XML 36 R25.htm IDEA: XBRL DOCUMENT
v3.23.3

FAIR VALUE DISCLOSURES | 12 Months Ended
--- | ---
Sep. 30, 2023
Fair Value Disclosures [Abstract] |
FAIR VALUE DISCLOSURES | NOTE Q - FAIR VALUE DISCLOSURES The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as held-to-maturity securities, mortgage servicing rights, loans receivable and other real estate owned, or OREO. These non-recurring fair value adjustments involve the application of lower-of-cost-or-market accounting or write-downs of individual assets. In accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), the Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are:
| Level 1- | Valuation is based upon quoted prices for identical instruments traded in active markets.
| Level 2- | 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 all significant assumptions are observable in the market.
| Level 3- | Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability.
The Company bases its fair values on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis. Securities available-for-sale The Company’s available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income (loss) in stockholders’ equity. The securities available-for-sale portfolio consists of U.S. government and government-sponsored enterprise obligations and mortgage-backed securities. The fair values of these securities are obtained from an independent nationally recognized pricing service. An independent pricing service provides prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities. The following tables provide the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a recurring basis at September 30, 2023 and 2022:
September 30, 2023 |  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
Assets: |  | (In thousands) |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of U.S. government agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities - residential |  | $ | 92 |  |  | $ | — |  |  | $ | 92 |  |  | $ | — |
Obligations of U.S. government-sponsored enterprises: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities-residential |  |  | 10,033 |  |  |  | — |  |  |  | 10,033 |  |  |  | — |
Total securities available for sale |  | $ | 10,125 |  |  | $ | — |  |  | $ | 10,125 |  |  | $ | — |
Derivative assets |  |  | 2,579 |  |  |  | — |  |  |  | 2,579 |  |  |  | — |
Total assets |  | $ | 12,704 |  |  | $ | — |  |  | $ | 12,704 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | 2,579 |  |  | $ | — |  |  | $ | 2,579 |  |  | $ | — |
Total Liabilities |  | $ | 2,579 |  |  | $ | — |  |  | $ | 2,579 |  |  | $ | — |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Securities available-for-sale: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Obligations of U.S. government agencies: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities - residential |  | $ | 107 |  |  | $ | — |  |  | $ | 107 |  |  | $ | — |
Obligations of U.S. government-sponsored enterprises: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage-backed securities-residential |  |  | 9,122 |  |  |  | — |  |  |  | 9,122 |  |  |  | — |
Total securities available for sale |  | $ | 9,229 |  |  | $ | — |  |  | $ | 9,229 |  |  | $ | — |
Derivative assets (1) |  |  | 2,487 |  |  |  | — |  |  |  | 2,487 |  |  |  | — |
Total assets |  | $ | 11,716 |  |  | $ | — |  |  | $ | 11,716 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | 2,487 |  |  | $ | — |  |  | $ | 2,487 |  |  | $ | — |
Total Liabilities |  | $ | 2,487 |  |  | $ | — |  |  | $ | 2,487 |  |  | $ | — |
(1) Derivative assets were incorrectly shown as a negative balance within the Company's Annual Report on Form 10-K for the year-ended September 30, 2022. The derivative asset balances and corresponding totals have been corrected within the table above. The correction did not have an impact on the Company's consolidated balance sheet. The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis. Impaired Loans Loans which meet certain criteria are evaluated individually for impairment. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means that both the contractual interest and principal payments of a loan will be collected as scheduled in the loan agreement. Three impairment measurement methods are used, depending upon the collateral securing the asset: 1) the present value of expected future cash flows discounted at the loan’s effective interest rate; 2) the asset’s observable market price; or 3) the fair value of the collateral if the asset is collateral dependent. The regulatory agencies require this method for loans from which repayment is expected to be provided solely by the underlying collateral. The Company’s impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling and disposition costs. Fair value is estimated through current appraisals, and adjusted as necessary, by management, to reflect current market conditions and, as such, are generally classified as Level 3. Appraisals of collateral securing impaired loans are conducted by approved, qualified, and independent third-party appraisers. Such appraisals are ordered via the Bank’s credit administration department, independent from the