank issued trust preferred securities	497		—		(7)		490		3
Total	$	156,105	$	273	$	(8,669)	$	147,709	$	55


December 31, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for Sale
U.S. Treasury and U.S. government agency securities	$	9,569	$	—	$	(25)	$	9,544
MBS: U.S. government agencies	68,513		55		(1,032)		67,536

Total	$	78,082	$	55	$	(1,057)	$	77,080


September 30, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value		Allowance for Credit Losses
Held to Maturity
U.S. Treasury and U.S. government agency securities	$	92,312	$	70	$	(4,197)	$	88,185	$	—
MBS:
U.S. government agencies	49,481		174		(1,378)		48,277		—
Private label residential	28,479		231		(980)		27,730		55
Municipal securities	1,330		8		—		1,338		$	—
Bank issued trust preferred securities	495		—		(18)		477		5
Total	$	172,097	$	483	$	(6,573)	$	166,007	$	60


September 30, 2024	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Available for Sale
U.S. Treasury and U.S. government agency securities	$	3,934	$	6	$	(1)	$	3,939
MBS: U.S. government agencies	68,297		545		(524)		68,318

Total	$	72,231	$	551	$	(525)	$	72,257


	Less Than 12 Months					12 Months or Longer					Total
	Estimated Fair Value		Gross Unrealized Losses		Quantity	Estimated Fair Value		Gross Unrealized Losses		Quantity	Estimated Fair Value		Gross Unrealized Losses
Held to maturity
U.S. Treasury and U.S. government agency securities	$	9,786	$	(9)	1	$	64,689	$	(4,907)	15	$	74,475	$	(4,916)
MBS:
U.S. government agencies	18,746		(237)		15	26,938		(2,087)		43	45,684		(2,324)
Private label residential	2,731		(12)		4	19,187		(1,410)		19	21,918		(1,422)

Bank issued trust preferred securities	—		—		—	490		(7)		1	490		(7)
Total	$	31,263	$	(258)	20	$	111,304	$	(8,411)	78	$	142,567	$	(8,669)

Available for sale
U.S. Treasury and U.S. government agency securities	$	7,557	$	(25)	5	$	—	$	—	—	$	7,557	$	(25)
MBS:
U.S. government agencies	22,027		(522)		7	24,959		(510)		22	46,986		(1,032)
Total	$	29,584	$	(547)	12	$	24,959	$	(510)	22	$	54,543	$	(1,057)


	Less Than 12 Months					12 Months or Longer					Total
	Estimated Fair Value		Gross Unrealized Losses		Quantity	Estimated Fair Value		Gross Unrealized Losses		Quantity	Estimated Fair Value		Gross Unrealized Losses
Held to maturity
U.S. Treasury and U.S. government agency securities	$	—	$	—	—	$	78,363	$	(4,197)	17	$	78,363	$	(4,197)
MBS:
U.S. government agencies	1		—		1	28,618		(1,378)		44	28,619		(1,378)
Private label residential	804		(6)		1	20,447		(974)		19	21,251		(980)

Bank issued trust preferred securities	—		—		—	477		(18)		1	477		(18)
Total	$	805	$	(6)	2	$	127,905	$	(6,567)	81	$	128,710	$	(6,573)

Available for sale
U.S. Treasury and U.S. government agency securities	$	1,962	$	(1)	1	$	—	$	—	—	$	1,962	$	(1)
MBS:
U.S. government agencies	11,368		(117)		4	25,751		(407)		23	37,119		(524)

Total	$	13,330	$	(118)	5	$	25,751	$	(407)	23	$	39,081	$	(525)

During the three months ended December 31, 2024, the Company recorded a $2,000 net realized loss on 13 held to maturity investment securities, all of which had been recognized previously as a credit loss. During the three months ended December 31, 2023, the Company recorded a $1,000 net realized loss on 13 held to maturity investment securities, all of which had been recognized previously as credit loss.

The recorded amount of investment securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $193.62 million and $208.81 million at December 31, 2024 and September 30, 2024, respectively.

The contractual maturities of investment securities at December 31, 2024 were as follows (dollars in thousands). Expected maturities may differ from scheduled maturities due to the prepayment of principal or call provisions.


	Held to Maturity				Available for Sale
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
Due within one year	$	15,209	$	15,152	$	4,932	$	4,927
Due after one year to five years	80,597		75,568		9,553		9,537
Due after five years to ten years	1,210		1,252		1,915		1,906
Due after ten years	59,089		55,737		61,682		60,710
Total	$	156,105	$	147,709	$	78,082	$	77,080

The Company assesses each available for sale investment security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors. The Company did not record an ACL on any available for sale investment securities at December 31, 2024 or September 30, 2024. As of both dates, the Company considered the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value. The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields for such securities decline. The Company does not believe that these securities are impaired because of their credit quality or related to any issuer or industry specific event. The Company has the ability and intent to hold the investments until the fair value recovers.

The Company measures expected credit losses on held to maturity investment securities, which are comprised of U.S. government agency and U.S. government mortgage-backed securities, private label mortgage-backed securities, municipal, and other bonds. The Company’s agency and mortgage-backed securities that are issued by U.S. government entities and agencies are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. As such, no ACL has been established for these securities. The ACL on the private label mortgage-backed securities, municipal, and other bonds within the held to maturity securities portfolio is calculated using the probability of default/loss given default ("PD/LGD") method. The calculation is completed on a quarterly basis using the default studies provided by an industry leading source. At December 31, 2024 and September 30, 2024, the ACL on the held to maturity securities portfolio totaled $55,000 and $60,000, respectively.


	Three Months Ended December 31, 2024
Held to Maturity	Beginning Allowance		Provision for (Recapture of) Credit Losses		Ending Allowance

MBS:

Private label residential	$	55	$	(3)	$	52

Bank issued trust preferred securities	5		(2)		3
Total	$	60	$	(5)	$	55


	Three Months Ended December 31, 2023
Held to Maturity	Beginning Allowance		Impact of Adopting CECL (ASU 2016-13)		Provision for (Recapture of) Credit Losses		Ending Allowance

MBS:

Private label residential	$	—	$	82	$	(9)	$	73

Bank issued trust preferred securities	—		10		(1)		9
Total	$	—	$	92	$	(10)	$	82

The ACL on held to maturity securities is included within investment securities held to maturity on the consolidated balance sheets. Changes in the ACL are recorded through the provision for (recapture of) credit losses on the consolidated income statement.

Accrued interest receivable on held to maturity investment securities totaled $810,000 at December 31, 2024 and is included in accrued interest receivable on the consolidated balance sheet. This amount is excluded from the estimate of expected credit losses. Held to maturity investment securities are typically classified as non-accrual when the contractual payment of principal or interest has become 90 days past due or management has serious doubts about the further collectability of principal or interest. When held to maturity investment securities are placed on non-accrual status, unpaid interest credited to income is reversed. The Company had $45,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at December 31, 2024.


	Credit Ratings
As of December 31, 2024	AAA/AA/A		BBB/BB/B		Unrated		Total
Held to Maturity
U.S. Treasury and U.S. government agency securities	$	79,391	$	—	$	—	$	79,391
MBS:
U.S. government agencies	48,161		—		—		48,161
Private label residential	15,326		—		11,507		26,833
Municipal securities	1,223		—		—		1,223
Bank issued trust preferred securities	—		—		497		497
Total held to maturity	$	144,101	$	—	$	12,004	$	156,105


	Credit Ratings
As of September 30, 2024	AAA/AA/A		BBB/BB/B		Unrated		Total
Held to Maturity
U.S. Treasury and U.S. government agency securities	$	92,312	$	—	$	—	$	92,312
MBS:							—
U.S. government agencies	49,481		—		—		49,481
Private label residential	16,277		—		12,202		28,479
Municipal securities	1,230		—		100		1,330
Bank issued trust preferred securities	—		—		495		495
Total held to maturity	$	159,300	$	—	$	12,797	$	172,097

Prior to adopting ASU 2016-13, the Company bifurcated OTTI into (1) amounts related to credit losses which are recognized through earnings and (2) amounts related to all other factors which are recognized as a component of other comprehensive income (loss). To determine the component of the gross OTTI related to credit losses, the Company compared the amortized cost basis of the OTTI security to the present value of its revised expected cash flows, discounted using its pre-impairment yield. The revised expected cash flow estimates for individual securities are based primarily on an analysis of default rates, prepayment speeds and third-party analytic reports. Significant judgment by management was required in this analysis that included, but not limited to, assumptions regarding the collectability of principal and interest, net of related expenses, on the underlying loans. The amounts written off due to credit loss remain and continue to be recovered on a cash basis.

The following table presents a roll forward of the credit loss component of held to maturity investment securities that have been written down for OTTI with the credit loss component recognized in earnings for the three months ended December 31, 2024 and 2023 (dollars in thousands):


	Three Months Ended December 31,
	2024		2023
Beginning balance of credit loss	$	803	$	816



Subtractions:
Net realized loss previously recorded as credit losses	—		(1)
Recapture of prior credit loss	(2)		(4)
Ending balance of credit loss	$	801	$	811