The Company may use derivative financial instruments, such as interest rate floors and collars, as part of its interest rate risk management. Interest rate caps and floors are agreements whereby one party agrees to pay or receive a floating rate of interest on a notional principal amount for a predetermined period of time if certain market interest rate thresholds are met. The Company considers the credit risk inherent in these contracts to be negligible. As of September 30, 2022 and 2021, the Company did not hold any interest rate floors or collars.

The Company is a party to interest rate derivatives that are not designated as hedging instruments. Under a program, the Company executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. These interest rate swaps with customers are simultaneously offset by interest rate swaps that the Bank executes with a third-party financial institution, such that the Bank minimizes its net risk exposure resulting from such transactions. Because the interest rate swaps associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings. The changes in the fair value of the swaps offset each other, except for the credit risk of the counterparties, which is determined by taking into consideration the risk rating, probability of default and loss given default for all counterparties. The Company had $0 and $300,000 in cash pledged for collateral on its interest rate swaps with financial institutions at September 30, 2022 and 2021, respectively.

The following table presents summary information regarding these derivatives for September 30, 2022 and 2021.

	Notional Amount		Average Maturity (Years)	Weighted Average Fixed Rate	Weighted Average Variable Rate		Fair Value
	(Dollars in thousands)
September 30, 2022
Classified in Other Assets:
Customer interest rate swaps	$	19,512	5.9	3.63%	1 Mo. LIBOR + 2.50	$	(2,275)
	$	6,940	4.6	6.13%	1 Mo. BSBY + 3.00	$	(212)
Total	$	26,452	5.2	4.88%		$	(2,487)

Classified in Other Liabilities:
3rd Party interest rate swaps	$	19,512	5.9	3.63%	1 Mo. LIBOR + 2.50	$	2,275
	$	6,940	4.6	6.13%	1 Mo. BSBY + 3.00	$	212
Total	$	26,452	5.2	4.88%		$	2,487

September 30, 2021
Classified in Other Assets:
Customer interest rate swaps	$	20,111	6.9	3.61%	1 Mo. LIBOR + 2.50	$	183
Classified in Other Liabilities:
3rd Party interest rate swaps	$	20,111	6.9	3.61%	1 Mo. LIBOR + 2.50	$	(183)

At September 30, 2022 and 2021, the Company had outstanding commitments (substantially all of which expire within one year) to originate one-to four-family residential loans, construction loans, commercial real estate loans, commercial business loans and consumer loans. These commitments were comprised of fixed and variable rate loans.

	September 30,
	2022		2021
		(In thousands)
Financial instruments whose contract amounts represent credit risk
Letters of credit	$	740	$	2,901
Unused lines of credit		73,825		63,798
Fixed rate loan commitments		2,550		9,156
Variable rate loan commitments		49,913		14,558
Total	$	127,028	$	90,413