lender who originated the loan, once the loan is deemed impaired, as described in the previous paragraph. Impaired loans are generally re-evaluated with an updated appraisal within one year of the last appraisal. However, the Company also obtains updated appraisals on performing construction loans that are approaching their maturity date to determine whether or not the fair value of the collateral securing the loan remains sufficient to cover the loan amount prior to considering an extension. The Company discounts the appraised “as is” value of the collateral for estimated selling and disposition costs and compares the resulting fair value of collateral to the outstanding loan amount. If the outstanding loan amount is greater than the discounted fair value, the Company requires a reduction in the outstanding loan balance or additional collateral before considering an extension to the loan. If the borrower is unwilling or unable to reduce the loan balance or increase the collateral securing the loan, it is deemed impaired and the difference between the loan amount and the fair value of collateral, net of estimated selling and disposition costs, is charged off through a reduction of the allowance for loan loss. Other Real Estate Owned Other real estate owned is carried at lower of cost or estimated fair value less disposal costs. The estimated fair value of the real estate is determined through current appraisals, and adjusted as necessary, by management, to reflect current market conditions. As such, other real estate owned is generally classified as Level 3. There were no valuation write-downs for the years ended September 30, 2023 and 2022. The following tables provide the level of valuation assumptions used to determine the carrying value of our assets measured at fair value on a non-recurring basis at September 30, 2023 and 2022:
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
September 30, 2023 |  | (In thousands) |
Impaired loans |  | $ | 777 |  |  | $ | — |  |  | $ | — |  |  | $ | 777 |
Total |  | $ | 777 |  |  | $ | — |  |  | $ | — |  |  | $ | 777 |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Impaired loans |  | $ | 5,659 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,659 |
Total |  | $ | 5,659 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,659 |
The following tables present additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Company has utilized Level 3 inputs to determine fair value: Quantitative Information about Level 3 Fair Value Measurements (Dollars in thousands)
|  | Fair Value |  |  | Valuation |  |  |  |
September 30, 2023 |  | Estimate |  |  | Techniques |  | Unobservable Input |  | Range (Weighted Average)
Impaired loans |  | $ | 777 |  |  | Appraisal of collateral (1) |  | Appraisal adjustments (2) |  | -50% to -8.0% (-19.4%)
|  | Fair Value |  |  | Valuation |  |  |  |
September 30, 2022 |  | Estimate |  |  | Techniques |  | Unobservable Input |  | Range (Weighted Average)
Impaired loans |  | $ | 5,659 |  |  | Appraisal of collateral (1) |  | Appraisal adjustments (2) |  | 0% to -31.7% (-9.9%)
| (1) | Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable.
| (2) | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.
The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments carried at cost or amortized cost as of September 30, 2023 and September 30, 2022. This table excludes financial instruments for which the carrying amount approximates fair value, which includes cash and cash equivalents, FHLBNY stock, bank owned life insurance, accrued interest receivable, interest and non-interest bearing demand, savings deposits, and accrued interest payable. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as interest-bearing demand, NOW, and money market savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity.
|  | Carrying |  |  | Fair |  |  | Fair Value Measurement Placement |
|  | Amount |  |  | Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
|  | (In thousands) |
September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity |  | $ | 85,835 |  |  | $ | 73,728 |  |  | $ | — |  |  | $ | 73,728 |  |  | $ | — |
Loans |  |  | 689,070 |  |  |  | 664,331 |  |  |  | — |  |  |  | — |  |  |  | 664,331 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  |  | 104,668 |  |  |  | 101,216 |  |  |  | — |  |  |  | 101,216 |  |  |  | — |
Borrowings |  |  | 29,515 |  |  |  | 28,177 |  |  |  | — |  |  |  | 28,177 |  |  |  | — |
September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held-to-maturity |  | $ | 91,646 |  |  | $ | 79,914 |  |  | $ | — |  |  | $ | 79,914 |  |  | $ | — |
Loans |  |  | 619,843 |  |  |  | 592,804 |  |  |  | — |  |  |  | — |  |  |  | 592,804 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit |  |  | 82,609 |  |  |  | 81,289 |  |  |  | — |  |  |  | 81,289 |  |  |  | — |
Borrowings |  |  | 15,625 |  |  |  | 14,762 |  |  |  | — |  |  |  | 14,762 |  |  |  | — |

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 -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482106/820-10-50-2 + Details
Name: | us-gaap_FairValueDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration