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FAIR VALUE DISCLOSURES
 12 Months Ended
Sep. 30, 2025
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. 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, 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, 2025 and 2024:

 

   Total   Level 1   Level 2   Level 3 
   (In thousands) 
September 30, 2025    
Assets:                
Securities available for sale:                
Obligations of U.S. government agencies:                
Mortgage-backed securities - residential  $82   $-   $82   $- 
Obligations of U.S. government-sponsored enterprises:                    
Mortgage-backed securities-residential   14,313    -    14,313    - 
Corporate securities   6,787    -    6,787    - 
Total securities available for sale  $21,182   $-   $21,182   $- 
Derivative assets   911    -    911    - 
Total assets  $22,093   $-   $22,093   $- 
Derivative liabilities  $911   $-   $911   $- 
Total liabilities  $911   $-   $911   $- 

 

   Total   Level 1   Level 2   Level 3 
   (In thousands) 
September 30, 2024    
Assets:                
Securities available for sale:                
Obligations of U.S. government agencies:                
Mortgage-backed securities - residential  $89   $-   $89   $- 
Obligations of U.S. government-sponsored enterprises:                    
Mortgage-backed securities-residential   11,506    -    11,506    - 
Corporate securities   4,021    -    4,021    - 
Total securities available for sale  $15,616   $-   $15,616   $- 
Derivative assets   1,405    -    1,405    - 
Total assets  $17,021   $-   $17,021   $- 
Derivative liabilities  $1,405   $-   $1,405   $- 
Total Liabilities  $1,405   $-   $1,405   $- 

 

The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis.

 

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. The Company sold two properties totaling $1.8 million and wrote down its remaining property by $57 thousand during the year ended September 30, 2025.

 

Collateral Dependent Individually Evaluated Loans

 

Collateral dependent individually evaluated loans are measured and reported at fair value through specific allocations of the allowance for credit losses based on the fair value of the underlying collateral. At September 30, 2025 and 2024 there were no collateral dependent loans with specific reserves.

The following table provides the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a non-recurring basis at September 30, 2025 and 2024:

 

   Total   Level 1   Level 2   Level 3 
   (In thousands) 
September 30, 2025    
Other real estate owned  $2,167   $-   $-   $2,167 
Total  $2,167   $-   $-   $2,167 

 

    Total    Level 1    Level 2    Level 3 
    (In thousands) 
September 30, 2024     
Other real estate owned  $1,501   $-   $-   $1,501 
Total  $1,501   $-   $-   $1,501 

 

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 at September 30, 2025 and 2024:

 

Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)
   Fair
Value		   Valuation      
September 30, 2025  Estimate   Techniques  Unobservable
Input		  Range
(Weighted Average)
Other real estate owned  $2,167   Appraisal  Liquidation expenses (1)  -1.5% to -1.5% (-1.5%)

 

Quantitative Information about Level 3 Fair Value Measurements
(Dollars in thousands)
    Fair
Value		   Valuation      
September 30, 2024   Estimate   Techniques  Unobservable
Input		  Range
(Weighted Average)
Other real estate owned  $1,501   Appraisal  Liquidation expenses (1)  -13.0% to -19.6% (-14.6%)

 

(1)Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable.

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, 2025 and 2024. 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. The Company’s bank-owned life insurance is not a marketable asset and may generally only be redeemed with the insurance company and is therefore not included in the table below.

 

   Carrying   Fair   Fair Value Measurement Placement 
   Value   Value   (Level 1)   (Level 2)   (Level 3) 
   (In thousands) 
September 30, 2025                    
Financial instruments - assets                    
Investment securities held to maturity  $67,266   $61,160   $-   $61,160   $- 
Loan receivable net allowance for credit losses   849,003    855,377    -    -    855,377 
Financial instruments - liabilities                         
Certificates of deposit including retirement certificates   209,948    210,168    -    210,168    - 
Borrowings   49,054    48,576    -    48,576    - 
                          
September 30, 2024                         
Financial instruments - assets                         
Investment securities held-to-maturity  $79,816   $72,617   $-   $72,617   $- 
Loan receivable net allowance for credit losses   7,72,614    7,66,822    -    -    766,822 
Financial instruments - liabilities                         
Certificates of deposit including retirement certificates   159,652    159,582    -    159,582    - 
Borrowings   28,568    28,151    -    28,151    -