0001558370-23-019964 | 10-K | XBRL Viewer

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Premises and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Premises and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Premises and Equipment [Abstract]
Premises and equipment, gross	$ 24,206	$ 21,166
Less: Accumulated depreciation and amortization	(8,149)	(6,704)
Premises and equipment, net	16,057	14,462
Depreciation and amortization	1,800	1,700
Land [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	1,600	1,600
Building and Improvements [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	10,868	10,862
Leasehold Improvements [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	4,247	2,615
Furniture, Fixtures and Equipment [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross	$ 7,491	5,978
Construction in Progress [Member]
Premises and Equipment [Abstract]
Premises and equipment, gross		$ 111

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Certain prior period amounts have been reclassified to conform to the current year’s presentation. These reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior year net income or stockholders’ equity.

Use of Estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheet and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Risks and Uncertainties

The United States economy is currently experiencing a level of price inflation not experienced since the late 1970's and early 1980's. It is therefore difficult to predict the response of consumers and businesses to this level of inflation, and its impact on the economy. In addition, in order to attempt to control and reduce the level of inflation, the Federal Reserve has embarked on a series of interest rate increases along with quantitative tightening to further constrict economic conditions. It is unclear whether the Federal Reserve’s efforts will be successful, and what impact they may have on the United States’ economy. It is possible that that the combined effects of inflation and increases in market interest rates could cause the economy of the United States to enter a recession, which could negatively impact the businesses of our borrowers and their ability to repay their loans or need credit, which could negatively affect our results of operations.

Significant Group Concentrations of Credit Risk

Most of the Company’s activities are with customers located in Nassau, Queens and Kings Counties and surrounding areas of New York State. Note 3 discusses the types of lending that the Company engages in. Although the Company has a diversified loan portfolio, its debtors’ ability to honor their contracts is influenced by the region’s economy. The Company does not have any significant concentrations to any one industry or customer.

Cash and Cash Equivalents

For purposes of reporting consolidated cash flows, cash and due from banks includes cash on hand, cash items in process of collection and amounts due from banks. Cash and cash equivalents also include interest-bearing deposits in banks and federal funds sold. Interest-bearing deposits in other financial institutions mature within 90 days and are carried at cost. Net cash flows are reported for customer loan and deposit transactions and short-term borrowings with original maturities of 90 days or less.

Restrictions on Cash

Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements.

Dividend Restriction

Banking regulations require maintaining certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to shareholders.

Investment Securities

Investment securities are classified as held-to-maturity or available-for-sale at the time of purchase. Investment securities classified as held-to-maturity, which management has the positive intent and ability to hold to maturity, are reported at amortized cost. Investment securities classified as available for sale, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. Any decision to sell investment securities available for sale would be based on various factors, including, but not limited to, asset / liability management strategies, changes in interest rates or prepayment risks, liquidity needs, or regulatory capital considerations.

Premiums are amortized and discounts accreted using the interest method over the remaining terms of the related securities. Dividend and interest income are recognized when earned. Sales of investment securities are recorded at trade date, with realized gains and losses on sales determined using the specific identification method and included in non-interest income.

The Company evaluates securities for other-than-temporary impairment ("OTTI") on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. For securities in an unrealized loss position, the Company considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. The Company also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings. For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income. The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis.

Federal Home Loan Bank Stock

As a member of the FHLB of New York, the Company is required to maintain an investment in the stock of the FHLB based upon the amount of outstanding FHLB borrowings. This stock does not have a readily determinable fair value and is carried at cost.

Loans Held for Sale

Loans held for sale are carried at estimated fair value in the aggregate as determined by outstanding commitments from investors. Gains or losses on loan sales are recognized at the time of sale and are determined by the difference between net sales proceeds and the principal balance of the loans sold, adjusted for net deferred loan fees or costs. Loan origination and commitment fees, net of certain direct loan origination costs, are deferred as an adjustment to the carrying value of the loan until it is sold.

Loans and Loan Interest Income Recognition

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs, and an allowance for loan losses. The loan portfolio is segmented into residential real estate, commercial real estate, multifamily, commercial and industrial, construction, and consumer loans.

Interest income on loans is accrued and credited to income as earned. Net loan origination fees and costs are deferred and accreted/amortized to interest income over the loan’s contractual life using the level-yield method, adjusted for actual prepayments.

Acquired loans are recorded at their fair value at the acquisition date. Credit discounts are included in the determination of fair value; therefore, an allowance for loan losses is not recorded at the acquisition date.

Acquired loans are evaluated upon acquisition and classified as either purchased credit impaired or purchased non-impaired. Purchased credit impaired loans reflect credit deterioration since origination such that it is probable at acquisition that the Company will be unable to collect all contractually required payments. For purchased credit impaired loans, expected cash flows at the acquisition date in excess of the fair value of loans are recorded as interest income over the remaining life of the loans (accretable yield) using a level yield method if the timing and amount of the future cash flows is reasonably estimable. The excess of the loan’s contractual principal and interest over expected cash flows is not recorded (nonaccretable difference).

Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are recognized prospectively as interest income. Decreases in expected cash flows after the acquisition date are recognized immediately through the provision for loan losses. For purchased non-impaired loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the economic life of the loans using a method that approximates the interest method.

Lending Risk

The principal business of the Bank is lending in one-to-four family residential mortgage loans, commercial real estate mortgage loans, multi-family mortgage loans, commercial and industrial loans and consumer loans. The Bank considers its primary lending area to be Nassau County and the New York City boroughs. A substantial portion of the Bank’s loans are secured by real estate in these areas. Accordingly, the ultimate collectability of the loan portfolio is susceptible to changes in market and economic conditions in this region.

One-to-four family residential mortgage loans involve certain risks such as interest rate risk and risk of nonpayment. Adjustable-rate loans decrease the interest rate risk to the Company that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk can be affected by the overall health of the economy, including unemployment rates and housing prices.

Commercial real estate lending entails significant additional risks as compared with single-family residential property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank’s primary market area. The cash flows of the income producing investment properties could be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on credit quality. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending could have an adverse effect on credit quality.

Multifamily lending entails additional risks as compared with single-family residential property lending, but less when compared to commercial real estate lending. Loans in this classification include income producing residential investment properties of five or more families. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property. Repayment is derived generally from the rental income generated from the property and may be supplemented by the owners’ personal cash flow. Credit risk arises with changes in economic conditions that could cause an increase in vacancy rates.

Commercial and industrial lending is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Generally, these loans are primarily secured by inventories and other assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class.

The Company’s construction loan portfolio covers the development of commercial properties. Construction loans involve the disbursement of funds during construction with repayment substantially dependent on the success of the ultimate project. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans because their ultimate repayment depends on the satisfactory completion of construction and is sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Repayment is dependent on completion of the project and the subsequent financing of the completed project as a commercial real estate loan, and in some instances on the rent or sale of the underlying project.

Consumer loans generally have shorter terms and higher interest rates than other lending but generally involve more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class.

Allowance for Loan Losses

A loan is considered past due when it is not paid in accordance with its contractual terms. The accrual of income on loans, including impaired loans, and other loans in the process of foreclosure, is generally discontinued when a loan becomes 90 days or more delinquent, or when certain factors indicate that the ultimate collection of principal and interest is in doubt. Loans on which the accrual of income has been discontinued are designated as non-accrual loans. All previously accrued interest is reversed against interest income, and income is recognized subsequently only in the period that cash is received, provided no principal payments are due and the remaining principal balance outstanding is deemed collectible. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The Company defines an impaired loan as a loan for which it is probable, based on current information, that the Company will not collect all amounts due in accordance with the contractual terms of the loan agreement. The Company has defined the population of impaired loans to be all non-accrual loans, loans risk rated 9 (Doubtful) or 10 (Loss), and all loans subject to a troubled debt restructuring (“TDR”). Impaired loans are individually assessed to determine that the loan’s carrying value is not in excess of the expected future cash flows, discounted at the loan’s original effective interest rate, or the underlying collateral (less estimated costs to sell) if the loan is collateral dependent. Impairments are recognized through a charge to the allowance for loan losses for the amount that the loan’s carrying value exceeds the discounted cash flow analysis or estimated fair value of collateral (less estimated costs to sell) if the loan is collateral dependent.

The allowance for loan losses is increased by the provision for loan losses charged against income and is decreased by charge-offs, net of recoveries. Loan losses are recognized in the period the loans, or portion thereof, are deemed uncollectible. Generally, the Company will record a loan charge-off (including a partial charge-off) to reduce a loan to the estimated fair value of the underlying collateral, less costs to sell, if it is determined that it is probable that recovery will come primarily from the sale of such collateral. The provision for loan losses is based on management’s evaluation of the adequacy of the allowance which considers, among other things, impaired loans, past loan loss experience, known and inherent risks in the portfolio, existing adverse situations that may affect the borrower’s ability to repay, and estimated fair value of any underlying collateral securing loans. Additionally, management evaluates changes, if any, in underwriting standards, collection, charge-off and recovery practices, the nature or volume of the portfolio, lending staff, concentration of loans, as well as current economic conditions, and other relevant factors. Management believes the allowance for loan losses is adequate to provide for probable and reasonably estimable losses at the statement of condition date.

The allowance for loan losses consists of the following components:

Specific allowances are established for impaired loans, generally defined by the Company to be all nonaccrual loans, loans risk rated 8 (Substandard), 9 (Doubtful) or 10 (Loss), and all loans subject to a TDR. The amount of impairment provided for as an allowance is represented by the deficiency, if any, between the present value of expected future cash flows discounted at the original loan’s effective interest rate or the underlying collateral value (less estimated costs to sell) if the loan is collateral dependent, and the carrying value of the loan. Impaired loans that have no impairment losses are not considered for general valuation allowances described below.

General allowances are established for loan losses on a portfolio basis for loans that do not meet the definition of impaired. The portfolio is grouped into similar risk characteristics, primarily by loan segment and internal credit risk ratings. Historical loss experience is applied to each loan group using a three-year lookback period. The loss experience is adjusted, as appropriate, for the environmental factors discussed below. This evaluation is inherently subjective, as it requires material estimates that may be susceptible to significant revisions based upon changes in economic and market conditions. Actual loan losses may be significantly more than the allowance for loan losses we have established, which could have a material negative effect on the Company’s financial results.

In underwriting a loan secured by real property, the Company requires an appraisal (or an automated valuation model) of the property by an independent licensed appraiser approved by the Company’s Board of Directors. The appraisal is subject to review by an independent third party hired by the Company. Management reviews and inspects properties before disbursement of funds during the term of a construction loan. Generally, management obtains updated appraisals when a loan is deemed impaired. These appraisals may be more limited than those prepared for the underwriting of a new loan. In addition, when the Company acquires other real estate owned, it generally obtains a current appraisal to substantiate the net carrying value of the asset at the time of foreclosure.

As noted above, the adjustments to the Company’s loss experience is based on management’s evaluation of several environmental factors, including:

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changes in local, regional, national, and international economic and business conditions and developments that affect the collectability of the loan portfolio, including the condition of various market segments;

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changes in the nature and volume of the Company’s portfolio and in the terms of the Company’s loans;

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changes in the experience, ability, and depth of lending management and other relevant staff;

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changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

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changes in the quality of the Company’s loan review system;

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changes in lending policies, procedures and strategies;

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changes in the value of underlying collateral for collateral-dependent loans;

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the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

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the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

While management uses available information to recognize probable and reasonably estimable losses on loans, future additions to the allowance may be necessary based upon changes in economic, market or other conditions. Changes in estimates could result in a material change in the allowance. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for loan losses. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination.

A loan modification is deemed a TDR when two conditions are met: 1) the borrower is experiencing financial difficulty; and 2) a concession is made by the Company that would not otherwise be considered for a borrower or collateral with similar credit risk characteristics. Once an obligation has been restructured, it continues to be considered restructured until paid in full or otherwise settled, sold or charged off. The Company records an impairment charge equal to the difference between the present value of estimated future cash flows under the restructured terms discounted at the original loan’s effective interest rate, or the underlying collateral value less costs to sell, if the loan is collateral dependent.

The allowance for loan and lease losses related to purchased credit impaired loans is based on an analysis that is performed each period to estimate the expected cash flows for each of the loan pools. To the extent that the expected cash flows of a loan pool have decreased since the acquisition date, the Company establishes an allowance for loan losses.

Mortgage Servicing Rights

The Company originates and sells mortgage loans in the secondary market and may retain the servicing of these loans. When mortgage loans are sold with servicing retained, servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sales of loans. Fair value is based on market prices for comparable mortgage servicing contracts, when available, or alternatively, is based on a valuation model that calculates the present value of estimated future net servicing income. Servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized into non-interest income in proportion to, and over the period of, the estimated future net servicing income of the underlying loans.

Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to carrying amount. Impairment is determined by stratifying rights into groupings based on predominant risk characteristics, such as interest rate, loan type and investor type. Impairment is recognized through a valuation allowance for an individual grouping, to the extent that fair value is less than the carrying amount. If the Company later determines that all or a portion of the impairment no longer exists for a particular grouping, a reduction of the allowance may be recorded as an increase to income. Changes in valuation allowances are reported within non-interest expense on the income statement. The fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses.

Fees earned for servicing loans are reported on the statements of income as loan servicing income when the related mortgage loan payments are collected. The amortization of loan servicing rights is netted against loan servicing fee income. Servicing fees totaled $2.0 million and $1.6 million for the years ended September 30, 2023 and 2022, respectively. Late fees and ancillary fees related to loan servicing are not material.

Transfers of Financial Assets

Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Foreclosed Assets

Foreclosed assets are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. Physical possession of residential real estate property collateralizing a consumer mortgage loan occurs when legal title is obtained upon completion of foreclosure or when the borrower conveys all interest in the property to satisfy the loan through completion of a deed in lieu of foreclosure or through similar legal agreement. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and amortization. Land is carried at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the respective assets, which are 39 years for buildings and 2 to 10 years for furniture, fixtures and equipment. Leasehold improvements are amortized over the terms of the respective leases or the estimated useful lives of the improvements, whichever is shorter. Repairs and maintenance costs are recorded as a component of non-interest expense as incurred.

Leases

Leases are classified as operating or finance leases at the lease commencement date. Currently, the Company does not have any leases classified as financing leases. The Company leases certain locations and equipment. The Company records leases on the Consolidated Statements of Financial Condition in the form of an operating lease liability for the present value of future minimum payments under the lease terms and a right-of-use asset equal to the lease liability adjusted for such items as deferred or prepaid rent, lease incentives, any impairment of the right-of-use asset. The discount rate used in determining the lease liability is based upon incremental borrowing rates the Company could obtain for similar loans as of the date of commencement or renewal.

The Company does not record leases on the Consolidated Statements of Financial Condition that are classified as short term (12 months or less). Short-term lease payments are recognized in the income statement on a straight-line basis over the lease term. Certain leases may include one or more options to renew. The exercise of lease renewal options is typically at the Company’s discretion, and are included in the operating lease liability if it is reasonably certain that the renewal option will be exercised. Certain real estate leases may contain lease and non-lease components, such as common area maintenance charges, real estate taxes, and insurance, which are generally accounted for separately and are not included in the measurement of the lease liability since they are generally able to be segregated. The Company does not sublease any of its leased properties. The Company does not lease properties from any related parties.

Goodwill and Other Intangible Assets

Goodwill arises from business combinations and is generally determined as the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that a goodwill impairment test should be performed. The Company has selected August 31 as the date to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on the balance sheet.

Other intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Core deposit intangible assets are amortized on an accelerated method over their estimated useful life of 10 years.

Loan Commitments and Related Financial Instruments

Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Derivatives

The Company records cash flow hedges at the inception of the derivative contract based on the Company’s intentions and belief as to likely effectiveness as a hedge. Cash flow hedges represent a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. For a cash flow hedge, the gain or loss on the derivative is reported in other comprehensive income (“OCI”) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. The changes in the fair value of derivatives that are not highly effective in hedging the changes in fair value or expected cash flows of the hedged item are recognized immediately in current earnings. Changes in the fair value of derivatives that do not qualify for hedge accounting are reported currently in earnings, as non-interest income.

Accrued settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Accrued settlements on derivatives that do not qualify for hedge accounting are reported in non-interest income. Cash flows on hedges are classified in the cash flow statement the same as the cash flows of the items being hedged.

The Company formally documents the relationship between derivatives and hedged items, as well as the risk-management objective and the strategy for undertaking hedge transactions at the inception of the hedging relationship. This documentation includes linking cash flow hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the derivative instruments that are used are highly effective in offsetting changes in fair values or cash flows of the hedged items. The Company discontinues hedge accounting when it determines that the derivative is no longer effective in offsetting changes in the fair value or cash flows of the hedged item, the derivative is settled or terminates, a hedged forecasted transaction is no longer probable, a hedged firm commitment is no longer firm, or treatment of the derivative as a hedge is no longer appropriate or intended.

When hedge accounting is discontinued, subsequent changes in fair value of the derivative are recorded as non-interest income. When a cash flow hedge is discontinued but the hedged cash flows or forecasted transactions are still expected to occur, gains or losses that were accumulated in other comprehensive income are amortized into earnings over the same periods in which the hedged transactions will affect earnings.

