Fair value is defined under GAAP as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of three levels. These levels are:

Quoted prices in active markets for identical assets (Level 1): Inputs that are quoted unadjusted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Other observable inputs (Level 2): Inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity including quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets and inputs derived principally from or corroborated by observable market data by correlation or other means.

Significant unobservable inputs (Level 3): Inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing an asset or liability developed based on the best information available in the circumstances.

Financial instruments are presented in the tables that follow by recurring or nonrecurring measurement status. Recurring assets are initially measured at fair value and are required to be remeasured at fair value in the consolidated financial statements at each reporting date. Assets measured on a nonrecurring basis are assets that, as a result of an event or circumstance, were required to be remeasured at fair value after initial recognition in the consolidated financial statements at some time during the reporting period.

The following tables present assets that are measured at estimated fair value on a recurring basis at the dates indicated (in thousands):


	Total Estimated		Estimated Fair Value Measurements Using
March 31, 2025	Fair Value		Level 1		Level 2		Level 3

Investment securities available for sale:
Municipal securities	$	31,019	$	—	$	31,019	$	—
Agency securities		30,203		—		30,203		—
Real estate mortgage investment conduits		23,490		—		23,490		—
Residential mortgage-backed securities		10,226		—		10,226		—
Other mortgage-backed securities		24,498		—		24,498		—
Total assets measured at fair value on a recurring basis	$	119,436	$	—	$	119,436	$	—


	Total Estimated		Estimated Fair Value Measurements Using
March 31, 2024	Fair Value		Level 1		Level 2		Level 3

Investment securities available for sale:
Municipal securities	$	35,136	$	—	$	35,136	$	—
Agency securities		43,577		—		43,577		—
Real estate mortgage investment conduits		25,665		—		25,665		—
Residential mortgage-backed securities		12,551		—		12,551		—
Other mortgage-backed securities		26,267		—		26,267		—
Total assets measured at fair value on a recurring basis	$	143,196	$	—	$	143,196	$	—

There were no transfers of assets into or out of Levels 1, 2 or 3 during the years ended March 31, 2025 and 2024.

The following methods were used to estimate the fair value of investment securities in the above table:

Investment securities are included within Level 1 of the hierarchy when quoted prices in an active market for identical assets are available. The Company uses a third-party pricing service to assist the Company in determining the fair value of its Level 2 securities, which incorporates pricing models and/or quoted prices of investment securities with similar characteristics. Investment securities are included within Level 3 of the hierarchy when there are significant unobservable inputs.

For Level 2 securities, the independent pricing service provides pricing information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data from market research publications.

The Company’s third-party pricing service has established processes for the Company to submit inquiries regarding the estimated fair value. In such cases, the Company’s third-party pricing service will review the inputs to the evaluation in light of any new market data presented by the Company. The Company’s third-party pricing service may then affirm the original estimated fair value or may update the evaluation on a go-forward basis.

Management reviews the pricing information received from the third-party pricing service through a combination of procedures that include an evaluation of methodologies used by the pricing service, analytical reviews and performance analysis of the prices against statistics and trends. Based on this review, management determines whether the current placement of the security in the fair value hierarchy is appropriate or whether transfers may be warranted. As necessary, management compares prices received from the pricing service to discounted cash flow models or by performing independent valuations of inputs and assumptions similar to those used by the pricing service in order to help ensure prices represent a reasonable estimate of fair value.

There were no assets measured at estimated fair value on a nonrecurring basis at March 31, 2025 and 2024.

For information regarding the Company’s method for estimating the fair value of individually evaluated loans, see Note 1 – Summary of Significant Accounting Policies – ACL on Loans.

In determining the estimated net realizable value of the underlying collateral, the Company primarily uses third-party appraisals which may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available and include consideration of variations in location, size, and income production capacity of the property. Additionally, the appraisals are periodically further adjusted by the Company in consideration of charges that may be incurred in the event of foreclosure and are based on management’s historical knowledge, changes in business factors and changes in market conditions.

Individually evaluated loans are reviewed and evaluated quarterly for additional reserve and adjusted accordingly based on the same factors identified above. Because of the high degree of judgment required in estimating the fair value of collateral underlying individually evaluated loans and because of the relationship between fair value and general economic conditions, the Company considers the fair value of individually evaluated loans to be highly sensitive to changes in market conditions.

The following disclosure of the estimated fair value of financial instruments is made in accordance with GAAP. The Company, using available market information and appropriate valuation methodologies, has determined the estimated fair value amounts. However, considerable judgment is necessary to interpret market data in the development of the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in the future. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The carrying amounts and estimated fair values of financial instruments are as follows at the dates indicated (in thousands):



	Carrying								Estimated
March 31, 2025	Amount		Level 1		Level 2		Level 3		Fair Value

Assets:
Cash and cash equivalents	$	29,414	$	29,414	$	—	$	—	$	29,414
Investment securities available for sale		119,436		—		119,436		—		119,436
Investment securities held to maturity		203,079		—		175,392		—		175,392
Loans receivable, net		1,047,086		—		—		974,523		974,523
FHLB stock		4,342		—		4,342		—		4,342

Liabilities:
Certificates of deposit		227,459		—		226,392		—		226,392
FHLB advances		76,400		—		76,316		—		76,316
Junior subordinated debentures		27,091		—		—		19,650		19,650


	Carrying								Estimated
March 31, 2024	Amount		Level 1		Level 2		Level 3		Fair Value

Assets:
Cash and cash equivalents	$	23,642	$	23,642	$	—	$	—	$	23,642
Investment securities available for sale		143,196		—		143,196		—		143,196
Investment securities held to maturity		229,510		—		195,519		—		195,519
Loans receivable, net		1,008,649		—		—		909,254		909,254
FHLB stock		4,927		—		4,927		—		4,927

Liabilities:
Certificates of deposit		190,972		—		188,972		—		188,972
FHLB advances		88,304		—		88,101		—		88,101
Junior subordinated debentures		27,004		—		—		19,327		19,327

Fair value estimates were based on existing financial instruments without attempting to estimate the value of anticipated future business. The fair value was not estimated for assets and liabilities that were not considered financial instruments.