v3.26.1
Fair Value Of Financial Instruments
 6 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value Of Financial Instruments FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value Measurements – The Company uses fair value measurements to record fair value adjustments to certain financial instruments and to determine fair value disclosures in accordance with Accounting Standards Codification ("ASC") 820 and ASC 825. The Company's AFS securities and interest rate swap 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 financial instruments on a non-recurring basis, such as OREO and loans individually evaluated for impairment. These non-recurring fair value adjustments involve the application of lower of cost or fair value accounting or write-downs of individual financial instruments.

The Company groups its financial instruments at fair value in three levels based on the markets in which the financial instruments 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 the Company's own estimates of assumptions that market participants would use in pricing the financial instrument. 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 financial instrument.

The Company bases the fair value of its financial instruments on the price that would be received from the sale of an instrument in an orderly transaction between market participants at the measurement date under current market conditions. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value.

The following is a description of valuation methodologies used for financial instruments measured at fair value on a recurring basis.

AFS Securities - The Company's AFS securities portfolio is carried at estimated fair value. The Company primarily uses prices obtained from third-party pricing services to determine the fair value of its securities. On a quarterly basis, management corroborates a sample of prices obtained from the third-party pricing service for Level 2 securities by comparing them to an independent source. If the price provided by the independent source varies by more than a predetermined percentage from the price received from the third-party pricing service, then the variance is researched by management. The Company did not have to adjust prices obtained from the third-party pricing service when determining the fair value of its securities during the six months ended March 31, 2026 or during fiscal year 2025. The Company's major security types, based on the nature and risks of the securities, are:
•MBS - The majority of these securities are issued by Government Sponsored Enterprises ("GSEs"). Estimated fair values are based on a discounted cash flow method. Cash flows are determined based on prepayment projections of the underlying mortgages and are discounted using current market yields for benchmark securities. (Level 2)
•Corporate Bonds - Estimated fair values are based on a discounted cash flow method. Cash flows are determined by taking any embedded options into consideration and are discounted using current market yields for securities with similar credit profiles. (Level 2)

Interest Rate Swap - The Company's interest rate swap is designated as a cash flow hedge and is reported at fair value in other assets on the consolidated balance sheet if in a gain position and in other liabilities if in a loss position, with any unrealized gains and losses,
net of taxes, reported as AOCI in stockholders' equity. See "Note 5. Borrowed Funds" for additional information. The estimated fair values of the interest rate swap is obtained from the counterparty and is determined by a discounted cash flow analysis using observable market-based inputs. On a quarterly basis, management corroborates the estimated fair value by internally calculating the estimated fair value using a discounted cash flow analysis with independent observable market-based inputs from a third party. No adjustments were made to the estimated fair value obtained from the counterparty during the six months ended March 31, 2026 or during fiscal year 2025. (Level 2)

The following tables provide the level of valuation assumption used to determine the carrying value of the Company's financial instruments measured at fair value on a recurring basis at the dates presented. All of the Company's financial instruments measured at fair value on a recurring basis were assets at March 31, 2026 and September 30, 2025. The Company did not have any Level 3 financial instruments measured at fair value on a recurring basis at March 31, 2026 or September 30, 2025.
March 31, 2026
Quoted Prices Significant Significant
in Active MarketsOther ObservableUnobservable
Carryingfor Identical Assets InputsInputs
Value (Level 1) (Level 2) (Level 3)
(Dollars in thousands)
AFS Securities:
MBS$805,751 $— $805,751 $— 
Corporate bonds3,815 — 3,815 — 
  809,566 — 809,566 — 
Interest rate swap1,336 — 1,336 — 
$810,902 $— $810,902 $— 

September 30, 2025
Quoted Prices Significant Significant
in Active MarketsOther ObservableUnobservable
Carryingfor Identical Assets InputsInputs
Value (Level 1) (Level 2) (Level 3)
(Dollars in thousands)
AFS Securities:
MBS$863,500 $— $863,500 $— 
Corporate bonds3,716 — 3,716 — 
  867,216 — 867,216 — 
Interest rate swap926 — 926 — 
$868,142 $— $868,142 $— 
The following is a description of valuation methodologies used for significant financial instruments measured at fair value on a non-recurring basis. The significant unobservable inputs used in the determination of the fair value of assets classified as Level 3 have an inherent measurement uncertainty that, if changed, could result in higher or lower fair value measurements of these assets as of the reporting date. Collateral dependent assets are assets evaluated on an individual basis. Those collateral dependent assets that are evaluated on an individual basis are considered financial assets measured at fair value on a non-recurring basis.