The Company is exposed to losses if a counterparty fails to make its payments under a contract in which the Company is in the net receiving position. The Company anticipates that the counterparties will be able to fully satisfy their obligations under the agreements. All the contracts to which the Company is a party settle monthly or quarterly. In addition, the Company obtains collateral above certain thresholds of the fair value of its derivatives for each counterparty based upon their credit standing and the Company has netting agreements with the dealers with which it does business.

Debt Issuance Costs

The costs attributable to issuing a debt instrument are reported on the Consolidated Statements of Financial Condition as a deduction from the face amount of the note and amortized as interest expense over the term of the note.

Earnings Per Share ("EPS")

Earnings Per Share (“EPS”)

Basic EPS is net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the period. All outstanding unvested share-based payment awards that contain rights to nonforfeitable dividends are considered participating securities for this calculation. Diluted EPS includes the dilutive effect of additional potential common shares issuable under stock options. Potentially dilutive common shares are excluded from the computation of dilutive EPS in the periods in which the effect would be anti-dilutive.

Series A Preferred Stock

Holders of the Company’s Series A preferred stock will be entitled to receive dividends when, as and if declared by the Company’s board of directors, in the same per share amount as the common stockholders. No dividends will be payable on the common stock unless a dividend identical to that paid on the common stock is paid at the same time on the Series A preferred stock. Therefore Series A preferred stock is treated as common stock for EPS calculations. Series A preferred stock has no voting rights. In the event of a dissolution of the Company, Series A preferred stock is entitled to the payment of any declared and unpaid dividend, and then will share in dissolution proceeds, if any, with the shares of common stock.

Comprehensive Income

Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale and unrealized gains and losses on cash flow hedges which are also recognized as separate components of stockholders’ equity.

Loss Contingencies

Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there now are such matters that will have a material effect on the financial statements.

Income Taxes

Income tax expense is comprised of two components, current and deferred. The current component reflects taxes payable or refundable for a current period based on applicable tax laws, and the deferred component represents the tax effects of temporary differences between amounts recognized for financial accounting and tax purposes. Deferred tax assets and liabilities reflect the tax effects of such differences that are anticipated to result in taxable or deductible amounts in the future, when the temporary differences reverse. Deferred tax assets are recognized if it is more likely than not they will be realized, and may be reduced by a valuation allowance if it is more likely than not that all or some portion will not be realized.

Tax positions that are uncertain but meet a more likely than not recognition threshold are initially and subsequently measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement with a taxing authority that has full knowledge of all relevant information. The determination of whether or not a tax position meets the more likely than not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to management’s judgment.

The Company recognizes interest expense and penalties on uncertain tax positions as a component of income tax expense and recognizes interest income on refundable income taxes as a component of other non-interest income.

Fair Value Measurements

Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 16. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.

Revenue From Contracts With Customers

Revenue from contracts with customers generally comprises deposit service fees, which are included as a component of other non-interest income in the accompanying Consolidated Statements of Income. The Company identifies the performance obligations included in the contracts with customers, determines the transaction price, allocates the transaction price to the performance obligations, as applicable, and recognizes revenue when performance obligations are satisfied, which is generally at the point services are performed for the customer.

Operating Segments

While management monitors the revenue streams of the Company’s various products and services, the identifiable segments are not material and operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all the financial service operations are considered by management to be aggregated in one reportable operating segment.

Stock Compensation Plans

Compensation cost is recognized for stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) issued to employees and directors based upon the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used to estimate the fair value for RSAs and RSUs.

Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur.

Supplemental Executive Retirement Plan

In connection with the previous acquisition of Chinatown Federal Savings Bank (“CFSB”), the assets of the CFSB Supplemental Executive Retirement Plan (“CFSB SERP”) are included in the Consolidated Statements of Financial Condition. The CFSB SERP provides benefits to two former executives of CFSB and the assets of the CFSB SERP are held in a Rabbi Trust which was fully funded prior to the acquisition of CFSB by the Company. The Company has no further liability or obligation with respect to the CFSB SERP assets other than record keeping. No ongoing valuation of the assets will be obtained and the amount of plan assets will continue to be equal to the liability reflected on the Consolidated Statement of Financial Condition. The SERP liability is included in other liabilities on the Consolidated Statement of Financial Condition.

Adoption of New Accounting Standards

Standards Adopted in Fiscal Year 2023

On October 1, 2022, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and subsequent amendments thereto, which requires the Company to recognize most leases on the balance sheet. The Company adopted the standard under a modified retrospective approach as of the date of adoption and elected to apply several of the available practical expedients, including: 1) carryover of historical lease determination and lease classification conclusions, 2) carryover of historical initial direct cost balances for existing leases, and 3) accounting for lease and non-lease components in contracts in which the Company is a lessee as a single lease component.

Adoption of the leasing standard resulted in the recognition of operating right-of-use assets, and operating lease liabilities of approximately $10 million as of October 1, 2022. These amounts were determined based on the present value of remaining minimum lease payments, discounted using the Company’s incremental borrowing rate as of the date of adoption. There was no material impact to the timing of expense or income recognition in the Company’s Consolidated Statements of Income. Prior periods were not restated and continue to be presented under legacy GAAP. Disclosures about the Company’s leasing activities are presented in Note 5.

In December 2022, the Financial Accounting Standards Board (the “FASB”) issued ASU 2022-06, “Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848” that extends the period of time preparers can utilize the reference rate reform relief guidance. In 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The objective of the guidance in Topic 848 is to provide relief during the temporary transition period, so the FASB included a sunset provision within Topic 848 based on expectations of when LIBOR would cease being published. In 2021, the UK Financial Conduct Authority delayed the intended cessation date of certain tenors of USD LIBOR to June 30, 2023. To ensure relief in Topic 848 covers the period of time during which a significant number of modifications may take place, ASU 2022-06 defers the sunset date of Topic 848 from December 31, 2022 to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. For all entities, the amendments in ASU 2022-06 are effective upon issuance. The Company adopted this ASU on July 1, 2023. The adoption of this standard did not have material effect on the Company’s operating results or financial condition.

Standards That Have Not Yet Been Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments — Credit Losses Topic 326: Measurement of Credit Losses on Financial Instruments. The objective of the ASU is to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date by replacing the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses, which is referred to as the current expected credit loss (“CECL”) methodology, and requires consideration of a broader range of reasonable and supportable information to form credit loss estimates. In November 2019, the FASB adopted changes to delay the effective date of ASU 2016-13 to 2023 for certain entities, including certain Securities and Exchange Commission filers, public business entities, and private companies. As the Company is a smaller reporting company under SEC regulations, the Company is eligible for the delay and will adopt CECL effective October 1, 2023. The Company has reviewed the potential impact to our securities portfolio, which primarily consists of U.S. government sponsored entities, mortgage-backed securities and corporate bonds which have no history of credit loss and have strong credit ratings. The Company does not expect the standard to have a material impact on its financial statements as it relates to the Company’s securities portfolio. The Company is also currently evaluating the impact the CECL model will have on our accounting and allowance for loan losses. The Company has engaged a third-party to assist in the development of a CECL model for the calculation of the allowance for loan and lease losses in preparation for the change to the current expected credit loss model. The Company has also engaged a third-party to perform a model validation of its CECL model. The Company is also in the process of updating its policies, procedures and internal controls accordingly. The Company will adopt the ASU using the required modified retrospective method with a one-time cumulative effect adjustment to retained earnings, net of tax, as of the beginning of the reporting period. The Company is in the process of finalizing its CECL calculation for adoption.

In March 2022, the FASB issued ASU 2022-02, which eliminates creditor accounting guidance for troubled debt restructurings (“TDRs”) for entities that have adopted ASU 2016-13, Financial Instruments-Credit Losses (Topic 326) and enhances Vintage Disclosures of Gross Writeoffs. This ASU eliminates Subtopic 310-40 guidance for TDRs, and requires creditors to apply the loan refinancing and restructuring guidance in Subtopic 310-20 when evaluating modifications granted to borrowers experiencing financial difficulty to determine whether the modification is considered a continuation of an existing loan or a new loan. The vintage disclosure component of the ASU requires entities to disclose current-period gross writeoffs by origination year for financing receivables and investment leases within the scope of Subtopic 326-20. The Company will adopt ASU 2022-02 concurrently with the adoption of ASU 2016-13.

Investment Securities

12 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities

Note 2. Investment Securities

The following table summarizes the amortized cost and fair value of securities available for sale and securities held to maturity at September 30, 2023 and 2022 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) and gross unrecognized gains and losses:


	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	322	$	—	$	(180)	$	142
Corporate bonds		12,700		—		(1,953)		10,747
Total available for sale securities	$	13,022	$	—	$	(2,133)	$	10,889

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
	Cost		Gains		Losses		Fair Value
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,531	$	—	$	(178)	$	1,353
U.S. GSE commercial mortgage-backed securities		2,577		—		(170)		2,407
Total held to maturity securities	$	4,108	$	—	$	(348)	$	3,760


	September 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	375	$	—	$	(133)	$	242
Corporate bonds		12,700		—		(657)		12,043
Total available for sale securities	$	13,075	$	—	$	(790)	$	12,285

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
	Cost		Gains		Losses		Fair Value
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,778	$	—	$	(160)	$	1,618
U.S. GSE commercial mortgage-backed securities		2,636		—		(159)		2,477
Total held to maturity securities	$	4,414	$	—	$	(319)	$	4,095

The amortized cost and fair value of investment securities at September 30, 2023, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single date are shown separately.


	September 30, 2023
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Five to ten years	$	12,700	$	10,747
U.S. GSE residential mortgage-backed securities		322		142
Total securities available for sale		13,022		10,889
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,531		1,353
U.S. GSE commercial mortgage-backed securities		2,577		2,407
Total securities held to maturity		4,108		3,760
Total investment securities	$	17,130	$	14,649

At September 30, 2023 and 2022, respectively, investment securities with a carrying amount of $2.0 million and $1.8 million were pledged to secure public deposits and for other purposes required or permitted by law.

There were no holdings of securities of any one issuer in an amount greater than 10% of stockholders’ equity at September 30, 2023 and 2022.

The following table presents a summary of realized gains and losses from the sale of investment securities:


	Year Ended September 30,
(in thousands)	2023		2022
Proceeds from sales	$	—	$	2,105
Gross realized gains on sales	$	—	$	105
Gross realized losses on sales		—		—
Total realized gains, net⁽¹⁾	$	—	$	105

(1)	Amount does not include associated income tax of $0 and $24 for year ended September 30, 2023 and 2022, respectively.

The following tables summarize gross unrealized and unrecognized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized or unrecognized loss position at September 30, 2023 and 2022.


	September 30, 2023
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	142	$	(180)	5	$	142	$	(180)
Corporate bonds		1,080		(120)		9,667		(1,833)	7		10,747		(1,953)
Total available-for-sale	$	1,080	$	(120)	$	9,809	$	(2,013)	12	$	10,889	$	(2,133)

	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrecognized				Unrecognized		Number of			Unrecognized
	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Held-to-maturity:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	1,353	$	(178)	4	$	1,353	$	(178)
U.S. GSE commercial mortgage-backed securities		—		—		2,407		(170)	1		2,407		(170)
Total held-to-maturity	$	—	$	—	$	3,760	$	(348)	5	$	3,760	$	(348)


	September 30, 2022
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	152	$	(126)	$	90	$	(7)	6	$	242	$	(133)
Corporate bonds		10,843		(657)		—		—	6		10,843		(657)
Total available-for-sale	$	10,995	$	(783)	$	90	$	(7)	12	$	11,085	$	(790)

	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrecognized				Unrecognized		Number of			Unrecognized
	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Held-to-maturity:
U.S. GSE residential mortgage-backed securities	$	1,618	$	(160)	$	—	$	—	4	$	1,618	$	(160)
U.S. GSE commercial mortgage-backed securities		2,477		(159)		—		—	1		2,477		(159)
Total held-to-maturity	$	4,095	$	(319)	$	—	$	—	5	$	4,095	$	(319)

There was no other than temporary impairment loss recognized on any securities at September 30, 2023 or 2022.

Unrealized losses on corporate bonds have not been recognized into income because the decline in fair value is largely due to changes in interest rates and other market conditions, management does not intend to sell and it is likely that management will not be required to sell the securities prior to their anticipated recovery. The issuers continue to make timely principal and interest payments on the bonds. The fair value is expected to recover as the bonds approach maturity. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2023 and 2022

The mortgage-backed securities held by the Company were issued by U.S government-sponsored entities and agencies. Because the decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality, and because the Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company does not consider these securities to be other-than-temporarily impaired at September 30, 2023 and 2022.

Loans - Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	$ 14,933	$ 12,281
Purchased credit impaired loans	128	1,231
Total past due and non-accrual		15,229
Total	1,874,562	1,623,531
Total Past Due [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Total past due and non-accrual	23,982
30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	7,523	2,436
60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	1,526	512
Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	1,850,452	1,607,071
Residential Portfolio Segment [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	5,750	3,151
Purchased credit impaired loans		0
Total past due and non-accrual		4,463
Total	657,332	516,258
Residential Portfolio Segment [Member] \| Total Past Due [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Total past due and non-accrual	8,732
Residential Portfolio Segment [Member] \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	2,314	961
Residential Portfolio Segment [Member] \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	668	351
Residential Portfolio Segment [Member] \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Residential Portfolio Segment [Member] \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	648,600	511,795
Multi-family
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	2,452	2,348
Purchased credit impaired loans		0
Total past due and non-accrual		2,348
Total	578,895	575,061
Multi-family \| Total Past Due [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Total past due and non-accrual	2,452
Multi-family \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	576,443	572,713
Commercial Real Estate
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	6,119	5,875
Purchased credit impaired loans		602
Total past due and non-accrual		6,811
Total	537,314	472,984
Commercial Real Estate \| Total Past Due [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Total past due and non-accrual	10,742
Commercial Real Estate \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	3,765	936
Commercial Real Estate \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	858	0
Commercial Real Estate \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Commercial Real Estate \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	526,572	465,571
Commercial and Industrial
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	612	907
Purchased credit impaired loans	128	629
Total past due and non-accrual		1,607
Total	87,575	46,285
Commercial and Industrial \| Total Past Due [Member]
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Total past due and non-accrual	2,056
Commercial and Industrial \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	1,444	539
Commercial and Industrial \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		161
Commercial and Industrial \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Commercial and Industrial \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	85,391	44,049
Construction and land development
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual		0
Purchased credit impaired loans		0
Total past due and non-accrual		0
Total	13,021	12,907
Construction and land development \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Construction and land development \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Construction and land development \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Construction and land development \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	13,021	12,907
Consumer
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual		0
Purchased credit impaired loans		0
Total past due and non-accrual		0
Total	425	36
Consumer \| 30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| 60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	$ 425	$ 36

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
Document and Entity Information - USD ($) $ in Millions	Sep. 30, 2023	Dec. 18, 2023	Mar. 31, 2023
Cover [Abstract]
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Period End Date	Sep. 30, 2023
Current Fiscal Year End Date	--09-30
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Document Transition Report	false
Entity File Number	001-41384
Entity Registrant Name	Hanover Bancorp, Inc. /NY
Entity Central Index Key	0001828588
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	81-3324480
Entity Address, Address Line One	80 East Jericho Turnpike
Entity Address, City or Town	Mineola
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11501
City Area Code	516
Local Phone Number	548-8500
Title of 12(b) Security	Common stock
Trading Symbol	HNVR
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Entity Shell Company	false
Entity Public Float			$ 101.9
Entity Common Stock, Shares Outstanding		7,333,895
Auditor Name	Crowe LLP
Auditor Firm ID	173
Auditor Location	Livingston, New Jersey

Regulatory Matters (Details) $ in Thousands	12 Months Ended
Regulatory Matters (Details) $ in Thousands	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Total capital to risk-weighted assets
Actual capital, Amount	$ 205,786	$ 191,355
Actual capital, Ratio	0.1460	0.1632
Minimum capital adequacy requirement, Amount	$ 112,755	$ 93,796
Minimum capital adequacy requirement, Ratio	0.0800	0.0800
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 147,991	$ 123,107
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.1050	0.1050
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 140,944	$ 117,245
Minimum to be well capitalized under prompt corrective action provisions, Ratio	0.1000	0.1000
Tier 1 capital to risk-weighted assets
Actual capital, Amount	$ 190,928	$ 178,340
Actual capital, Ratio	0.1355	0.1521
Minimum capital adequacy requirement, Amount	$ 84,566	$ 70,347
Minimum capital adequacy requirement, Ratio	0.0600	0.0600
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 119,802	$ 99,658
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.0850	0.0850
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 112,755	$ 93,796
Minimum to be well capitalized under prompt corrective action provisions, Ratio	0.0800	0.0800
Common equity tier 1 capital to risk-weighted assets
Actual capital, Amount	$ 190,928	$ 178,340
Actual capital, Ratio	0.1355	0.1521
Minimum capital adequacy requirement, Amount	$ 63,425	$ 52,760
Minimum capital adequacy requirement, Ratio	0.0450	0.0450
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 98,661	$ 82,071
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.0700	0.0700
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 91,613	$ 76,209
Minimum to be well capitalized under prompt corrective action provisions, Ratio	0.0650	0.0650
Tier 1 capital to average total assets
Actual capital, Amount	$ 190,928	$ 178,340
Actual capital, Ratio	0.0916	0.1090
Minimum capital adequacy requirement, Amount	$ 83,338	$ 65,429
Minimum capital adequacy requirement, Ratio	0.0400	0.0400
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 104,173	$ 81,786
Minimum to be well capitalized under prompt corrective action provisions, Ratio	0.0500	0.0500
Cash dividends to the Holding Company	$ 5,300
Retained earnings available to pay dividends	$ 53,000

