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LOANS RECEIVABLE, NET AND RELATED ALLOWANCE FOR CREDIT LOSSES

6 Months Ended

Mar. 31, 2026

Loans Receivable, Net and Related Allowance for Credit Losses [Abstract]

LOANS RECEIVABLE, NET AND RELATED ALLOWANCE FOR CREDIT LOSSES

NOTE J – LOANS RECEIVABLE, NET AND RELATED ALLOWANCE FOR CREDIT LOSSES

Loans receivable, net were comprised of the following:

		March 31,				September 30,
		2026				2025
		(In thousands)

One-to-four family residential		$	234,434			$	242,454
Commercial real estate			557,764				533,213
Construction and land			35,714				29,287
Home equity loans and lines of credit			30,310				31,778
Commercial business			19,878				20,048
Other			1,842				2,119
Total loans receivable			879,942				858,899
Net deferred loan fees			(1,723	)			(1,546	)
Total loans receivable, net		$	878,219			$	857,353

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The residential mortgage loan segment is further disaggregated into two types: first lien, amortizing term loans, and the combination of second lien amortizing term loans and home equity lines of credit. The commercial loan segment is further disaggregated into three types: loans secured by multifamily structures, loans secured by owner-occupied commercial structures, and loans secured by non-owner-occupied nonresidential properties. The construction and land loan segment consists primarily of developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures and to a lesser extent one-to-four family residential construction loans made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Construction loans to developers and investors have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time of the loan. The commercial business loan segment consists of loans made for the purpose of financing the activities of commercial customers and consists of revolving lines of credit and loans partially guaranteed by the U.S. Small Business Administration. The consumer loan segment consists primarily of stock-secured installment loans but also includes unsecured personal loans and overdraft lines of credit connected with customer deposit accounts.

Management uses a ten-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard with the added characteristic that collection or liquidation in full, based on current conditions and facts, is highly improbable. All loans greater than three months past due are considered Substandard. Any portion of a loan that has been charged off is placed in the Loss category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Company’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. The Company’s Asset Review Committee performs monthly reviews of all commercial relationships internally rated 6 (“Watch”) or worse. Confirmation of appropriate risk grading is performed by an external loan review company that semi-annually reviews and assesses loans within the portfolio. Generally, the external consultant reviews commercial relationships greater than $500 thousand and/or criticized relationships greater than $250 thousand. Detailed reviews, including plans for resolution, are performed on adversely classified loans on a monthly basis.

The following tables present the classes of the loan portfolio by origination year summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful for loans subject to the Company’s internal risk rating system and by performing status for all other loans as of March 31, 2026 and September 30, 2025:

		March 31, 2026																								Revolving Loans
		Term Loans Amortized Cost Basis by Origination Fiscal Year																								Amortized				Converted
		2026				2025				2024				2023				2022				Prior				Cost Basis				to Term				Total
		(In thousands)
One-to-four family residential
Performing		$	12,972			$	18,514			$	31,387			$	24,372			$	28,035			$	118,941			$	—			$	—			$	234,221
Non-performing			—				—				—				213				—				—				—				—				213
Total		$	12,972			$	18,514			$	31,387			$	24,585			$	28,035			$	118,941			$	—			$	—			$	234,434
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Commercial real estate
Pass		$	36,485			$	107,580			$	85,438			$	68,105			$	62,586			$	185,929			$	8,073			$	637			$	554,833
Special Mention			—				—				235				1,054				—				1,552				—				—				2,841
Substandard			—				—				—				—				90				—				—				—				90
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	36,485			$	107,580			$	85,673			$	69,159			$	62,676			$	187,481			$	8,073			$	637			$	557,764
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Construction and land
Pass		$	7,635			$	12,961			$	12,252			$	—			$	—			$	1,046			$	700			$	—			$	34,594
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				1,120				—				—				1,120
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	7,635			$	12,961			$	12,252			$	—			$	—			$	2,166			$	700			$	—			$	35,714
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Home equity loans and lines of credit
Performing		$	196			$	452			$	1,052			$	689			$	1,484			$	1,246			$	25,110			$	—			$	30,229
Non-performing			—				—				—				81				—				—				—				—				81
Total		$	196			$	452			$	1,052			$	770			$	1,484			$	1,246			$	25,110			$	—			$	30,310
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Commercial business
Pass		$	1,200			$	484			$	1,053			$	441			$	1,897			$	2,986			$	11,678			$	139			$	19,878
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	1,200			$	484			$	1,053			$	441			$	1,897			$	2,986			$	11,678			$	139			$	19,878
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Other
Performing		$	200			$	2			$	16			$	—			$	16			$	1,416			$	192			$	—			$	1,842
Non-performing			—				—				—				—				—				—				—				—				—
Total		$	200			$	2			$	16			$	—			$	16			$	1,416			$	192			$	—			$	1,842
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

