Goodwill and CDI |
9 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Goodwill and CDI | GOODWILL AND CDI Goodwill is initially recorded when the purchase price paid in a business combination exceeds the estimated fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed. Goodwill is presumed to have an indefinite useful life and is analyzed annually for impairment. The Company performs an annual review during the third quarter of each fiscal year, or more frequently if indicators of potential impairment exist, to determine if goodwill is impaired. For purposes of goodwill impairment testing, the services offered through the Bank and its subsidiary are managed as one strategic unit and represent the Company's only reporting unit. An assessment of qualitative factors is completed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative analysis concludes that further analysis is required, then a quantitative impairment test is completed. The quantitative goodwill impairment test is used to identify the existence of impairment and the amount of impairment loss and compares the reporting unit’s estimated fair value, including goodwill, to its carrying amount. If the fair value exceeds the carrying amount, goodwill is not considered impaired. If the carrying amount exceeds its fair value, an impairment loss is recognized equal to the amount of the excess, limited to the amount of goodwill allocated to that reporting unit. The Company performed its fiscal year 2026 goodwill impairment test during the quarter ended June 30, 2026 with the assistance of an independent third-party firm specializing in goodwill impairment valuations for financial institutions. Based on this assessment, the Company determined that it is not "more likely than not" that the Company's reporting unit's fair value is less than its carrying amount, and, therefore, goodwill was determined not to be impaired at May 31, 2026. As of June 30, 2026, management believes that there have been no events or changes in the circumstances since May 31, 2026 that would indicate a potential impairment of goodwill. No assurance can be given, however, that the Company will not record an impairment loss on goodwill in the future. If adverse economic conditions or decreases in the Company's stock price and market capitalization were deemed to be other than temporary, they may significantly affect the fair value of the Company's reporting unit and may trigger impairment charges. Any impairment charge could have a material adverse effect on the Company's results of operations and financial condition. CDI represents the future economic benefit of the potential cost savings from acquiring core deposits as part of a business combination compared to the cost of alternative funding sources. CDI is amortized to non-interest expense using an accelerated method based on the estimated runoff of related deposits over a period of ten years. CDI is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life. As of June 30, 2026, management believes that there have been no events or changes in circumstances that would indicate a potential impairment of CDI.
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