Fair Value (Tables)

12 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis


	September 30, 2023
			Fair Value Measurements Using:
			Quoted Prices In				Significant
			Active Markets		Significant Other		Unobservable
	Carrying		for Identical Assets		Observable Inputs		Inputs
(in thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	142	$	—	$	142	$	—
Corporate bonds		10,747		—		10,747		—
Loan servicing rights		4,479		—		—		4,479
Derivatives		445		—		445		—
Total	$	15,813	$	—	$	11,334	$	4,479


	September 30, 2022
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	242	$	—	$	242	$	—
Corporate bonds		12,043		—		12,043		—
Loan servicing rights		4,353		—		—		4,353
Total	$	16,638	$	—	$	12,285	$	4,353

Changes in Mortgage Servicing Rights


	Year Ended September 30,
(in thousands)	2023		2022
Balance at beginning of period	$	4,353	$	3,690
Additions		893		1,158
Adjustment to fair value		(767)		(495)
Balance at end of period	$	4,479	$	4,353

Carrying amounts and estimated fair values of the Company's financial instruments not carried at fair value


	September 30, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	192,624	$	192,624	$	—	$	—	$	192,624
Securities held-to-maturity		4,108		—		3,760		—		3,760
Loans, net		1,859,876		—		—		1,798,916		1,798,916
Accrued interest receivable		10,636		—		729		9,907		10,636

Financial liabilities:
Time deposits		530,076		—		525,198		—		525,198
Demand and other deposits		1,204,994		1,204,994		—		—		1,204,994
Borrowings		179,849		—		176,693		—		176,693
Subordinated debentures		24,621		—		26,355		—		26,355
Accrued interest payable		1,821		53		1,768		—		1,821


	September 30, 2022
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	149,947	$	149,947	$	—	$	—	$	149,947
Securities held-to-maturity		4,414		—		4,095		—		4,095
Loans, net		1,610,687		—		—		1,549,171		1,549,171
Accrued interest receivable		8,546		—		219		8,327		8,546

Financial liabilities:
Time deposits		339,073		—		328,964		—		328,964
Demand and other deposits		1,189,033		1,189,033		—		—		1,189,033
Borrowings		101,752		—		99,597		—		99,597
Subordinated debentures		24,568		—		24,199		—		24,199
Accrued interest payable		915		1		914		—		915

Loans - Categorized by class and internally assigned risk grades (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Loans Portfolio by Credit Risk Rating [Abstract]
Total	$ 1,874,562	$ 1,623,531
Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	1,842,519	1,590,893
Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	10,740	11,545
Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	21,303	21,093
Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Residential Real Estate
Loans Portfolio by Credit Risk Rating [Abstract]
Total	657,332	516,258
Residential Real Estate \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	648,012	512,595
Residential Real Estate \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	756	512
Residential Real Estate \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	8,564	3,151
Residential Real Estate \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Multi-family
Loans Portfolio by Credit Risk Rating [Abstract]
Total	578,895	575,061
Multi-family \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	576,443	571,128
Multi-family \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Multi-family \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	2,452	3,933
Multi-family \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Commercial Real Estate
Loans Portfolio by Credit Risk Rating [Abstract]
Total	537,314	472,984
Commercial Real Estate \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	518,508	453,321
Commercial Real Estate \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	9,444	8,085
Commercial Real Estate \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	9,362	11,578
Commercial Real Estate \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Commercial and Industrial
Loans Portfolio by Credit Risk Rating [Abstract]
Total	87,575	46,285
Commercial and Industrial \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	86,110	43,314
Commercial and Industrial \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	540	540
Commercial and Industrial \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	925	2,431
Commercial and Industrial \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Construction and land development
Loans Portfolio by Credit Risk Rating [Abstract]
Total	13,021	12,907
Construction and land development \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	13,021	10,499
Construction and land development \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	2,408
Construction and land development \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Construction and land development \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Consumer
Loans Portfolio by Credit Risk Rating [Abstract]
Total	425	36
Consumer \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total	425	36
Consumer \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Consumer \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total	0	0
Consumer \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total	$ 0	$ 0

Equity Compensation Plans - Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Equity Compensation Plans
Award vesting period	3 years
Contractual term	10 years
Compensation expenses	$ 0	$ 0
Number of Options
Outstanding, beginning of period (in shares)	227,406
Exercised (in shares)	(10,614)
Forfeited (in shares)	(18,459)
Outstanding, end of period (in shares)	198,333	227,406
Weighted-Average Exercise Price Per Share
Outstanding, beginning of period (in dollars per share)	$ 9.50
Exercised (in dollars per share)	10.00
Forfeited (in dollars per share)	16.25
Outstanding, end of period (in dollars per share)	$ 8.85	$ 9.50
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding	$ 1,864	$ 2,298
Weighted Average Remaining Contractual Term
Weighted-average remaining contractual term, outstanding	1 year 2 months 8 days	2 years 5 months 12 days

Leases - Additional Information (Details) $ in Thousands	12 Months Ended
Leases - Additional Information (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Existence of Option to Extend [true false]	true
Lessee, Operating Lease, Existence of Option to Terminate [true false]	true
Operating lease liabilities	$ 10,899
Right-of-use assets	$ 10,193
Weighted average remaining lease term	7 years
Weighted average discount rate	4.50%
Total lease costs	$ 2,100
Minimum
Lessee, Lease, Description [Line Items]
Leases remaining terms	2 years
Maximum
Lessee, Lease, Description [Line Items]
Leases remaining terms	10 years
Renewal or termination options to extend the lease	5 years

Regulatory Matters (Tables)

12 Months Ended

Sep. 30, 2023

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Capital Amounts and Ratios

The following table sets forth the Bank’s actual and required capital amounts (in thousands) and ratios under current regulations:


									Minimum Capital				Minimum to Be Well
									Adequacy Requirement				Capitalized Under
					Minimum Capital				with Capital				Prompt Corrective
	Actual Capital				Adequacy Requirement				Conservation Buffer				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2023
Total capital to risk-weighted assets	$	205,786	14.60	%	$	112,755	8.00	%	$	147,991	10.50	%	$	140,944	10.00	%
Tier 1 capital to risk-weighted assets		190,928	13.55	%		84,566	6.00	%		119,802	8.50	%		112,755	8.00	%
Common equity tier 1 capital to risk-weighted assets		190,928	13.55	%		63,425	4.50	%		98,661	7.00	%		91,613	6.50	%
Tier 1 capital to average total assets		190,928	9.16	%		83,338	4.00	%		N/A	N/A			104,173	5.00	%

September 30, 2022
Total capital to risk-weighted assets	$	191,355	16.32	%	$	93,796	8.00	%	$	123,107	10.50	%	$	117,245	10.00	%
Tier 1 capital to risk-weighted assets		178,340	15.21	%		70,347	6.00	%		99,658	8.50	%		93,796	8.00	%
Common equity tier 1 capital to risk-weighted assets		178,340	15.21	%		52,760	4.50	%		82,071	7.00	%		76,209	6.50	%
Tier 1 capital to average total assets		178,340	10.90	%		65,429	4.00	%		N/A	N/A			81,786	5.00	%

Deposits (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Non-interest bearing
Demand	$ 185,731	$ 219,225
Interest-bearing
NOW	503,704	582,457
Money market	461,057	258,424
Savings	54,502	128,927
Time deposits $250,000 and greater	106,888	87,904
Time deposits less than $250,000	423,188	251,169
Total interest-bearing	1,549,339	1,308,881
Total deposits	1,735,070	$ 1,528,106
Maturities of Time Deposits
2024	489,975
2025	31,889
2026	2,930
2027	4,257
2028	776
Thereafter	249
Total	$ 530,076

Premises and Equipment

12 Months Ended

Sep. 30, 2023

Premises and Equipment [Abstract]

Premises and Equipment

Note 4. Premises and Equipment

The following table details the components of premises and equipment:


	September 30,
(in thousands)	2023		2022
Land	$	1,600	$	1,600
Buildings and improvements		10,868		10,862
Leasehold improvements		4,247		2,615
Furniture, fixtures and equipment		7,491		5,978
Construction in progress		—		111
		24,206		21,166
Less: Accumulated depreciation and amortization		(8,149)		(6,704)
Premises and equipment, net	$	16,057	$	14,462

Depreciation and amortization was $1.8 million and $1.7 million for the years ended September 30, 2023 and 2022, respectively.

Derivatives - Gains (losses) in AOCI (Details) - Cash flow hedge $ in Thousands	12 Months Ended
	Sep. 30, 2023 USD ($)
Derivative [Line Items]
Gain recognized in other comprehensive income	$ 348
Gain (loss) recognized in interest expense	$ 104

Subordinated Debentures

12 Months Ended

Sep. 30, 2023

Subordinated Borrowings [Abstract]

Subordinated Debentures

Note 8. Subordinated Debentures

In October 2020, the Company completed the private placement of $25.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 (the “Notes”) to certain qualified institutional buyers and accredited investors. The Notes bear interest, payable semi-annually, at the rate of 5.00% per annum, until October 15, 2025. From and including October 15, 2025 through maturity, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 487.4 basis points. The Company may, at its option, beginning with the interest payment date of October 15, 2025, but not generally prior thereto, and on any scheduled interest payment date thereafter, redeem the Notes, in whole or in part, subject to the receipt of any required regulatory approval. The Notes are not subject to redemption at the option of the holder. The portion of the proceeds of these subordinated notes contributed to the Bank are included as a component of the Bank’s Tier 1 capital for regulatory reporting.

At September 30, 2023 and 2022, the unamortized issuance costs of the Notes were $0.4 million and $0.4 million, respectively. For each of the years ended September 30, 2023 and 2022, $0.1 million of issuance costs were recorded in interest expense. The Notes are presented net of unamortized issuance costs in the Company’s Consolidated Statements of Financial Condition.

Summary of Significant Accounting Policies

12 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

HANOVER BANCORP, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Summary of Significant Accounting Policies

Nature of Operations

Hanover Bancorp, Inc. (the “Company”) is a New York corporation which is the holding company for Hanover Community Bank (the “Bank”). The Bank, headquartered in Mineola, New York, is a New York State chartered bank. The Bank commenced operations on November 4, 2008 and is a full-service bank providing personal and business lending and deposit services. As a New York State chartered, non-Federal Reserve member bank, the Bank is subject to regulation by the New York State Department of Financial Services (“DFS”) and the Federal Deposit Insurance Corporation. The Company is subject to regulation and examination by the Board of Governors of the FRB.

Basis of Presentation

Use of Estimates

Risks and Uncertainties

Significant Group Concentrations of Credit Risk

Cash and Cash Equivalents

Restrictions on Cash

Cash on hand or on deposit with the Federal Reserve Bank was required to meet regulatory reserve and clearing requirements.

Dividend Restriction

Banking regulations require maintaining certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to shareholders.

Investment Securities

Federal Home Loan Bank Stock

Loans Held for Sale

Loans and Loan Interest Income Recognition

Lending Risk

Allowance for Loan Losses

The allowance for loan losses consists of the following components:

As noted above, the adjustments to the Company’s loss experience is based on management’s evaluation of several environmental factors, including:

●

changes in the nature and volume of the Company’s portfolio and in the terms of the Company’s loans;

●

changes in the experience, ability, and depth of lending management and other relevant staff;

●

changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or graded loans;

●

changes in the quality of the Company’s loan review system;

●

changes in lending policies, procedures and strategies;

●

changes in the value of underlying collateral for collateral-dependent loans;

●

the existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

●

the effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the Company’s existing portfolio.

Servicing Rights

Transfers of Financial Assets

Foreclosed Assets

Premises and Equipment

Leases

Goodwill and Other Intangible Assets

Loan Commitments and Related Financial Instruments

Derivatives

Debt Issuance Costs

Earnings Per Share (“EPS”)

Series A Preferred Stock

Comprehensive Income

Loss Contingencies

Income Taxes

Fair Value Measurements

Revenue From Contracts With Customers

Operating Segments

Stock Compensation Plans

Supplemental Executive Retirement Plan

Adoption of New Accounting Standards

Standards Adopted in Fiscal Year 2023

Standards That Have Not Yet Been Adopted

Fair Value

12 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value

Note 16. Fair Value Measurements

FASB ASC No. 820-10 defines fair value as 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. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using appropriate valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. Accordingly, categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. As such, the fair value estimates may not be realized in an immediate transfer of the respective asset or liability.

FASB ASC 820-10 also establishes a fair value hierarchy and describes three levels of inputs that may be used to measure fair values. The three levels within the fair value hierarchy are as follows:

●

Level 1: Valuation is based upon unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

●

Level 2: Fair value is calculated using significant inputs other than quoted market prices that are directly or indirectly observable for the asset or liability. The valuation may rely on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, rate volatility, prepayment speeds, credit ratings) or inputs that are derived principally or corroborated by market data, by correlation, or other means.

●

Level 3: Inputs for determining the fair value of the respective assets or liabilities are not observable. Level 3 valuations are reliant upon pricing models and techniques that require significant management judgment or estimation.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Assets Measured at Fair Value on a Recurring Basis

The following table summarizes assets measured at fair value on a recurring basis:


	September 30, 2023
			Fair Value Measurements Using:
			Quoted Prices In				Significant
			Active Markets		Significant Other		Unobservable
	Carrying		for Identical Assets		Observable Inputs		Inputs
(in thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	142	$	—	$	142	$	—
Corporate bonds		10,747		—		10,747		—
Loan servicing rights		4,479		—		—		4,479
Derivatives		445		—		445		—
Total	$	15,813	$	—	$	11,334	$	4,479


	September 30, 2022
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	242	$	—	$	242	$	—
Corporate bonds		12,043		—		12,043		—
Loan servicing rights		4,353		—		—		4,353
Total	$	16,638	$	—	$	12,285	$	4,353

The fair value for the securities available-for-sale were obtained from an independent broker based upon matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. The Company has determined these are classified as Level 2 inputs within the fair value hierarchy.

Derivatives represent interest rate swaps for which the estimated fair values are based on valuation models using observable market data as of the measurement date resulting in a Level 2 classification.

The fair value of mortgage servicing rights are based on a valuation model that calculates the present value of estimated future servicing income. The valuation model utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income. Fair value of loan servicing rights related to residential mortgage loans at September 30, 2023 was determined based on discounted expected future cash flows using discount rates ranging from 12.9% to 15.4%, prepayment speed of 26.25% and a weighted average life ranging from 1.2 to 2.8 years. Fair value at September 30, 2022 for mortgage servicing rights was determined based on discounted expected future cash flows using discount rates ranging from 12.0% to 14.5%, prepayment speed of 26.25% and a weighted average life ranging from 1.2 to 3.0 years.

The fair value of loan servicing rights for SBA loans at September 30, 2023 was determined based on discounted expected future cash flows using discount rates ranging from 10.09% to 41.62%, prepayment speeds ranging from 8.29% to 29.26% and a weighted average life ranging from 1.17 to 5.81 years. The fair value of loan servicing rights for SBA loans at September 30, 2022 was determined based on discounted expected future cash flows using discount rates ranging from 5.78% to 26.72%, prepayment speeds ranging from 8.42% to 24.00% and a weighted average life ranging from 1.47 to 5.79 years.

The Company has determined these are mostly unobservable inputs and considers then Level 3 inputs within the fair value hierarchy.

The following table presents the changes in loan servicing rights for the periods presented:


	Year Ended September 30,
(in thousands)	2023		2022
Balance at beginning of period	$	4,353	$	3,690
Additions		893		1,158
Adjustment to fair value		(767)		(495)
Balance at end of period	$	4,479	$	4,353

Assets Measured at Fair Value on a Non-recurring Basis

There were no assets or liabilities measured at fair value on a non-recurring basis as of September 30, 2023 and 2022 and for the years then ended.