		September 30, 2025																								Revolving Loans
		Term Loans Amortized Cost Basis by Origination Fiscal Year																								Amortized				Converted
		2025				2024				2023				2022				2021				Prior				Cost Basis				to Term				Total
		(In thousands)
One-to-four family residential
Performing		$	18,873			$	31,952			$	36,663			$	28,465			$	23,556			$	102,642			$	—			$	—			$	242,151
Non-performing			—				—				213				90				—				—				—				—				303
Total		$	18,873			$	32,165			$	36,663			$	28,555			$	23,556			$	102,642			$	—			$	—			$	242,454
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Commercial real estate
Pass		$	111,456			$	86,068			$	70,546			$	63,905			$	54,060			$	140,866			$	6,110			$	—			$	533,011
Special Mention			—				—				—				91				—				111				—				—				202
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	111,456			$	86,068			$	70,546			$	63,996			$	54,060			$	140,977			$	6,110			$	—			$	533,213
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Construction and land
Pass		$	10,037			$	12,982			$	3,405			$	—			$	—			$	2,863			$	—			$	—			$	29,287
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	10,037			$	12,982			$	3,405			$	—			$	—			$	2,863			$	—			$	—			$	29,287
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Home equity loans and lines of credit
Performing		$	492			$	1,181			$	1,271			$	1,523			$	265			$	1,090			$	25,808			$	—			$	31,630
Non-performing			—				—				148				—				—				—				—				—				148
Total		$	492			$	1,181			$	1,419			$	1,523			$	265			$	1,090			$	25,808			$	—			$	31,778
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Commercial business
Pass		$	669			$	1,195			$	465			$	2,001			$	1,061			$	2,270			$	12,240			$	147			$	20,048
Special Mention			—				—				—				—				—				—				—				—				—
Substandard			—				—				—				—				—				—				—				—				—
Doubtful			—				—				—				—				—				—				—				—				—
Total		$	669			$	1,195			$	465			$	2,001			$	1,061			$	2,270			$	12,240			$	147			$	20,048
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Other
Performing		$	464			$	18			$	—			$	25			$	—			$	1,423			$	189			$	—			$	2,119
Non-performing			—				—				—				—				—				—				—				—				—
Total		$	464			$	18			$	—			$	25			$	—			$	1,423			$	189			$	—			$	2,119
Current period gross charge-offs			—				—				—				—				—				—				—				—				—

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The Bank was not accruing interest on any loans delinquent 90 days or greater as of March 31, 2026 and September 30, 2025. The following tables present the classes of the loan portfolio summarized by the aging categories of loans for the periods presented:

						30-59				60-89
						Days				Days				90 Days +				Total
		Current				Past Due				Past Due				Past Due				Loans
		(In thousands)
March 31, 2026
One-to-four family residential		$	230,796			$	3,425			$	—			$	213			$	234,434
Commercial real estate			543,245				14,284				235				—				557,764
Construction and land			34,594				1,120				—				—				35,714
Home equity lines of credit			30,163				—				66				81				30,310
Commercial business			19,187				691				—				—				19,878
Other			1,842				—				—				—				1,842
Total		$	859,827			$	19,520			$	301			$	294			$	879,942

						30-59				60-89
						Days				Days				90 Days +				Total
		Current				Past Due				Past Due				Past Due				Loans
		(In thousands)
September 30, 2025
One-to four-family residential		$	240,975			$	1,016			$	160			$	303			$	242,454
Commercial real estate			532,867				—				346				—				533,213
Construction and land			29,287				—				—				—				29,287
Home equity lines of credit			31,630				—				—				148				31,778
Commercial business			19,913				135				—				—				20,048
Other			2,119				—				—				—				2,119
Total		$	856,791			$	1,151			$	506			$	451			$	858,899

There were two residential loans totaling $294 thousand that were in the process of foreclosure at March 31, 2026.

