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FAIR VALUE DISCLOSURES | 9 Months Ended
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Jun. 30, 2025
Fair Value Disclosures [Abstract] |
FAIR VALUE DISCLOSURES | NOTE F – 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 securities available-for-sale and the Company’s derivative assets and liabilities 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 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, 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 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 based 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 securities 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-sponsored mortgage-backed securities. The fair values of these securities are obtained from an independent nationally recognized pricing service. An independent pricing service provides the Company with prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities in the Company’s portfolio. Various modeling techniques are used to determine pricing for Company’s mortgage-backed securities, including option pricing and discounted cash flow models. The inputs to these models include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data. Derivatives The Bank executes interest rate swaps with commercial lending customers to facilitate their respective risk management strategies. The fair values of such derivatives are based on valuation models from a third party using current market terms (including interest rates and fees), the remaining terms of the agreements and the credit worthiness of the counter party as of the measurement date (Level 2). 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.
|  | Fair Value on a Recurring Basis |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
|  | (In thousands) |
June 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 |  |  | 14,876 |  |  |  | — |  |  |  | 14,876 |  |  |  | — |
Corporate securities |  |  | 6,646 |  |  |  | — |  |  |  | 6,646 |  |  |  | — |
Total securities available for sale |  | $ | 21,604 |  |  | $ | — |  |  | $ | 21,604 |  |  | $ | — |
Derivative assets |  |  | 977 |  |  |  | — |  |  |  | 977 |  |  |  | — |
Total assets |  | $ | 22,581 |  |  | $ | — |  |  | $ | 22,581 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities |  | $ | 977 |  |  | $ | — |  |  | $ | 977 |  |  | $ | — |
Total liabilities |  | $ | 977 |  |  | $ | — |  |  | $ | 977 |  |  | $ | — |
|  | Fair Value on a Recurring Basis |
|  | 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 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 measured and reported at fair value based on the fair value of the underlying collateral. The following tables provide the level of valuation assumptions used to determine the carrying value of the other real estate owned measured at fair value on a non-recurring basis at June 30, 2025 and September 30, 2024.
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
June 30, 2025 |  | (In thousands) |
Other real estate owned |  | $ | 2,167 |  |  |  | — |  |  |  | — |  |  | $ | 2,167 |
Total |  | $ | 2,167 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,167 |
|  | Total |  |  | Level 1 |  |  | Level 2 |  |  | Level 3 |
September 30, 2024 |  | (In thousands) |
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 non-recurring 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 |  |  |  |  |  |
June 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) | 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 June 30, 2025 and September 30, 2024. For short-term financial assets such as cash and cash equivalents and accrued interest receivable, 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 being payable on demand and 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, therefore, is not included in the table below.
|  | Carrying |  |  | Fair |  |  | Fair Value Measurement Placement |
|  | Value |  |  | Value |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
|  | (In thousands) |
June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held to maturity |  | $ | 69,520 |  |  | $ | 62,591 |  |  | $ | — |  |  | $ | 62,591 |  |  | $ | — |
Loan receivable net allowance for credit losses |  |  | 835,932 |  |  |  | 838,336 |  |  |  | — |  |  |  | — |  |  |  | 838,336 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit including retirement certificates |  |  | 180,523 |  |  |  | 179,819 |  |  |  | — |  |  |  | 179,819 |  |  |  | — |
Borrowings |  |  | 36,054 |  |  |  | 35,409 |  |  |  | — |  |  |  | 35,409 |  |  |  | — |
September 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments - assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment securities held to maturity |  | $ | 79,816 |  |  | $ | 72,617 |  |  | $ | — |  |  | $ | 72,617 |  |  | $ | — |
Loan receivable net allowance for credit losses |  |  | 772,614 |  |  |  | 766,822 |  |  |  | — |  |  |  | — |  |  |  | 766,822 |
Financial instruments - liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Certificates of deposit including retirement certificates |  |  | 159,652 |  |  |  | 159,582 |  |  |  | — |  |  |  | 159,582 |  |  |  | — |
Borrowings |  |  | 28,568 |  |  |  | 28,151 |  |  |  | — |  |  |  | 28,151 |  |  |  | — |

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- 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 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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