Financial Instruments Not Measured at Fair Value

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments not carried at fair value at September 30, 2023 and 2022:


	September 30, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	192,624	$	192,624	$	—	$	—	$	192,624
Securities held-to-maturity		4,108		—		3,760		—		3,760
Loans, net		1,859,876		—		—		1,798,916		1,798,916
Accrued interest receivable		10,636		—		729		9,907		10,636

Financial liabilities:
Time deposits		530,076		—		525,198		—		525,198
Demand and other deposits		1,204,994		1,204,994		—		—		1,204,994
Borrowings		179,849		—		176,693		—		176,693
Subordinated debentures		24,621		—		26,355		—		26,355
Accrued interest payable		1,821		53		1,768		—		1,821


	September 30, 2022
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	149,947	$	149,947	$	—	$	—	$	149,947
Securities held-to-maturity		4,414		—		4,095		—		4,095
Loans, net		1,610,687		—		—		1,549,171		1,549,171
Accrued interest receivable		8,546		—		219		8,327		8,546

Financial liabilities:
Time deposits		339,073		—		328,964		—		328,964
Demand and other deposits		1,189,033		1,189,033		—		—		1,189,033
Borrowings		101,752		—		99,597		—		99,597
Subordinated debentures		24,568		—		24,199		—		24,199
Accrued interest payable		915		1		914		—		915

- 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 + Details

Equity Compensation Plans - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Restricted Stock
Number of Shares
Unvested, beginning of period (in shares)	284,263
Granted (in shares)	50,580
Vested (in shares)	(72,160)
Forfeited (in shares)	(17,679)
Unvested, end of period (in shares)	245,004	284,263
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)	$ 19.78
Granted (in dollars per share)	19.73
Vested (in dollars per share)	19.96
Forfeited (in dollars per share)	19.86
Unvested, end of period (in dollars per share)	$ 19.71	$ 19.78
Compensation expenses	$ 1.7	$ 1.5
Unrealized compensation cost	$ 3.6
Weighted-average term for recognizing unrealized compensation cost	3 years 4 months 28 days
Total fair value of shares vested	$ 1.4	$ 0.9
Restricted Stock \| Five-year vesting period
Restricted Stock
Award vesting period	5 years
Number of Shares
Granted (in shares)	50,580
Restricted Stock Units (RSUs)
Restricted Stock
Award vesting period	3 years
Number of Shares
Unvested, beginning of period (in shares)	47,676
Granted (in shares)	0
Forfeited (in shares)	(9,405)
Unvested, end of period (in shares)	38,271	47,676
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)	$ 19.73
Forfeited (in dollars per share)	19.73
Unvested, end of period (in dollars per share)	$ 19.73	$ 19.73
Compensation expenses	$ 0.2	$ 0.2
Unrealized compensation cost	$ 0.3
Weighted-average term for recognizing unrealized compensation cost	1 year 4 months 20 days

Investment Securities - Securities Portfolio Presented by Contractual Maturity (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Securities Available for Sale, Amortized Cost [Abstract]
Five to ten years	$ 12,700
Amortized cost	13,022	$ 13,075
Securities Available for Sale, Fair Value [Abstract]
Five to ten years	10,747
Fair value	10,889	12,285
Securities Held to Maturity, Amortized Cost [Abstract]
Amortized cost	4,108	4,414
Securities Held to Maturity, Fair Value [Abstract]
Fair value	3,760	4,095
Debt Securities, Available-for-Sale and Held-to-Maturity, after Allowance for Credit Loss [Abstract]
Amortized cost	17,130
Fair value	14,649
Proceeds from sales	0	2,105
Gross realized gains on sales	0	105
Gross realized losses on sales	0	0
Total realized gains, net(1)	0	105
Associated income tax	0	24
U.S. GSE residential mortgage-backed securities
Securities Available for Sale, Amortized Cost [Abstract]
Without single maturity date	322
Amortized cost	322	375
Securities Available for Sale, Fair Value [Abstract]
Without single maturity date	142
Fair value	142	242
Securities Held to Maturity, Amortized Cost [Abstract]
Without single maturity date	1,531
Amortized cost	1,531	1,778
Securities Held to Maturity, Fair Value [Abstract]
Without single maturity date	1,353
Fair value	1,353	1,618
U.S. GSE commercial mortgage-backed securities
Securities Held to Maturity, Amortized Cost [Abstract]
Without single maturity date	2,577
Amortized cost	2,577	2,636
Securities Held to Maturity, Fair Value [Abstract]
Without single maturity date	2,407
Fair value	$ 2,407	$ 2,477

Related Party Transactions (Tables)

12 Months Ended

Sep. 30, 2023

Loans to Related Parties


(in thousands)
Beginning balance, October 1, 2022	$	2,736
New loans		1,000
Repayments		(884)
Ending balance, September 30, 2023	$	2,852

Loans - Activity in Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	$ 12,844	$ 8,552
Charge-offs	(1,693)	(158)
Recoveries	103
Provision (credit) for loan losses	3,432	4,450
Ending Balance	14,686	12,844
Residential Real Estate
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	3,951	4,155
Provision (credit) for loan losses	827	(204)
Ending Balance	4,778	3,951
Multi-family
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	4,308	2,433
Charge-offs	(959)	(66)
Provision (credit) for loan losses	857	1,941
Ending Balance	4,206	4,308
Commercial Real Estate
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	3,707	1,884
Provision (credit) for loan losses	(510)	1,823
Ending Balance	3,197	3,707
Commercial and Industrial
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	761	79
Charge-offs	(734)	(92)
Recoveries	103
Provision (credit) for loan losses	2,238	774
Ending Balance	2,368	761
Construction and land development
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	115
Provision (credit) for loan losses	(11)	115
Ending Balance	104	115
Consumer
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	2	1
Provision (credit) for loan losses	31	1
Ending Balance	$ 33	$ 2

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 15,164	$ 23,556
Unrealized losses on investment securities available for sale:
Change in unrealized loss on securities available for sale arising during the period, net of tax of ($293) and ($215), respectively	(1,050)	(795)
Reclassification adjustment for gains realized in net income, net of tax of $0 and $24, respectively		(81)
Net change in unrealized gains (losses) on securities available for sale	(1,050)	(876)
Unrealized gains on cash flow hedges:
Change in unrealized gain on cash flow hedges arising during the period, net of tax of $97 and $0, respectively	348
Total other comprehensive loss, net of tax	(702)	(876)
Total comprehensive income, net of tax	$ 14,462	$ 22,680

Fair Value - Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Carrying Amount
Financial Assets
Cash and cash equivalents	$ 192,624	$ 149,947
Securities held to maturity	4,108	4,414
Loans, net	1,859,876	1,610,687
Accrued interest receivable	10,636	8,546
Financial Liabilities
Time deposits	530,076	339,073
Demand and other deposits	1,204,994	1,189,033
Borrowings	179,849	101,752
Subordinated debentures	24,621	24,568
Accrued interest payable	1,821	915
As Adjusted
Financial Assets
Cash and cash equivalents	192,624	149,947
Securities held to maturity	3,760	4,095
Loans, net	1,798,916	1,549,171
Accrued interest receivable	10,636	8,546
Financial Liabilities
Time deposits	525,198	328,964
Demand and other deposits	1,204,994	1,189,033
Borrowings	176,693	99,597
Subordinated debentures	26,355	24,199
Accrued interest payable	1,821	915
As Adjusted \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets
Cash and cash equivalents	192,624	149,947
Securities held to maturity	0	0
Loans, net	0
Accrued interest receivable	0	0
Financial Liabilities
Time deposits	0	0
Demand and other deposits	1,204,994	1,189,033
Borrowings	0	0
Subordinated debentures	0
Accrued interest payable	53	1
As Adjusted \| Significant Other Observable Inputs (Level 2)
Financial Assets
Cash and cash equivalents	0	0
Securities held to maturity	3,760	4,095
Loans, net	0
Accrued interest receivable	729	219
Financial Liabilities
Time deposits	525,198	328,964
Demand and other deposits	0	0
Borrowings	176,693	99,597
Subordinated debentures	26,355	24,199
Accrued interest payable	1,768	914
As Adjusted \| Significant Unobservable Inputs (Level 3)
Financial Assets
Cash and cash equivalents	0	0
Securities held to maturity	0	0
Loans, net	1,798,916	1,549,171
Accrued interest receivable	9,907	8,327
Financial Liabilities
Time deposits	0	0
Demand and other deposits	0	0
Borrowings	0	0
Subordinated debentures	0
Accrued interest payable	$ 0	$ 0

Leases (Tables)

12 Months Ended

Sep. 30, 2023

Leases [Abstract]

Future undiscounted lease payments for operating leases


(dollars in thousands)
Years Ending September 30,
2024	$	2,149
2025		2,157
2026		1,988
2027		1,582
2028		1,372
Thereafter		3,494
Total undiscounted lease payments		12,742
Less: imputed interest		1,843
Net lease liability	$	10,899

Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Antidilutive stock options (in shares)	0	0
Earnings Per Share, Basic [Abstract]
Net income available to common stockholders	$ 15,164	$ 23,556
Less: Dividends paid and earnings allocated to participating securities	(561)	(903)
Income attributable to common stock	$ 14,603	$ 22,653
Weighted average common shares outstanding, including participating securities (in shares)	7,319,040	6,302,328
Less: Weighted average participating securities (in shares)	(278,211)	(237,259)
Weighted average common shares outstanding (in shares)	7,040,829	6,065,069
Basic EPS (in dollars per share)	$ 2.07	$ 3.74
Earnings Per Share, Diluted [Abstract]
Income attributable to common stock	$ 14,603	$ 22,653
Weighted average common shares outstanding (in shares)	7,040,829	6,065,069
Weighted average common equivalent shares outstanding (in shares)	80,118	92,977
Weighted average common and equivalent shares outstanding (in shares)	7,120,947	6,158,046
Diluted EPS (in dollars per share)	$ 2.05	$ 3.68

Loan Commitments and Other Related Activities (Tables)

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of contractual amounts of financial instruments with off-balance sheet risk


	September 30,
	2023				2022
(in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate

Standby letters of credit	$	488	$	—	$	817	$	—
Loan commitments outstanding		—		42,973		9,992		17,184
Unused lines of credit		4,561		72,078		—		45,920

Fair Value - Significant Inputs Utilized in Cash Flow Models (Details) - Significant Unobservable Inputs (Level 3)	Sep. 30, 2023 Y	Sep. 30, 2022 Y
Discount Rate \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	0.129	0.120
Discount Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.1009	0.0578
Discount Rate \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	0.154	0.145
Discount Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.4162	0.2672
Prepayment Rate
Fair Value Hierarchy
Servicing rights, measurement input	0.2625
Prepayment Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.0829	0.0842
Prepayment Rate \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input		0.2625
Prepayment Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.2926	0.2400
Weighted Average Life \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	1.2	1.2
Weighted Average Life \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	1.17	1.47
Weighted Average Life \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	2.8	3.0
Weighted Average Life \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	5.81	5.79

Goodwill and Other Intangible Assets - Gross Carrying Amount and Accumulated Amortization (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Other Intangible Assets, Net
Total	$ 327
Core Deposits
Other Intangible Assets, Net
Gross carrying amount	517	$ 517
Accumulated amortization	(190)	(118)
Total	$ 327	$ 399	$ 480
Weighted-average remaining life of other intangible assets	3 years 8 months 23 days

Summary of Significant Accounting Policies - Mortgage Servicing Rights (Details) - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Mortgage Servicing Rights [Abstract]
Mortgage servicing fee income	$ 2.0	$ 1.6

Derivatives - Additional Information (Details) $ in Thousands	Sep. 30, 2023 USD ($) derivative	Jun. 30, 2023 derivative
DERIVATIVES
Notional amount	$ 75,000
Cash flow hedge
DERIVATIVES
Notional amount	$ 75,000
Number of interest rate swaps \| derivative	2	1

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Stockholders' Equity Note [Abstract]
Cash dividends declared on common stock (in dollars per share)	$ 0.10	$ 0.10

Investment Securities - Investment Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Available for sale [Abstract]
Amortized cost	$ 13,022	$ 13,075
Gross unrealized gains
Gross unrealized losses	(2,133)	(790)
Fair value	10,889	12,285
Held to maturity [Abstract]
Amortized cost	4,108	4,414
Gross unrealized gains
Gross unrealized losses	(348)	(319)
Fair value	3,760	4,095
Investment Securities [Abstract]
Amortized cost	17,130
Fair value	14,649
Investment securities pledged to secure public deposits	14,997	16,699
Holdings of securities of any one issuer, other than securities issued by U.S. Government sponsored agencies, in amount greater than 10% of shareholders' equity	0	0
U.S. GSE residential mortgage-backed securities
Available for sale [Abstract]
Amortized cost	322	375
Gross unrealized gains
Gross unrealized losses	(180)	(133)
Fair value	142	242
Held to maturity [Abstract]
Amortized cost	1,531	1,778
Gross unrealized gains
Gross unrealized losses	(178)	(160)
Fair value	1,353	1,618
U.S. GSE commercial mortgage-backed securities
Held to maturity [Abstract]
Amortized cost	2,577	2,636
Gross unrealized gains
Gross unrealized losses	(170)	(159)
Fair value	2,407	2,477
Corporate Bonds
Available for sale [Abstract]
Amortized cost	12,700	12,700
Gross unrealized gains
Gross unrealized losses	(1,953)	(657)
Fair value	10,747	12,043
Asset Pledged as Collateral without Right [Member] \| Deposits
Investment Securities [Abstract]
Investment securities pledged to secure public deposits	$ 2,000	$ 1,800

Income Taxes

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Note 11. Income Taxes

The following table details the components of income tax expense:


	Year Ended September 30,
(in thousands)	2023		2022
Current:
Federal	$	2,997	$	5,081
State		830		540
Total current		3,827		5,621
Deferred:
Federal		1,135		1,055
State		260		735
Total deferred		1,395		1,790
Change in valuation allowance		(199)		(472)
Total income tax expense	$	5,023	$	6,939

The following table reflects a reconciliation of reported income tax expense to the amount that would result from applying the federal statutory rate of 21%:


	Year Ended September 30,
	2023				2022
			Percentage				Percentage
			of Pre-tax				of Pre-tax
(in thousands)	Amount		Earnings		Amount		Earnings
Federal income tax expense computed by applying the statutory rate to income before income taxes	$	4,239	21.0	%	$	6,404	21.0	%
State taxes, net of federal benefit		705	3.5	%		1,156	3.8	%
Salaries deduction limitation		31	0.2	%		—	—	%
Non-deductible expenses		2	—	%		(1)	—	%
Other		245	1.2	%		(148)	(0.5)	%
Change in valuation allowance		(199)	(1.0)	%		(472)	(1.5)	%
Income tax expense	$	5,023	24.9	%	$	6,939	22.8	%

The following table summarizes the composition of deferred tax assets and liabilities:


	September 30,
(in thousands)	2023		2022
Deferred tax assets:
Allowance for loan losses and other contingent liabilities	$	4,544	$	4,014
Operating lease liability		3,334		—
Net operating loss carryforwards		2,758		2,415
Compensation and related benefit obligations		1,278		1,323
Accrued SERP		1,081		1,062
Unrealized loss on securities AFS		463		170
Purchase accounting fair value adjustments		379		727
Organizational costs		12		63
Total deferred tax assets		13,849		9,774
Deferred tax liabilities:
Deferred fees and costs		(4,383)		(2,718)
Operating lease asset		(3,118)		—
Depreciation		(1,354)		(951)
Unrealized gain on derivatives		(97)		—
Mortgage servicing rights		(14)		(15)
Other		(149)		(158)
Total deferred tax liabilities		(9,115)		(3,842)
Total		4,734		5,932
Valuation allowance		(3,225)		(3,424)
Net deferred tax asset	$	1,509	$	2,508

The Company does not have net operating loss carryforwards available for federal income tax purposes as of September 30, 2023. The Company has net operating loss carryforwards available for state income tax purposes of approximately $35.1 million. For state purposes, $12.4 million expires in 2025 with the remaining balance of $22.7 million will begin to expire in 2036. The Company has net operating loss carryforwards for city income tax purposes of approximately $8.8 million, of which $0.5 million will expire in 2025 and the remaining balance of $8.3 million will begin to expire in 2037.