Individually Evaluated Loans

Management individually evaluates a loan when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract.

The following tables provide detail on the Company’s loans individually evaluated by collateral type in the Company’s allowance for credit losses with the associated allowance amount, if applicable, as of March 31, 2026 and September 30, 2025:

		Unpaid
		Principal				Recorded				Allowance for
		Balance				Investment				Credit Losses
		(In thousands)
March 31, 2026
Real Estate Collateral:
One-to-four family residential		$	213			$	213			$	—
Commercial real estate			510				510				—
Construction and land			1,120				1,120				532
Home loans and lines of credit			81				81				—
Total		$	1,924			$	1,924			$	532

		Unpaid
		Principal				Recorded				Allowance for
		Balance				Investment				Credit Losses
		(In thousands)
September 30, 2025
Real Estate Collateral:
One-to-four family residential		$	303			$	303			$	—
Home loans and lines of credit			148				148				—
Total		$	451			$	451			$	—

Allowance for Credit Losses

An ACL is maintained to absorb losses from the loan portfolio. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process to make appropriate and timely adjustments to the ACL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ACL. As loans individually evaluated for impairment are promptly written down to their fair value, typically there is no portion of the ACL for individually evaluated loans.

The following tables set forth the allocation of the Bank’s ACL by loan category at the dates indicated. The portion of the ACL allocated to each loan category does not represent the total available for future losses which may occur within the loan category as the total allowance for credit losses is a valuation allocation applicable to the entire loan portfolio. The Company generally charges off the collateral or discounted cash flow deficiency on all loans at 90 days past due and all loans rated substandard or worse that are 90 days past due.

		One-to-Four												Home Equity
		Family				Commercial				Construction				Lines of				Commercial
		Residential				Real Estate				and Land				Credit				Business				Other				Unallocated				Total
		(Dollars in thousands)

Balance-September 30, 2025		$	838			$	5,975			$	754			$	40			$	742			$	2			$	(1	)		$	8,350
Charge-offs			—				—				—				—				—				—				—				—
Recoveries			—				—				—				—				2				—				—				2
Provision (credit)			(152	)			(249	)			524				(8	)			(42	)			(2	)			—				71
Balance- December 31, 2025		$	686			$	5,726			$	1,278			$	32			$	702			$	—			$	(1	)		$	8,423
Charge-offs			—				—				—				—				—				—				—				—
Recoveries			—				—				—				—				4				—				—				4
Provision (credit)			(17	)			92				100				(1	)			(3	)			—				1				172
Balance- March 31, 2026		$	669			$	5,818			$	1,378			$	31			$	703			$	—			$	—			$	8,599

		One-to-Four												Home Equity
		Family				Commercial				Construction				Lines of				Commercial
		Residential				Real Estate				and Land				Credit				Business				Other				Unallocated				Total
		(In thousands)

Balance- September 30, 2024		$	755			$	5,334			$	624			$	30			$	805			$	—			$	—			$	7,548
Charge-offs			—				—				—				—				—				—				—				—
Recoveries			—				—				—				—				103				—				—				103
Provision (credit)			(1	)			261				71				3				(125	)			—				—				209
Balance- December 31, 2024		$	754			$	5,595			$	695			$	33			$	783			$	—			$	—			$	7,860
Charge-offs			—				—				—				—				—				—				—				—
Recoveries			—				—				—				—				5				—				—				5
Provision (credit)			1				54				(169	)			2				(17	)			—				200				71
Balance- March 31, 2025		$	755			$	5,649			$	526			$	35			$	771			$	—			$	200			$	7,936

The Company’s ACL increased by $249 thousand to $8.6 million, or 0.98% of total loan receivable, during the six months ended March 31, 2026 from $8.4 million at September 30, 2025. Growth in loans receivable during the six months ended March 31, 2026 as well as an increase in specific reserves for individually evaluated loans resulted in additional provisions for credit losses according to current economic and business conditions.

During the six months ended March 31, 2026, there were no loans modified to borrowers experiencing financial difficulty.