Loans Receivable – The fair value of collateral dependent loans individually evaluated for loss on a non-recurring basis during the six months ended March 31, 2026 and 2025 that were still held in the portfolio was $50.2 million as of March 31, 2026 and 2025. Fair values of collateral dependent loans individually evaluated for loss cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

The one- to four-family loans included in this amount were individually evaluated to determine if the carrying value of the loan was in excess of the fair value of the collateral, less estimated selling costs of 10%. Fair values were estimated through current appraisals. Management does not adjust or apply a discount to the appraised value of one- to four-family loans, except for the estimated sales cost noted above, and the primary unobservable input for these loans was the appraisal.

For commercial loans, if the most recent appraisal or book value of the collateral does not reflect current market conditions due to the passage of time and/or other factors, management will adjust the existing appraised or book value based on knowledge of local market
conditions, recent transactions, and estimated selling costs, if applicable. Adjustments to appraised or book values are generally based on assumptions not observable in the marketplace. The primary significant unobservable inputs for commercial loans individually evaluated during the six months ended March 31, 2026 or 2025 were downward adjustments to the collateral value for estimated costs to sell/dispose of the assets and management’s evaluation of market participant expectations if the Bank were to sell the collateral. During the six months ended March 31, 2026, the adjustments ranged from 8% to 100%, with a weighted average of 19%. During the six months ended March 31, 2025, the adjustments ranged from 10% to 99%, with a weighted average of 22%. The basis utilized in calculating the weighted averages for these adjustments was the original unadjusted value of each collateral item.

OREO – OREO primarily represents real estate acquired as a result of foreclosure or by deed in lieu of foreclosure and is carried at the lower of cost or fair value. The fair value for one- to four-family OREO is estimated through current appraisals or listing prices, less estimated selling costs of 10%. Management does not adjust or apply a discount to the appraised value or listing price, except for the estimated sales costs noted above. The primary significant unobservable input for one- to four-family OREO was the appraisal or listing price. There was no one- to four-family OREO measured on a non-recurring basis during the six months ended March 31, 2026 and March 31, 2025.

For commercial OREO, if the most recent appraisal or book value of the collateral does not reflect current market conditions due to the passage of time and/or other factors, management will adjust the existing appraised or book value based on knowledge of local market conditions, recent transactions, and estimated selling costs, if applicable. Adjustments to appraised or book values are generally based on assumptions not observable in the marketplace. Fair values of foreclosed property cannot be determined with precision and may not be realized in an actual sale of the property and, as such, are classified as Level 3. There was no commercial OREO measured on a non-recurring basis during the six months ended March 31, 2026 and 2025.

Fair Value Disclosures – The Company estimated fair value amounts using available market information and a variety of valuation methodologies as of the dates presented. Considerable judgment is required to interpret market data to develop the estimates of fair value. The estimates presented are not necessarily indicative of amounts the Company would realize from a current market exchange at subsequent dates.

The carrying amounts and estimated fair values of the Company's financial instruments by fair value hierarchy, at the dates presented, were as follows:
March 31, 2026
CarryingEstimated Fair Value
Amount Total Level 1Level 2Level 3
(Dollars in thousands)
Assets:
Cash and cash equivalents$330,925 $330,925 $330,925 $— $— 
AFS securities809,566 809,566 — 809,566 — 
Loans receivable8,114,205 7,919,862 — — 7,919,862 
FHLB stock79,420 79,420 79,420 — — 
Interest rate swap1,336 1,336 — 1,336 — 
Liabilities:
Deposits6,924,491 6,924,926 3,910,366 3,014,560 — 
Borrowings1,707,055 1,704,829 — 1,704,829 — 
September 30, 2025
CarryingEstimated Fair Value
Amount Total Level 1Level 2Level 3
(Dollars in thousands)
Assets:
Cash and cash equivalents$252,443 $252,443 $252,443 $— $— 
AFS securities867,216 867,216 — 867,216 — 
Loans receivable8,111,961 7,902,077 — — 7,902,077 
FHLB stock90,662 90,662 90,662 — — 
Interest rate swap926 926 — 926 — 
Liabilities:
Deposits6,591,448 6,597,102 3,578,768 3,018,334 — 
Borrowings1,950,770 1,952,458 — 1,952,458 —