The Company has recorded a federal deferred tax asset as, based upon an analysis of the evidence, it is more likely than not that such federal deferred tax asset will be recoverable. In March of 2014, New York State adopted legislation that benefited small community banks with less than $8 billion in average assets. Specifically, this legislation provides for a state and city subtraction modification for which the Company qualifies. This subtraction modification causes the Company to consistently generate net operating losses for New York State and New York City purposes and it will continue to do so for the foreseeable future. Accordingly, the Company has recorded a valuation allowance against the New York State and New York City portions of the deferred tax asset, as it is not more likely than not that such deferred tax assets will be recoverable. Management reassesses the need for a valuation allowance on an annual basis, or more frequently if warranted.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of the states of Connecticut, New Jersey and New York and the city of New York. The Company is no longer subject to examination by taxing authorities for years before 2019. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination. The Company has no unrecorded tax benefits, and the Company does not expect the total amount of unrecognized income tax benefits to significantly increase in the next twelve months.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-13

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//740/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-14

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-21

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 270
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482526/740-270-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482685/740-10-50-17

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482603/740-30-50-2

+ Details

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	12 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
INTEREST INCOME
Loans	$ 97,560	$ 67,005
Taxable securities	806	484
Other interest income	6,677	940
Total interest income	105,043	68,429
INTEREST EXPENSE
Savings, NOW and money market deposits	32,647	3,166
Time deposits	11,204	2,209
Borrowings	6,700	1,800
Total interest expense	50,551	7,175
Net interest income	54,492	61,254
Provision for loan losses	3,432	4,450
Net interest income after provision for loan losses	51,060	56,804
NON-INTEREST INCOME
Total non-interest income	8,848	8,872
NON-INTEREST EXPENSE
Salaries and employee benefits	20,652	19,665
Occupancy and equipment	6,359	5,633
Data processing	1,951	1,629
Acquisition costs		250
Professional fees	3,145	2,568
Federal deposit insurance premiums	1,259	368
Other expenses	6,355	5,068
Non-interest expense	39,721	35,181
Income before income tax expense	20,187	30,495
Income tax expense	5,023	6,939
NET INCOME	$ 15,164	$ 23,556
Earnings Per Share
BASIC	$ 2.07	$ 3.74
DILUTED	$ 2.05	$ 3.68
Loan servicing and fee income
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	$ 2,709	$ 2,885
Service charges on deposit accounts
NON-INTEREST INCOME
Revenue from contracts with customers in the scope of ASC 606	275	232
Net gain on sale of loans held-for-sale
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	4,093	5,143
Net gain on sale of investments available-for-sale
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606		105
Other income
NON-INTEREST INCOME
Revenue from contracts with customers and revenue not included within the scope of ASC 606	$ 1,771	$ 507

Derivatives (Tables)

12 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments


	Year Ended September 30,
(in thousands)	2023		2022
Gain recognized in other comprehensive income	$	348	$	—
Gain (loss) recognized in interest expense		104		—

cash flow hedges included in the consolidated statements of financial condition

September 30, 2023

September 30, 2022

Fair

Notional

Value

Notional

Value

(in thousands)

Amount

Asset

Liability

Amount

Asset

Liability

Included in other assets/(liabilities):

Interest rate swaps related to Brokered Certificates of Deposit

75,000

445

—

Deposits

12 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Deposits

Note 6. Deposits

The following table details the components of deposits:


	September 30,
(in thousands)	2023		2022
Non-interest bearing:
Demand	$	185,731	$	219,225
Interest-bearing:
NOW		503,704		582,457
Money market		461,057		258,424
Savings		54,502		128,927
Time deposits $250,000 and greater		106,888		87,904
Time deposits less than $250,000		423,188		251,169
Total interest-bearing		1,549,339		1,308,881
Total deposits	$	1,735,070	$	1,528,106

The scheduled maturities of time deposits are as follows:


	September 30,
(in thousands)	2023
2024	$	489,975
2025		31,889
2026		2,930
2027		4,257
2028		776
Thereafter		249
Total	$	530,076

Goodwill and Other Intangible Assets

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 10. Goodwill and Other Intangible Assets

FASB ASC 350, Intangibles - Goodwill and Other, requires a company to perform an impairment test on goodwill annually, or more frequently if events or changes in circumstance indicate that the asset might be impaired, by comparing the fair value of such goodwill to its recorded or carrying amount. If the carrying amount of goodwill exceeds the fair value, an impairment charge must be recorded in an amount equal to the excess.

The following table presents activity for goodwill and other intangible assets, which consist of core deposit intangibles:


	September 30,
(in thousands)	2023		2022
Goodwill at beginning of period	$	19,168	$	19,168
Acquisition		—		—
Measurement period adjustment for previous acquisition		—		—
Goodwill at end of period	$	19,168	$	19,168
Other intangible assets at beginning of period	$	399	$	480
Acquisition		—		—
Amortization		(72)		(81)
Other intangible assets at end of period	$	327	$	399

The Company has identified the reporting unit for purposes of testing goodwill for impairment, the Bank, which is a component of the operating segment.

In assessing impairment, the Company has the option to perform a qualitative analysis to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of the reporting unit is less than its carrying amount. If, after assessing the totality of such events or circumstances, the Company determines it is not more likely than not that the fair value of the reporting unit is less than its carrying amount, then the Company would not be required to perform a quantitative impairment test.

Due to recent declines in bank stock prices and events impacting the banking industry, the Company performed a quantitative impairment analysis at August 31, 2023. The annual quantitative assessment of goodwill for the reporting unit was performed utilizing a discounted cash flow analysis (“income approach”) and estimates of selected market information (“market approaches”). The income approach measures the fair value of an interest in a business by discounting expected future cash flows to present value. The market approaches take into consideration fair values of comparable companies operating in similar lines of business that are potentially subject to similar economic and environmental factors and could be considered reasonable investment alternatives. The result of the income approach was weighted 50% and the results of the market approaches comprised the remaining 50% in determining the fair value of the reporting unit. The results of the annual quantitative impairment analysis indicated that the fair value exceeded the carrying value of the reporting unit.

No impairment charges were required to be recorded in the years ended September 30, 2023 and 2022.

The following table presents the gross carrying amount and accumulated amortization for the Company’s other intangible assets, which consist of core deposit intangibles:


	September 30,
(in thousands)	2023		2022
Gross carrying amount	$	517	$	517
Accumulated amortization		(190)		(118)
Net book value	$	327	$	399

At September 30, 2023, the weighted-average remaining life of the Company’s other intangible assets was 3.73 years.

The following table presents estimated future amortization expense for other intangible assets:


(in thousands)
2024	$	63
2025		55
2026		49
2027		43
2028		38
Thereafter		79
Total	$	327

Loans (Tables)

12 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Major Classifications of Loans


	September 30,
(in thousands)	2023		2022
Real estate:
Residential real estate	$	655,194	$	515,316
Multi-family		578,278		574,413
Commercial real estate		536,732		472,511
Commercial and industrial		85,450		45,758
Construction and land development		12,990		12,871
Consumer		336		22
Gross loans		1,868,980		1,620,891
Net deferred loan fees and costs		5,582		2,640
Total loans		1,874,562		1,623,531
Allowance for loan losses		(14,686)		(12,844)
Total loans, net	$	1,859,876	$	1,610,687

Carrying Amount for Purchased Credit Impaired Loans


	September 30,
	2023		2022
(in thousands)
Commercial real estate	$	—	$	602
Commercial and industrial		128		629
Total recorded investment	$	128	$	1,231

Loans modified as troubled debt restructurings


		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
(Dollars in thousands)	loans	Investment		Investment

Troubled Debt Restructurings:
Residential real estate	2	$	1,011	$	1,011

Activity in Allowance for Loan Losses by Portfolio Segment


	Year Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Charge-offs		—		(959)		—		(734)		—		—		(1,693)
Recoveries		—		—		—		103		—		—		103
Provision (credit) for loan losses		827		857		(510)		2,238		(11)		31		3,432
Ending Balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686


	Year Ended September 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	4,155	$	2,433	$	1,884	$	79	$	—	$	1	$	8,552
Charge-offs		—		(66)		—		(92)		—		—		(158)
Recoveries		—		—		—		—		—		—		—
Provision (credit) for loan losses		(204)		1,941		1,823		774		115		1		4,450
Ending Balance	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844

Allowance for Loan Losses and Recorded Investment by Portfolio Segment Based on Impairment Method

The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment evaluation method:


	September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		4,778		4,206		3,197		2,368		104		33		14,686
Purchased-credit impaired		—		—		—		—		—		—		—
Total allowance for loan losses	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Loans:
Individually evaluated for impairment	$	7,477	$	2,452	$	6,119	$	612	$	—	$	—	$	16,660
Collectively evaluated for impairment		649,855		576,443		531,195		86,835		13,021		425		1,857,774
Purchased-credit impaired		—		—		—		128		—		—		128
Total loans held for investment	$	657,332	$	578,895	$	537,314	$	87,575	$	13,021	$	425	$	1,874,562


	September 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and			and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		3,951		4,308		3,707		711		115		2		12,794
Purchased-credit impaired		—		—		—		50		—		—		50
Total allowance for loan losses	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Loans:
Individually evaluated for impairment	$	5,392	$	2,348	$	5,875	$	907	$	—	$	—	$	14,522
Collectively evaluated for impairment		510,866		572,713		466,507		44,749		12,907		36		1,607,778
Purchased-credit impaired		—		—		602		629		—		—		1,231
Total loans held for investment	$	516,258	$	575,061	$	472,984	$	46,285	$	12,907	$	36	$	1,623,531

Impaired Loans by Portfolio Segment


	September 30, 2023
	Unpaid						Interest		Average
	Principal		Recorded		Allowance		Income		Recorded
(in thousands)	Balance		Investment		Allocated		Recognized		Investment
With no related allowance recorded:
Residential real estate	$	7,484	$	7,477	$	—	$	105	$	4,243
Multi-family		3,282		2,452		—		3		2,489
Commercial real estate		6,118		6,119		—		—		5,761
Commercial and industrial		846		612		—		23		431
Total	$	17,730	$	16,660	$	—	$	131	$	12,924


	September 30, 2022
	Unpaid						Interest		Average
	Principal		Recorded		Allowance for		Income		Recorded
(in thousands)	Balance		Investment		Loan Losses		Recognized		Investment
With no related allowance recorded:
Real estate:
Residential	$	5,394	$	5,392	$	—	$	124	$	4,646
Multi-family		2,348		2,348		—		—		1,066
Commercial		5,950		5,875		—		—		3,627
Commercial and industrial		908		907		—		77		389
Total	$	14,600	$	14,522	$	—	$	201	$	9,728

Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment


(in thousands)	Past Due and Non-Accrual
	30 - 59		60 - 89		Greater than				Total past		Purchased
	Days		Days		89 Days				due and		Credit				Total
September 30, 2023	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Impaired⁽¹⁾		Current		Loans
Residential real estate	$	2,314	$	668	$	—	$	5,750	$	8,732	$	—	$	648,600	$	657,332
Multi-family		—		—		—		2,452		2,452		—		576,443		578,895
Commercial real estate		3,765		858		—		6,119		10,742		—		526,572		537,314
Commercial and industrial		1,444		—		—		612		2,056		128		85,391		87,575
Construction and land development		—		—		—		—		—		—		13,021		13,021
Consumer		—		—		—		—		—		—		425		425
Total	$	7,523	$	1,526	$	—	$	14,933	$	23,982	$	128	$	1,850,452	$	1,874,562

(1)	Purchased credit impaired loans at September 30, 2023 were greater than 89 days past due.


(in thousands)	Past Due and Non-Accrual
	30 - 59		60 - 89		Greater than				Total past		Purchased
	Days		Days		89 Days				due and		Credit				Total
September 30, 2022	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Impaired⁽¹⁾		Current		Loans
Residential real estate	$	961	$	351	$	—	$	3,151	$	4,463	$	—	$	511,795	$	516,258
Multi-family		—		—		—		2,348		2,348		—		572,713		575,061
Commercial real estate		936		—		—		5,875		6,811		602		465,571		472,984
Commercial and industrial		539		161		—		907		1,607		629		44,049		46,285
Construction and land development		—		—		—		—		—		—		12,907		12,907
Consumer		—		—		—		—		—		—		36		36
Total	$	2,436	$	512	$	—	$	12,281	$	15,229	$	1,231	$	1,607,071	$	1,623,531

(1)	Purchased credit impaired loans at September 30, 2022 were greater than 89 days past due.

Loan Portfolio Based on Internal Rating Category


	September 30, 2023
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	648,012	$	756	$	8,564	$	—	$	657,332
Multi-family		576,443		—		2,452		—		578,895
Commercial		518,508		9,444		9,362		—		537,314
Commercial and industrial		86,110		540		925		—		87,575
Construction and land development		13,021		—		—		—		13,021
Consumer		425		—		—		—		425
Total	$	1,842,519	$	10,740	$	21,303	$	—	$	1,874,562


	September 30, 2022
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	512,595	$	512	$	3,151	$	—	$	516,258
Multi-family		571,128		—		3,933		—		575,061
Commercial		453,321		8,085		11,578		—		472,984
Commercial and industrial		43,314		540		2,431		—		46,285
Construction and land development		10,499		2,408		—		—		12,907
Consumer		36		—		—		—		36
Total	$	1,590,893	$	11,545	$	21,093	$	—	$	1,623,531

Income Taxes - Components of Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Current
Federal	$ 2,997	$ 5,081
State	830	540
Total current	3,827	5,621
Deferred
Federal	1,135	1,055
State	260	735
Total deferred	1,395	1,790
Change in valuation allowance	(199)	(472)
Total income tax expense	$ 5,023	$ 6,939

Earnings Per Share

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Note 18. Earnings Per Share

The two-class method is used in the calculation of basic and diluted earnings per share (“EPS”). Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared and participation rights in undistributed earnings. The restricted stock awards granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities.

The Company’s basic and diluted EPS calculations are presented in the following table:


	Year Ended September 30,
(in thousands, except share and per share data)	2023		2022

Net income available to common stockholders	$	15,164	$	23,556
Less: Dividends paid and earnings allocated to participating securities		(561)		(903)
Income attributable to common stock	$	14,603	$	22,653
Weighted average common shares outstanding, including participating securities		7,319,040		6,302,328
Less: Weighted average participating securities		(278,211)		(237,259)
Weighted average common shares outstanding		7,040,829		6,065,069
Basic EPS	$	2.07	$	3.74

Income attributable to common stock	$	14,603	$	22,653
Weighted average common shares outstanding		7,040,829		6,065,069
Weighted average common equivalent shares outstanding		80,118		92,977
Weighted average common and equivalent shares outstanding		7,120,947		6,158,046
Diluted EPS	$	2.05	$	3.68

There were no stock options that were antidilutive at September 30, 2023 and 2022.

Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Loans and Leases Receivable, Related Parties
Beginning balance	$ 2,736
New loans	1,000
Repayments	(884)
Ending balance	2,852
Deposits from principal officers, directors and affiliates	$ 28,500	$ 12,800

Summary of Significant Accounting Policies - Supplemental Executive Retirement Plan (Details)	12 Months Ended
	Sep. 30, 2023 item
Supplemental Executive Retirement Plan [Abstract]
Number of former executives benefited	2

Parent Company Only Condensed Financial Information (Tables)

12 Months Ended

Sep. 30, 2023

Parent Company Only Condensed Financial Information [Abstract]

Balance Sheets


	September 30,
(in thousands)	2023		2022
ASSETS
Cash and due from banks	$	729	$	304
Investment in Bank		209,554		197,290
Other assets		845		141
Total Assets	$	211,128	$	197,735

LIABILITIES AND STOCKHOLDERS' EQUITY
Subordinated debentures	$	24,621	$	24,568
Accrued interest payable		573		573
Accrued expenses and other liabilities		27		10
Total Liabilities		25,221		25,151
Total Stockholders' Equity		185,907		172,584
Total Liabilities and Stockholders' Equity	$	211,128	$	197,735

Statements of Income


	Year Ended September 30,
(in thousands)	2023		2022
Dividends received from Bank	$	5,300	$	400
Interest expense		(1,304)		(1,331)
Non-interest expense		(159)		(18)
Income (loss) before income taxes and equity in undistributed earnings of the Bank		3,837		(949)
Income tax benefit		232		253
Equity in undistributed earnings of the Bank		11,095		24,252
Net income	$	15,164	$	23,556

Statements of Cash Flows


	Year Ended September 30,
(in thousands)	2023		2022
Cash flows from operating activities:
Net income	$	15,164	$	23,556
Adjustments to reconcile net income to net cash used in operating activities:
Equity in undistributed earnings of the Bank		(11,095)		(24,252)
Amortization of debt issuance costs		53		55
(Increase) decrease in other assets		(704)		909
Decrease in accrued interest payable		—		(3)
Decrease in other liabilities		—		(191)
Net cash provided by operating activities		3,418		74

Cash flows from investing activities:
Investment in Bank		—		(26,000)
Net cash used in investing activities		—		(26,000)

Cash flows from financing activities:
Proceeds from exercise of stock options		106		—
Net proceeds from issuance of common stock		—		27,729
Payments related to tax withholding for equity awards		(170)		(28)
Cash dividends paid		(2,929)		(2,042)
Net cash (used in) provided by financing activities		(2,993)		25,659

Net increase (decrease) in cash and due from banks		425		(267)
Cash and due from banks, beginning of period		304		571
Cash and due from banks, end of period	$	729	$	304

Income Taxes (Tables)

12 Months Ended

Sep. 30, 2023

Income Tax Disclosure [Abstract]

Components of Income Tax Expense


	Year Ended September 30,
(in thousands)	2023		2022
Current:
Federal	$	2,997	$	5,081
State		830		540
Total current		3,827		5,621
Deferred:
Federal		1,135		1,055
State		260		735
Total deferred		1,395		1,790
Change in valuation allowance		(199)		(472)
Total income tax expense	$	5,023	$	6,939

Reconciliation of Reported Income Tax Expense


	Year Ended September 30,
	2023				2022
			Percentage				Percentage
			of Pre-tax				of Pre-tax
(in thousands)	Amount		Earnings		Amount		Earnings
Federal income tax expense computed by applying the statutory rate to income before income taxes	$	4,239	21.0	%	$	6,404	21.0	%
State taxes, net of federal benefit		705	3.5	%		1,156	3.8	%
Salaries deduction limitation		31	0.2	%		—	—	%
Non-deductible expenses		2	—	%		(1)	—	%
Other		245	1.2	%		(148)	(0.5)	%
Change in valuation allowance		(199)	(1.0)	%		(472)	(1.5)	%
Income tax expense	$	5,023	24.9	%	$	6,939	22.8	%

Composition of Deferred Tax Assets and Liabilities


	September 30,
(in thousands)	2023		2022
Deferred tax assets:
Allowance for loan losses and other contingent liabilities	$	4,544	$	4,014
Operating lease liability		3,334		—
Net operating loss carryforwards		2,758		2,415
Compensation and related benefit obligations		1,278		1,323
Accrued SERP		1,081		1,062
Unrealized loss on securities AFS		463		170
Purchase accounting fair value adjustments		379		727
Organizational costs		12		63
Total deferred tax assets		13,849		9,774
Deferred tax liabilities:
Deferred fees and costs		(4,383)		(2,718)
Operating lease asset		(3,118)		—
Depreciation		(1,354)		(951)
Unrealized gain on derivatives		(97)		—
Mortgage servicing rights		(14)		(15)
Other		(149)		(158)
Total deferred tax liabilities		(9,115)		(3,842)
Total		4,734		5,932
Valuation allowance		(3,225)		(3,424)
Net deferred tax asset	$	1,509	$	2,508

Parent Company Only Condensed Financial Information, Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
ASSETS [Abstract]
Cash and due from banks	$ 5,496	$ 9,934
Other assets	5,588	3,565
TOTAL ASSETS	2,149,535	1,840,058
LIABILITIES AND STOCKHOLDERS' EQUITY [Abstract]
Subordinated debentures	24,621	24,568
Accrued interest payable	1,821	915
TOTAL LIABILITIES	1,963,628	1,667,474
TOTAL STOCKHOLDERS' EQUITY	185,907	172,584	$ 122,529
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	2,149,535	1,840,058
Parent Company [Member]
ASSETS [Abstract]
Cash and due from banks	729	304
Investment in Bank	209,554	197,290
Other assets	845	141
TOTAL ASSETS	211,128	197,735
LIABILITIES AND STOCKHOLDERS' EQUITY [Abstract]
Subordinated debentures	24,621	24,568
Accrued interest payable	573	573
Accrued expenses and other liabilities	27	10
TOTAL LIABILITIES	25,221	25,151
TOTAL STOCKHOLDERS' EQUITY	185,907	172,584
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 211,128	$ 197,735

Summary of Significant Accounting Policies - Operating Segments (Details)	12 Months Ended
	Sep. 30, 2023 segment
Operating Segments [Abstract]
Number of operating segment	1

Accumulated Other Comprehensive (Loss) Income

12 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive (Loss) Income

Note 19. Accumulated Other Comprehensive (Loss) Income

The following presents changes in accumulated other comprehensive (loss) income by component, net of tax, for the years ended September 30, 2023 and 2022:


	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at October 1, 2022	$	(620)	$	—	$	(620)
Other comprehensive (loss) income, before reclassification		(1,050)		348		(702)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive (loss) income		(1,050)		348		(702)
Balance at September 30, 2023	$	(1,670)	$	348	$	(1,322)



	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at October 1, 2021	$	256	$	—	$	256
Other comprehensive loss, before reclassification		(795)		—		(795)
Amount reclassified from accumulated other comprehensive income		(81)		—		(81)
Net current period other comprehensive loss		(876)		—		(876)
Balance at September 30, 2022	$	(620)	$	—	$	(620)

The following represents the reclassification out of accumulated other comprehensive (loss) income for the years ended September 30, 2023 and 2022:


	Year Ended
	September 30,				Affected Line Item in Consolidated
(in thousands)	2023		2022		Statements of Income
Unrealized gains and losses on available-for-sale securities
Realized gains on securities available-for-sale	$	—	$	105	Gain on sale of investment securities available-for-sale, net
Tax effect		—		24	Income tax expense
Net of tax	$	—	$	81

Gains and losses on cash flow hedges
Interest rate contracts	$	—	$	—	Interest income (expense)
Tax effect		—		—	Income tax (expense) or benefit
Net of tax	$	—	$	—

Total reclassifications for the period, net of tax	$	—	$	81

Income Taxes - Reconciliation of Reported Income Tax Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Effective Income Tax Rate Reconciliation, Amount
Federal income tax expense computed by applying the statutory rate to income before income taxes	$ 4,239	$ 6,404
State taxes, net of federal benefit	705	1,156
Salaries deduction limitation	31
Non-deductible transaction costs	2	(1)
Other	245	(148)
Change in valuation allowance	(199)	(472)
Total income tax expense	$ 5,023	$ 6,939
Effective Income Tax Rate Reconciliation, Percent of Pre-tax Earnings
Federal income tax expense computed by applying the statutory rate to income before income taxes	21.00%	21.00%
State taxes, net of federal benefit	3.50%	3.80%
Salaries deduction limitation	0.20%
Other	1.20%	(0.50%)
Change in valuation allowance	(1.00%)	(1.50%)
Income tax expense	24.90%	22.80%

Summary of Significant Accounting Policies - Premises and Equipment (Details)	Sep. 30, 2023
Buildings [Member]
Premises and Equipment [Abstract]
Useful lives	39 years
Furniture, Fixtures and Equipment [Member] \| Minimum
Premises and Equipment [Abstract]
Useful lives	2 years
Furniture, Fixtures and Equipment [Member] \| Maximum
Premises and Equipment [Abstract]
Useful lives	10 years

Goodwill and Other Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Estimated Future Amortization Expense for Other Intangible Assets
2024	$ 63
2025	55
2026	49
2027	43
2028	38
Thereafter	79
Total	$ 327

Accumulated Other Comprehensive (Loss) Income - Reclassification Out of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Unrealized gains and losses on available-for-sale securities
Tax effect	$ 0	$ 24
Total reclassifications for the period, net of tax		81
Amount Reclassified from Accumulated Other Comprehensive Income [Member] \| Unrealized Gains and Losses on Available-for-Sale Debt Securities
Unrealized gains and losses on available-for-sale securities
Realized gains on securities available-for-sale		105
Tax effect		24
Net of tax		81
Total reclassifications for the period, net of tax		$ 81

Investment Securities (Tables)

12 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investment Securities Available for Sale and Held to Maturity


	September 30, 2023
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	322	$	—	$	(180)	$	142
Corporate bonds		12,700		—		(1,953)		10,747
Total available for sale securities	$	13,022	$	—	$	(2,133)	$	10,889

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
	Cost		Gains		Losses		Fair Value
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,531	$	—	$	(178)	$	1,353
U.S. GSE commercial mortgage-backed securities		2,577		—		(170)		2,407
Total held to maturity securities	$	4,108	$	—	$	(348)	$	3,760


	September 30, 2022
			Gross		Gross
	Amortized		Unrealized		Unrealized
(in thousands)	Cost		Gains		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	375	$	—	$	(133)	$	242
Corporate bonds		12,700		—		(657)		12,043
Total available for sale securities	$	13,075	$	—	$	(790)	$	12,285

			Gross		Gross
	Amortized		Unrecognized		Unrecognized
	Cost		Gains		Losses		Fair Value
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,778	$	—	$	(160)	$	1,618
U.S. GSE commercial mortgage-backed securities		2,636		—		(159)		2,477
Total held to maturity securities	$	4,414	$	—	$	(319)	$	4,095

Securities Portfolio by Contractual Maturity


	September 30, 2023
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Five to ten years	$	12,700	$	10,747
U.S. GSE residential mortgage-backed securities		322		142
Total securities available for sale		13,022		10,889
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,531		1,353
U.S. GSE commercial mortgage-backed securities		2,577		2,407
Total securities held to maturity		4,108		3,760
Total investment securities	$	17,130	$	14,649

Realized gains and losses from the sale of investment securities


	Year Ended September 30,
(in thousands)	2023		2022
Proceeds from sales	$	—	$	2,105
Gross realized gains on sales	$	—	$	105
Gross realized losses on sales		—		—
Total realized gains, net⁽¹⁾	$	—	$	105

(1)	Amount does not include associated income tax of $0 and $24 for year ended September 30, 2023 and 2022, respectively.

Gross unrealized and unrecognized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized or unrecognized loss position


	September 30, 2023
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	142	$	(180)	5	$	142	$	(180)
Corporate bonds		1,080		(120)		9,667		(1,833)	7		10,747		(1,953)
Total available-for-sale	$	1,080	$	(120)	$	9,809	$	(2,013)	12	$	10,889	$	(2,133)

	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrecognized				Unrecognized		Number of			Unrecognized
	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Held-to-maturity:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	1,353	$	(178)	4	$	1,353	$	(178)
U.S. GSE commercial mortgage-backed securities		—		—		2,407		(170)	1		2,407		(170)
Total held-to-maturity	$	—	$	—	$	3,760	$	(348)	5	$	3,760	$	(348)


	September 30, 2022
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	152	$	(126)	$	90	$	(7)	6	$	242	$	(133)
Corporate bonds		10,843		(657)		—		—	6		10,843		(657)
Total available-for-sale	$	10,995	$	(783)	$	90	$	(7)	12	$	11,085	$	(790)

	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrecognized				Unrecognized		Number of			Unrecognized
	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Held-to-maturity:
U.S. GSE residential mortgage-backed securities	$	1,618	$	(160)	$	—	$	—	4	$	1,618	$	(160)
U.S. GSE commercial mortgage-backed securities		2,477		(159)		—		—	1		2,477		(159)
Total held-to-maturity	$	4,095	$	(319)	$	—	$	—	5	$	4,095	$	(319)

Loans - Troubled Debt Restructurings (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2023 USD ($) loan	Sep. 30, 2022 USD ($) loan
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of recorded loans classified as TDR's \| loan	6	7
Recorded investment in TDRs	$ 1,700	$ 2,300
Specific reserves allocated to troubled debt restructurings	0	0
Commitments to lend additional funds in troubled debt restructurings	$ 0	$ 0
TDR's with subsequent payment default \| loan	0	0
Threshold period for payment default	90 days
Increase in the allowance for loan losses, troubled debt restructurings	$ 0
Charge-offs, troubled debt restructurings	$ 0
Residential Real Estate
Financing Receivable, Troubled Debt Restructuring [Line Items]
Number of recorded loans classified as TDR's \| loan	2
Pre-Modification Outstanding Recorded Investment	$ 1,011
Post-Modification Outstanding Recorded Investment	$ 1,011

Equity Compensation Plans - Stock Option Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share-Based Payment Arrangement [Abstract]
Intrinsic value of options exercised	$ 103
Cash received from option exercises	106	$ 0
Tax benefit from option exercises	$ 36

Equity Compensation Plans - 2021 and 2018 Equity Compensation Plans (Details)	Sep. 30, 2023 shares
2021 Plan
Equity Compensation Plans
Number of common shares approved for issuance (in shares)	427,500
Number of shares available for issuance (in shares)	276,127
2018 Plan
Equity Compensation Plans
Number of common shares approved for issuance (in shares)	346,000
Number of shares available for issuance (in shares)	21,784

Loan Commitments and Other Related Activities - Contractual amounts of financial instruments with off-balance sheet risk (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Standby Letters of Credit
Loss Contingencies [Line Items]
Fixed rate loan commitments amount	$ 488	$ 817
Loan Commitments Outstanding
Loss Contingencies [Line Items]
Fixed rate loan commitments amount		9,992
Variable rate loan commitments amount	$ 42,973	17,184
Commitments, maximum period for loans	180 days
Unused Lines of Credit
Loss Contingencies [Line Items]
Fixed rate loan commitments amount	$ 4,561
Variable rate loan commitments amount	$ 72,078	$ 45,920
Maximum \| Loan Commitments Outstanding
Loss Contingencies [Line Items]
Loan commitments, interest rate	7.50%
Fixed rate loan commitments, maturities	30 years
Minimum \| Loan Commitments Outstanding
Loss Contingencies [Line Items]
Loan commitments, interest rate	4.75%
Fixed rate loan commitments, maturities	10 years

Deposits (Tables)

12 Months Ended

Sep. 30, 2023

Deposits [Abstract]

Components of Deposits


	September 30,
(in thousands)	2023		2022
Non-interest bearing:
Demand	$	185,731	$	219,225
Interest-bearing:
NOW		503,704		582,457
Money market		461,057		258,424
Savings		54,502		128,927
Time deposits $250,000 and greater		106,888		87,904
Time deposits less than $250,000		423,188		251,169
Total interest-bearing		1,549,339		1,308,881
Total deposits	$	1,735,070	$	1,528,106

Maturities of Time Deposits


	September 30,
(in thousands)	2023
2024	$	489,975
2025		31,889
2026		2,930
2027		4,257
2028		776
Thereafter		249
Total	$	530,076

- Definition

Tabular disclosure of type of deposit liability.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Publisher SEC

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (1)
-Publisher SEC

Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (2)
-Publisher SEC

Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (3)
-Publisher SEC

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (4)
-Publisher SEC

Reference 6: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (a)
-Subparagraph (5)
-Publisher SEC

Reference 7: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (c)
-Publisher SEC

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (d)
-Publisher SEC

Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (e)
-Publisher SEC

Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (1)
-Publisher SEC

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)
-Publisher SEC

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)
-Publisher SEC

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(ii)
-Publisher SEC

Reference 14: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iii)
-Publisher SEC

Reference 15: http://www.xbrl.org/2009/role/commonPracticeRef
-Name Regulation S-K (SK)
-Number 229
-Section 1406
-Paragraph (f)
-Subparagraph (2)(i)(iv)
-Publisher SEC

+ Details

Revenue from Contracts with Customers

12 Months Ended

Sep. 30, 2023

Revenue from Contracts with Customers [Abstract]

Revenue from Contracts with Customers

Note 20. Revenue from Contracts with Customers

All of the Company’s revenue from contracts with customers in the scope of ASC 606 is recognized within Non-Interest Income. The following table presents the Company’s sources of non-interest income. Items outside the scope of ASC 606 are noted as such.


	Year Ended September 30,
(in thousands)	2023		2022
Loan servicing and fee income⁽¹⁾	$	2,709	$	2,885
Service charges on deposit accounts		275		232
Net gain on sale of loans held-for-sale⁽¹⁾		4,093		5,143
Net gain on sale of investments available-for-sale⁽¹⁾		—		105
Other income⁽²⁾		1,771		507
Total non-interest income	$	8,848	$	8,872

(1)	Not included within the scope of ASC 606

(2)

Other income includes merchant card processing fees of $47 and $33 for the year ended September 30, 2023 and 2022, respectively, which are included in the scope of ASC 606 and loan related fee income, recoveries on acquired loans and miscellaneous income totaling $1,724 and $474 for 2023 and 2022, respectively, which are not included in the scope of ASC 606. The Company settled ongoing litigation and received a settlement payment of $975 in 2023.

A description of the Company’s revenue streams included in the scope of ASC 606 is as follows:

Service Charges on Deposit Accounts: The Company earns fees from its deposit customers for transaction-based, account maintenance, and overdraft services. Service-based fees, which include services such as ATM use fees, stop payment charges, wire transfers, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Company fulfills its performance obligation to the customer. Account maintenance fees, which primarily relate to monthly maintenance, are earned over the course of a month, representing the period over which the Company satisfies its performance obligation. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on customer accounts are withdrawn from the customer’s account balance.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-9

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-10

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 15
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-15

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 12
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-12

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 606
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479806/606-10-50-13

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Name Accounting Standards Codification
-Topic 606
-Publisher FASB
-URI https://asc.fasb.org//606/tableOfContent

+ Details

Regulatory Matters

12 Months Ended

Sep. 30, 2023

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

REGULATORY MATTERS

Note 15. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action. The effects of accumulated other comprehensive income or loss is not included in computing regulatory capital. Management believes as of September 30, 2023, the Bank meets all capital adequacy requirements to which it is subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized or worse, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2023 and 2022, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Under a policy of the Federal Reserve applicable to bank holding companies with less than $3.0 billion in consolidated assets, the Company is not subject to consolidated regulatory capital requirements.

The following table sets forth the Bank’s actual and required capital amounts (in thousands) and ratios under current regulations:


									Minimum Capital				Minimum to Be Well
									Adequacy Requirement				Capitalized Under
					Minimum Capital				with Capital				Prompt Corrective
	Actual Capital				Adequacy Requirement				Conservation Buffer				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2023
Total capital to risk-weighted assets	$	205,786	14.60	%	$	112,755	8.00	%	$	147,991	10.50	%	$	140,944	10.00	%
Tier 1 capital to risk-weighted assets		190,928	13.55	%		84,566	6.00	%		119,802	8.50	%		112,755	8.00	%
Common equity tier 1 capital to risk-weighted assets		190,928	13.55	%		63,425	4.50	%		98,661	7.00	%		91,613	6.50	%
Tier 1 capital to average total assets		190,928	9.16	%		83,338	4.00	%		N/A	N/A			104,173	5.00	%

September 30, 2022
Total capital to risk-weighted assets	$	191,355	16.32	%	$	93,796	8.00	%	$	123,107	10.50	%	$	117,245	10.00	%
Tier 1 capital to risk-weighted assets		178,340	15.21	%		70,347	6.00	%		99,658	8.50	%		93,796	8.00	%
Common equity tier 1 capital to risk-weighted assets		178,340	15.21	%		52,760	4.50	%		82,071	7.00	%		76,209	6.50	%
Tier 1 capital to average total assets		178,340	10.90	%		65,429	4.00	%		N/A	N/A			81,786	5.00	%

Dividend restrictions - The Company’s principal source of funds for dividend and debt service payments is dividends received from the Bank. During 2023 the Bank paid $5.3 million in cash dividends to the Holding Company. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2023, the Bank had $53.0 million of retained net income available for dividends to the Company, without obtaining regulatory approval.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

Parent Company Only Condensed Financial Information, Statements of Cash Flows (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities [Abstract]
Net income	$ 15,164	$ 23,556
Adjustments to reconcile net income to net cash used in operating activities [Abstract]
Amortization of debt issuance costs	53	55
Decrease (increase) in other assets	(1,768)	(5)
(Decrease) increase in accrued interest payable	906	(375)
Increase (decrease) in other liabilities	(264)	160
Net cash provided by operating activities	16,401	25,081
Cash flows from investing activities [Abstract]
Net cash used in investing activities	(256,360)	(374,146)
Cash flows from financing activities [Abstract]
Proceeds from exercise of stock options	106	0
Net proceeds from issuance of common stock	0	27,729
Payments related to tax withholding for equity awards	(170)	(28)
Payments of Ordinary Dividends, Common Stock	2,929	2,042
Net cash provided by financing activities	282,636	332,468
Increase (decrease) in cash and cash equivalents	42,677	(16,597)
Cash and cash equivalents, beginning of period	149,947	166,544
Cash and cash equivalents, end of period	192,624	149,947
Parent Company [Member]
Cash flows from operating activities [Abstract]
Net income	15,164	23,556
Adjustments to reconcile net income to net cash used in operating activities [Abstract]
Equity in undistributed earnings of the bank	(11,095)	(24,252)
Amortization of debt issuance costs	53	55
Decrease (increase) in other assets	(704)	909
(Decrease) increase in accrued interest payable	0	(3)
Increase (decrease) in other liabilities	0	(191)
Net cash provided by operating activities	3,418	74
Cash flows from investing activities [Abstract]
Investment in Bank	0	(26,000)
Net cash used in investing activities	0	(26,000)
Cash flows from financing activities [Abstract]
Proceeds from exercise of stock options	106	0
Net proceeds from issuance of common stock	0	27,729
Payments related to tax withholding for equity awards	(170)	(28)
Payments of Ordinary Dividends, Common Stock	2,929	2,042
Net cash provided by financing activities	(2,993)	25,659
Increase (decrease) in cash and cash equivalents	425	(267)
Cash and cash equivalents, beginning of period	304	571
Cash and cash equivalents, end of period	$ 729	$ 304

Income Taxes - Composition of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Deferred tax assets
Allowance for loan losses and other contingent liabilities	$ 4,544	$ 4,014
Operating lease liability	3,334	0
Net operating loss carryforwards	2,758	2,415
Compensation and related benefit obligations	1,278	1,323
Accrued SERP	1,081	1,062
Purchase accounting fair value adjustments	379	727
Unrealized loss on securities AFS	463	170
Organizational costs	12	63
Total deferred tax assets	13,849	9,774
Deferred tax liabilities
Deferred loan fees/costs	(4,383)	(2,718)
Operating lease asset	(3,118)	0
Depreciation	(1,354)	(951)
Unrealized gain on derivatives	(97)	0
Mortgage servicing rights	(14)	(15)
Other	(149)	(158)
Total deferred tax liabilities	(9,115)	(3,842)
Total	4,734	5,932
Valuation allowance	(3,225)	(3,424)
Net deferred tax asset	$ 1,509	$ 2,508

Fair Value - Changes in Loan Servicing Rights (Details) - Mortgage Servicing Rights - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Changes in Mortgage Servicing Rights.
Beginning balance	$ 4,353	$ 3,690
Additions	893	1,158
Adjustment to fair value	(767)	(495)
Ending balance	$ 4,479	$ 4,353

Income Taxes - Net Operating Loss Carryforwards (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Federal
Net Operating Loss Carryforwards
Net operating loss carryforwards	$ 0
State
Net Operating Loss Carryforwards
Net operating loss carryforwards	35,100
State \| Expires in 2025
Net Operating Loss Carryforwards
Net operating loss carryforwards	12,400
State \| Expiration starting in 2036
Net Operating Loss Carryforwards
Net operating loss carryforwards	22,700
City
Net Operating Loss Carryforwards
Net operating loss carryforwards	8,800
City \| Expires in 2025
Net Operating Loss Carryforwards
Net operating loss carryforwards	500
City \| Expiration starting in 2037
Net Operating Loss Carryforwards
Net operating loss carryforwards	$ 8,300

Parent Company Only Condensed Financial Information

12 Months Ended

Sep. 30, 2023

Parent Company Only Condensed Financial Information [Abstract]

Parent Company Only Condensed Financial Information

Note 17. Parent Company Only Condensed Financial Information

Condensed parent company only financial statements of Hanover Bancorp, Inc. are as follows:

Condensed Balance Sheets


	September 30,
(in thousands)	2023		2022
ASSETS
Cash and due from banks	$	729	$	304
Investment in Bank		209,554		197,290
Other assets		845		141
Total Assets	$	211,128	$	197,735

LIABILITIES AND STOCKHOLDERS' EQUITY
Subordinated debentures	$	24,621	$	24,568
Accrued interest payable		573		573
Accrued expenses and other liabilities		27		10
Total Liabilities		25,221		25,151
Total Stockholders' Equity		185,907		172,584
Total Liabilities and Stockholders' Equity	$	211,128	$	197,735

Condensed Statements of Income


	Year Ended September 30,
(in thousands)	2023		2022
Dividends received from Bank	$	5,300	$	400
Interest expense		(1,304)		(1,331)
Non-interest expense		(159)		(18)
Income (loss) before income taxes and equity in undistributed earnings of the Bank		3,837		(949)
Income tax benefit		232		253
Equity in undistributed earnings of the Bank		11,095		24,252
Net income	$	15,164	$	23,556

Condensed Statements of Cash Flows


	Year Ended September 30,
(in thousands)	2023		2022
Cash flows from operating activities:
Net income	$	15,164	$	23,556
Adjustments to reconcile net income to net cash used in operating activities:
Equity in undistributed earnings of the Bank		(11,095)		(24,252)
Amortization of debt issuance costs		53		55
(Increase) decrease in other assets		(704)		909
Decrease in accrued interest payable		—		(3)
Decrease in other liabilities		—		(191)
Net cash provided by operating activities		3,418		74

Cash flows from investing activities:
Investment in Bank		—		(26,000)
Net cash used in investing activities		—		(26,000)

Cash flows from financing activities:
Proceeds from exercise of stock options		106		—
Net proceeds from issuance of common stock		—		27,729
Payments related to tax withholding for equity awards		(170)		(28)
Cash dividends paid		(2,929)		(2,042)
Net cash (used in) provided by financing activities		(2,993)		25,659

Net increase (decrease) in cash and due from banks		425		(267)
Cash and due from banks, beginning of period		304		571
Cash and due from banks, end of period	$	729	$	304

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Other comprehensive (loss) income, net of tax:
Change in unrealized loss on investment securities available for sale, tax	$ (293)	$ (215)
Reclassification adjustment for gains realized in net income, tax	0	24
Change in unrealized gain on cash flow hedges arising during the period, net of tax	$ 97	$ 0

Borrowings - Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Federal Home Loan Bank Advances
FHLB term borrowings outstanding, fixed rate	$ 126,700	$ 37,800
Total FHLB advances	175,665	92,800
Borrowings	179,849	$ 101,752
FHLB term borrowings, rate		2.48%
Available additional borrowings	291,200
Overnight borrowings
Federal Home Loan Bank Advances
Total FHLB advances	$ 49,000	$ 55,000
FHLB term borrowings, rate	5.59%	3.29%

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Securities:
Held to maturity, fair value	$ 3,760	$ 4,095
STOCKHOLDERS' EQUITY
Preferred stock, Series A, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Series A, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, Series A, shares issued (in shares)	150,000	0
Preferred stock, Series A, shares outstanding (in shares)	150,000	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	17,000,000	17,000,000
Common stock, shares issued (in shares)	7,170,419	7,285,648
Common stock, shares outstanding (in shares)	7,170,419	7,285,648

Equity Compensation Plans

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity Compensation Plans

Note 12. Equity Compensation Plans

The Company’s 2021 and 2018 Equity Compensation Plans (the “2021 Plan” and the “2018 Plan”, respectively), provide for the grant of stock-based compensation awards to members of management, including employees and management officials, and members of the Board. Under the 2021 Plan, a total of 427,500 shares of the Company’s common stock or equivalents were approved for issuance, of which 276,127 shares remain available for issuance at September 30, 2023. Of the total 346,000 shares of common stock approved for issuance under the 2018 Plan, 21,784 shares remain available for issuance at September 30, 2023.

Stock Options

Stock options are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant, and generally with vesting periods of three years and contractual terms of ten years. All stock options fully vest upon a change in control.

The fair value of stock options is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the common stock of the Company’s peers. The Company uses historical data to estimate option exercise and post-vesting termination behavior. Expected terms are based on historical data and represent the periods in which the options are expected to be outstanding. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

A summary of stock option activity follows (aggregate intrinsic value in thousands):


						Weighted
		Weighted				Average
		Average		Aggregate		Remaining
	Number of	Exercise		Intrinsic		Contractual
	Options	Price		Value		Term
Outstanding, October 1, 2022	227,406	$	9.50	$	2,298	2.45 years
Granted	—		—
Exercised	(10,614)		10.00
Forfeited	(18,459)		16.25
Outstanding, September 30, 2023 ⁽¹⁾	198,333	$	8.85	$	1,864	1.19 years

(1)	All outstanding options are fully vested and exercisable

The following table presents information related to the stock option plan for the periods presented:


	Year Ended September 30,
(in thousands)	2023		2022
Intrinsic value of options exercised	$	103	$	—
Cash received from option exercises		106		—
Tax benefit from option exercises		36		—

There was no compensation expense attributable to stock options for the years ended September 30, 2023 and 2022, respectively.

Restricted Stock Awards

During the year ended September 30, 2023, restricted stock awards of 50,580 shares were granted with a five-year vesting period. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date.

A summary of restricted stock awards activity follows:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2022	284,263	$	19.78
Granted	50,580		19.73
Vested	(72,160)		19.96
Forfeited	(17,679)		19.86
Unvested, September 30, 2023	245,004	$	19.71

Compensation expense attributable to restricted stock awards was $1.7 million and $1.5 million for the years ended September 30, 2023 and 2022, respectively. As of September 30, 2023, there was $3.6 million of total unrealized compensation cost related to unvested restricted stock, expected to be recognized over a weighted-average term of 3.41 years. The total fair value of shares vested during the years ended September 30, 2023 and 2022 was $1.4 million and $0.9 million, respectively.

Restricted Stock Units

Long Term Incentive Plan

Restricted stock units (“RSU”s) represent an obligation to deliver shares to a grantee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule and the satisfaction of performance conditions and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may accrue dividends from the date of grant.

The following table summarizes the unvested performance-based RSU activity for the year ended September 30, 2023:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2022	47,676	$	19.73
Granted	—		—
Vested	—		—
Forfeited	(9,405)		19.73
Unvested, September 30, 2023	38,271	$	19.73

No RSUs were granted during the year ended September 30, 2023. Performance-based RSUs granted in 2022 cliff vest after three years and are subject to the achievement of the Company's pre-defined performance goals for the three-year period ending December 31, 2024.

Compensation expense attributable to RSUs was $0.2 million for the years ended September 30, 2023 and 2022. As of September 30, 2023, there was $0.3 million of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 1.39 years.

Fair Value - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Financial Assets
Available for sale, at fair value	$ 10,889	$ 12,285
Loan servicing rights	4,479	4,353
Derivatives	445
U.S. GSE residential mortgage-backed securities
Financial Assets
Available for sale, at fair value	142	242
Corporate Bonds
Financial Assets
Available for sale, at fair value	10,747	12,043
Recurring \| Carrying Amount
Financial Assets
Loan servicing rights	4,479
Derivatives	445
Total	15,813	16,638
Recurring \| Carrying Amount \| U.S. GSE residential mortgage-backed securities
Financial Assets
Available for sale, at fair value	142	242
Recurring \| Carrying Amount \| Corporate Bonds
Financial Assets
Available for sale, at fair value	10,747	12,043
Recurring \| Carrying Amount \| Loan servicing rights
Financial Assets
Loan servicing rights		4,353
Recurring \| Estimate of Fair Value Measurement [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets
Loan servicing rights	0
Derivatives	0
Total	0	0
Recurring \| Estimate of Fair Value Measurement [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Available for sale, at fair value	0	0
Recurring \| Estimate of Fair Value Measurement [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate Bonds
Financial Assets
Available for sale, at fair value	0	0
Recurring \| Estimate of Fair Value Measurement [Member] \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Loan servicing rights
Financial Assets
Loan servicing rights		0
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Other Observable Inputs (Level 2)
Financial Assets
Loan servicing rights	0
Derivatives	445
Total	11,334	12,285
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Other Observable Inputs (Level 2) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Available for sale, at fair value	142	242
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Other Observable Inputs (Level 2) \| Corporate Bonds
Financial Assets
Available for sale, at fair value	10,747	12,043
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Other Observable Inputs (Level 2) \| Loan servicing rights
Financial Assets
Loan servicing rights		0
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Unobservable Inputs (Level 3)
Financial Assets
Loan servicing rights	4,479
Derivatives	0
Total	4,479	4,353
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Unobservable Inputs (Level 3) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Available for sale, at fair value	0	0
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Unobservable Inputs (Level 3) \| Corporate Bonds
Financial Assets
Available for sale, at fair value	$ 0	0
Recurring \| Estimate of Fair Value Measurement [Member] \| Significant Unobservable Inputs (Level 3) \| Loan servicing rights
Financial Assets
Loan servicing rights		$ 4,353

Subsequent Events (Details) - $ / shares		12 Months Ended
Subsequent Events (Details) - $ / shares	Oct. 26, 2023	Sep. 30, 2023	Sep. 30, 2022	Oct. 05, 2023
Subsequent Event [Line Items]
Cash dividends declared on common stock (in dollars per share)		$ 0.10	$ 0.10
Subsequent Event
Subsequent Event [Line Items]
Cash dividends declared on common stock (in dollars per share)	$ 0.10
Cash dividends declared on preferred stock (in dollars per share)	$ 0.10
Subsequent Event \| Share Repurchase Program
Subsequent Event [Line Items]
Common stock issued				366,050
Percentage of outstanding common stock, Share Repuchase Program				5.00%

Borrowings

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Borrowings

Note 7. Borrowings

Federal Home Loan Bank (“FHLB”) Advances

At September 30, 2023 and 2022, FHLB term borrowings outstanding were $126.7 million and $37.8 million, respectively, all of which were fixed rate.

At September 30, 2023 and 2022, the Company had FHLB overnight borrowings outstanding of $49.0 million and $55.0 million at the rate of 5.59% and 3.29%, respectively.

The following table sets forth the contractual maturities in the next five years of the balance sheet date and weighted average interest rates of the Company’s fixed rate FHLB advances (dollars in thousands):


	Balance at September 30,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	49,000	5.59	%

2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		126,665	3.65	%
Total FHLB advances	$	175,665	4.19	%


	Balance at September 30,
	2022
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	55,000	3.29	%

2023, rates from 0.37% to 2.96%		11,860	2.23	%
2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
Total term advances		37,800	1.30	%
Total FHLB advances	$	92,800	2.48	%

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. The advances were collateralized by residential and commercial mortgage loans under a blanket lien arrangement at September 30, 2023 and 2022, respectively. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to an additional total of $291.2 million at September 30, 2023.

Federal Reserve Borrowings

At September 30, 2023 and 2022, the Company’s borrowings from the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) were $4.1 million and $9.0 million, respectively. The borrowings have a rate of 0.35% and the maturity date will equal the maturity date of the underlying PPP loan pledged to secure the extension of credit.

Correspondent Bank Borrowings

At September 30, 2023, approximately $92 million in unsecured lines of credit extended by correspondent banks were available to be utilized for short-term funding purposes. No borrowings were outstanding under lines of credit with correspondent banks at September 30, 2023 and 2022.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//470/tableOfContent

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1C

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1E

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1I

+ Details

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
ASSETS
Cash and non-interest-bearing deposits due from banks	$ 5,496	$ 9,934
Interest-bearing deposits due from banks	186,614	139,559
Federal funds sold	514	454
Total cash and cash equivalents	192,624	149,947
Securities:
Held to maturity (fair value of $3,760 and $4,095, respectively)	4,108	4,414
Available for sale, at fair value	10,889	12,285
Total securities	14,997	16,699
Loans	1,874,562	1,623,531
Allowance for loan losses	(14,686)	(12,844)
Loans, net	1,859,876	1,610,687
Premises and equipment, net	16,057	14,462
Operating lease assets	10,193
Accrued interest receivable	10,636	8,546
Prepaid post retirement plan	3,534	3,444
Stock in Federal Home Loan Bank ("FHLB"), at cost	10,547	6,280
Goodwill	19,168	19,168
Other intangible assets	327	399
Loan servicing rights	4,479	4,353
Deferred income taxes, net	1,509	2,508
Other assets	5,588	3,565
TOTAL ASSETS	2,149,535	1,840,058
Deposits:
Non-interest-bearing demand	185,731	219,225
Savings, NOW and money market	1,019,263	969,808
Time	530,076	339,073
Total deposits	1,735,070	1,528,106
Borrowings	179,849	101,752
Subordinated debentures	24,621	24,568
Operating lease liabilities	10,899
Accrued interest payable	1,821	915
Other liabilities	11,368	12,133
TOTAL LIABILITIES	1,963,628	1,667,474
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY
Preferred stock, Series A (par value $0.01; 15,000,000 shares authorized; issued and outstanding 150,000 and none, respectively)	2,963
Common stock (par value $0.01; 17,000,000 shares authorized; issued and outstanding 7,170,419 and 7,285,648, respectively)	72	73
Surplus	125,501	126,656
Retained earnings	58,693	46,475
Accumulated other comprehensive loss, net of tax	(1,322)	(620)
TOTAL STOCKHOLDERS' EQUITY	185,907	172,584
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,149,535	$ 1,840,058

Borrowings - Federal Reserve Borrowings and Correspondent Bank Borrowings (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
Borrowings
Short-term Debt	$ 179,849	$ 101,752
Unsecured Debt
Borrowings
Line of credit available for borrowing	92,000
Borrowings outstanding	0	0
PPPLF
Borrowings
Short-term Debt	$ 4,100	$ 9,000
Borrowing rate of interest	0.35%	0.35%

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details)	Sep. 30, 2023
Core Deposits
Goodwill and Other Intangible Assets [Abstract]
Estimated useful life of intangible assets	10 years

Investment Securities - Gross Unrealized Losses and Fair Values of Investment Securities (Details)	12 Months Ended
	Sep. 30, 2023 USD ($) security	Sep. 30, 2022 USD ($) security
Available for sale [Abstract]
Less than 12 months, Fair value	$ 1,080,000	$ 10,995,000
Less than 12 months, Gross unrealized losses	(120,000)	(783,000)
12 months or longer, Fair value	9,809,000	90,000
12 months or longer, Gross unrealized losses	$ (2,013,000)	$ (7,000)
Number of securities \| security	12	12
Total, Fair value	$ 10,889,000	$ 11,085,000
Total, Gross unrealized losses	(2,133,000)	(790,000)
Held to maturity [Abstract]
Less than 12 months, Fair value		4,095,000
Less than 12 months, Gross unrealized losses		$ (319,000)
12 months or longer, Fair value	3,760,000
12 months or longer, Gross unrealized losses	$ (348,000)
Number of securities \| security	5	5
Total, Fair value	$ 3,760,000	$ 4,095,000
Total, Gross unrealized losses	(348,000)	(319,000)
Other than temporary impairment loss recognized on any securities	0	0
U.S. GSE residential mortgage-backed securities \| Residential Mortgage-Backed Securities [Member]
Available for sale [Abstract]
Less than 12 months, Fair value		152,000
Less than 12 months, Gross unrealized losses		(126,000)
12 months or longer, Fair value	142,000	90,000
12 months or longer, Gross unrealized losses	$ (180,000)	$ (7,000)
Number of securities \| security	5	6
Total, Fair value	$ 142,000	$ 242,000
Total, Gross unrealized losses	(180,000)	(133,000)
Held to maturity [Abstract]
12 months or longer, Fair value	1,353,000
12 months or longer, Gross unrealized losses	$ (178,000)
Number of securities \| security	4
Total, Fair value	$ 1,353,000
Total, Gross unrealized losses	(178,000)
U.S. GSE commercial mortgage-backed securities \| Commercial Mortgage Backed Securities
Held to maturity [Abstract]
Less than 12 months, Fair value		2,477,000
Less than 12 months, Gross unrealized losses		$ (159,000)
12 months or longer, Fair value	2,407,000
12 months or longer, Gross unrealized losses	$ (170,000)
Number of securities \| security	1	1
Total, Fair value	$ 2,407,000	$ 2,477,000
Total, Gross unrealized losses	(170,000)	(159,000)
Corporate Bonds
Available for sale [Abstract]
Less than 12 months, Fair value	1,080,000	10,843,000
Less than 12 months, Gross unrealized losses	(120,000)	$ (657,000)
12 months or longer, Fair value	9,667,000
12 months or longer, Gross unrealized losses	$ (1,833,000)
Number of securities \| security	7	6
Total, Fair value	$ 10,747,000	$ 10,843,000
Total, Gross unrealized losses	$ (1,953,000)	(657,000)
Corporate Bonds \| Residential Mortgage-Backed Securities [Member]
Held to maturity [Abstract]
Less than 12 months, Fair value		1,618,000
Less than 12 months, Gross unrealized losses		$ (160,000)
Number of securities \| security		4
Total, Fair value		$ 1,618,000
Total, Gross unrealized losses		$ (160,000)

Goodwill and Other Intangible Assets - Activity for Goodwill and Other Intangible Assets (Details) - USD ($)	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Goodwill
Goodwill at beginning of period	$ 19,168,000	$ 19,168,000
Acquisition	0	0
Goodwill at end of period	19,168,000	19,168,000
Other Intangible Assets
Amortization	(72,000)	(81,000)
Other intangible assets at end of period	327,000
Impairment of Intangible Assets
Impairment charges	0	0
Core Deposits
Other Intangible Assets
Other intangible assets at beginning of period	399,000	480,000
Acquisition	0	0
Amortization	(72,000)	(81,000)
Other intangible assets at end of period	$ 327,000	$ 399,000

Revenue from Contracts with Customers (Tables)

12 Months Ended

Sep. 30, 2023

Revenue from Contracts with Customers [Abstract]

Sources of Non-Interest Income


	Year Ended September 30,
(in thousands)	2023		2022
Loan servicing and fee income⁽¹⁾	$	2,709	$	2,885
Service charges on deposit accounts		275		232
Net gain on sale of loans held-for-sale⁽¹⁾		4,093		5,143
Net gain on sale of investments available-for-sale⁽¹⁾		—		105
Other income⁽²⁾		1,771		507
Total non-interest income	$	8,848	$	8,872

(1)	Not included within the scope of ASC 606

(2)

Loans

12 Months Ended

Sep. 30, 2023

Receivables [Abstract]

Loans

Note 3. Loans

The following table sets forth the major classifications of loans:


	September 30,
(in thousands)	2023		2022
Real estate:
Residential real estate	$	655,194	$	515,316
Multi-family		578,278		574,413
Commercial real estate		536,732		472,511
Commercial and industrial		85,450		45,758
Construction and land development		12,990		12,871
Consumer		336		22
Gross loans		1,868,980		1,620,891
Net deferred loan fees and costs		5,582		2,640
Total loans		1,874,562		1,623,531
Allowance for loan losses		(14,686)		(12,844)
Total loans, net	$	1,859,876	$	1,610,687

The Company’s Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”), loans outstanding, included in commercial and industrial (“C&I”) loans in the table above, totaled $4.8 million and $10.2 million at September 30, 2023 and 2022, respectively. SBA loans of $1.0 million and $4.9 million included in commercial real estate and C&I loans, respectively, in the table above were sold as of September 30, 2023 and settled in early October 2023.

As of September 30, 2023 and 2022, the Company was servicing approximately $255.7 million and $246.0 million, respectively, of loans for others. In the years ended September 30, 2023 and 2022, the Company sold approximately $51.8 million and $80.3 million, respectively, of loans and recognized gains on the sales of loans of $4.1 million and $5.1 million, respectively.

Purchased Credit Impaired Loans

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount for those loans at September 30, 2023 and 2022 is as follows:


	September 30,
	2023		2022
(in thousands)
Commercial real estate	$	—	$	602
Commercial and industrial		128		629
Total recorded investment	$	128	$	1,231

The Company has recorded an allowance for loan losses of $0 and $50 thousand related to these loans at September 30, 2023 and 2022, respectively. During the year ended September 30, 2023, two purchased credit impaired loans acquired in the Savoy Bank acquisition totaling $457 thousand were charged off to the allowance for loan losses.

The Company continuously monitors the credit quality of its loan receivables. Credit quality is monitored by reviewing certain credit quality indicators. Management has determined that internally assigned credit risk ratings by loan segment are the key credit quality indicators that best assist management in monitoring the credit quality of the Company’s loan receivables.

The Company has adopted a credit risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a credit risk rating to each loan in their portfolio at origination. When the lender learns of important financial developments, the risk rating is reviewed and adjusted if necessary. In addition, the Company engages a third-party independent loan reviewer that performs quarterly reviews of a sample of loans, validating the credit risk ratings assigned to such loans. The credit risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for loan losses.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention: The loan has potential weaknesses that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard: The loan is inadequately protected by current sound worth and paying capacity of the obligor or collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: The loan has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above are considered to be pass rated loans.

The following tables represent loans categorized by class and internally assigned risk grades.


	September 30, 2023
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	648,012	$	756	$	8,564	$	—	$	657,332
Multi-family		576,443		—		2,452		—		578,895
Commercial		518,508		9,444		9,362		—		537,314
Commercial and industrial		86,110		540		925		—		87,575
Construction and land development		13,021		—		—		—		13,021
Consumer		425		—		—		—		425
Total	$	1,842,519	$	10,740	$	21,303	$	—	$	1,874,562


	September 30, 2022
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	512,595	$	512	$	3,151	$	—	$	516,258
Multi-family		571,128		—		3,933		—		575,061
Commercial		453,321		8,085		11,578		—		472,984
Commercial and industrial		43,314		540		2,431		—		46,285
Construction and land development		10,499		2,408		—		—		12,907
Consumer		36		—		—		—		36
Total	$	1,590,893	$	11,545	$	21,093	$	—	$	1,623,531

Past Due and Nonaccrual Loans

The following table represents the aging of the recorded investment in past due and non-accrual loans as of September 30, 2023 and 2022 by portfolio segment:


(in thousands)	Past Due and Non-Accrual
	30 - 59		60 - 89		Greater than				Total past		Purchased
	Days		Days		89 Days				due and		Credit				Total
September 30, 2023	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Impaired⁽¹⁾		Current		Loans
Residential real estate	$	2,314	$	668	$	—	$	5,750	$	8,732	$	—	$	648,600	$	657,332
Multi-family		—		—		—		2,452		2,452		—		576,443		578,895
Commercial real estate		3,765		858		—		6,119		10,742		—		526,572		537,314
Commercial and industrial		1,444		—		—		612		2,056		128		85,391		87,575
Construction and land development		—		—		—		—		—		—		13,021		13,021
Consumer		—		—		—		—		—		—		425		425
Total	$	7,523	$	1,526	$	—	$	14,933	$	23,982	$	128	$	1,850,452	$	1,874,562

(1)	Purchased credit impaired loans at September 30, 2023 were greater than 89 days past due.


(in thousands)	Past Due and Non-Accrual
	30 - 59		60 - 89		Greater than				Total past		Purchased
	Days		Days		89 Days				due and		Credit				Total
September 30, 2022	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Impaired⁽¹⁾		Current		Loans
Residential real estate	$	961	$	351	$	—	$	3,151	$	4,463	$	—	$	511,795	$	516,258
Multi-family		—		—		—		2,348		2,348		—		572,713		575,061
Commercial real estate		936		—		—		5,875		6,811		602		465,571		472,984
Commercial and industrial		539		161		—		907		1,607		629		44,049		46,285
Construction and land development		—		—		—		—		—		—		12,907		12,907
Consumer		—		—		—		—		—		—		36		36
Total	$	2,436	$	512	$	—	$	12,281	$	15,229	$	1,231	$	1,607,071	$	1,623,531

(1)	Purchased credit impaired loans at September 30, 2022 were greater than 89 days past due.

The following table presents information related to impaired loans by portfolio segment as of and for the years ended September 30, 2023 and 2022:


	September 30, 2023
	Unpaid						Interest		Average
	Principal		Recorded		Allowance		Income		Recorded
(in thousands)	Balance		Investment		Allocated		Recognized		Investment
With no related allowance recorded:
Residential real estate	$	7,484	$	7,477	$	—	$	105	$	4,243
Multi-family		3,282		2,452		—		3		2,489
Commercial real estate		6,118		6,119		—		—		5,761
Commercial and industrial		846		612		—		23		431
Total	$	17,730	$	16,660	$	—	$	131	$	12,924


	September 30, 2022
	Unpaid						Interest		Average
	Principal		Recorded		Allowance for		Income		Recorded
(in thousands)	Balance		Investment		Loan Losses		Recognized		Investment
With no related allowance recorded:
Real estate:
Residential	$	5,394	$	5,392	$	—	$	124	$	4,646
Multi-family		2,348		2,348		—		—		1,066
Commercial		5,950		5,875		—		—		3,627
Commercial and industrial		908		907		—		77		389
Total	$	14,600	$	14,522	$	—	$	201	$	9,728

Accrual basis income recognized on impaired loans approximates cash basis income. The recorded investment in loans excludes accrued interest receivable due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.

Troubled Debt Restructurings

A restructuring constitutes a troubled debt restructuring when the restructuring includes a concession by the Bank and the borrower is experiencing financial difficulty. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. The Company has six and seven loans that are classified as a troubled debt restructurings at September 30, 2023 and 2022 with a total recorded investment of $1.7 million and $2.3 million, respectively.

The Company has not allocated any specific reserves for these loans at September 30, 2023 and 2022. The Company had no commitment to lend additional funds to these debtors at September 30, 2023 and 2022.

There are no troubled debt restructurings for which there was a payment default during 2023 and 2022 for loans that were modified during the twelve- month period prior to default. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

There were no new troubled debt restructurings recorded for the year ended September 30, 2023.

The following table presents loans modified as troubled debt restructurings that occurred during the year ended September 30, 2022:


		Pre-Modification		Post-Modification
		Outstanding		Outstanding
	Number of	Recorded		Recorded
(Dollars in thousands)	loans	Investment		Investment

Troubled Debt Restructurings:
Residential real estate	2	$	1,011	$	1,011

There was no increase in the allowance for loan losses and no charge-offs during the year ended September 30, 2022 for the troubled debt restructurings described above.

The following tables represent the activity in the allowance for loan losses by portfolio segment for the years ended September 30, 2023 and 2022:


	Year Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Charge-offs		—		(959)		—		(734)		—		—		(1,693)
Recoveries		—		—		—		103		—		—		103
Provision (credit) for loan losses		827		857		(510)		2,238		(11)		31		3,432
Ending Balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686


	Year Ended September 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	4,155	$	2,433	$	1,884	$	79	$	—	$	1	$	8,552
Charge-offs		—		(66)		—		(92)		—		—		(158)
Recoveries		—		—		—		—		—		—		—
Provision (credit) for loan losses		(204)		1,941		1,823		774		115		1		4,450
Ending Balance	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844

The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment evaluation method:


	September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		4,778		4,206		3,197		2,368		104		33		14,686
Purchased-credit impaired		—		—		—		—		—		—		—
Total allowance for loan losses	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Loans:
Individually evaluated for impairment	$	7,477	$	2,452	$	6,119	$	612	$	—	$	—	$	16,660
Collectively evaluated for impairment		649,855		576,443		531,195		86,835		13,021		425		1,857,774
Purchased-credit impaired		—		—		—		128		—		—		128
Total loans held for investment	$	657,332	$	578,895	$	537,314	$	87,575	$	13,021	$	425	$	1,874,562


	September 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and			and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		3,951		4,308		3,707		711		115		2		12,794
Purchased-credit impaired		—		—		—		50		—		—		50
Total allowance for loan losses	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Loans:
Individually evaluated for impairment	$	5,392	$	2,348	$	5,875	$	907	$	—	$	—	$	14,522
Collectively evaluated for impairment		510,866		572,713		466,507		44,749		12,907		36		1,607,778
Purchased-credit impaired		—		—		602		629		—		—		1,231
Total loans held for investment	$	516,258	$	575,061	$	472,984	$	46,285	$	12,907	$	36	$	1,623,531

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities:
Net income	$ 15,164	$ 23,556
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses	3,432	4,450
Depreciation and amortization	1,812	1,663
Amortization of right-of-use assets	1,608	0
Net gain on sale of securities available-for-sale	0	(105)
Stock-based compensation	1,871	1,684
Net gain on sale of loans held-for-sale	(4,093)	(5,143)
Net accretion of premiums, discounts and loan fees and costs	(748)	(3,570)
Amortization of intangible assets	72	81
Amortization of debt issuance costs	53	55
Loan servicing rights valuation adjustments	767	495
Deferred tax expense	1,196	1,318
(Increase) decrease in accrued interest receivable	(2,090)	817
Increase in other assets	(1,768)	(5)
Increase (decrease) in accrued interest payable	906	(375)
Increase (decrease) in other liabilities	(264)	160
Payments on operating leases	(1,517)	0
Net cash provided by operating activities	16,401	25,081
Cash flows from investing activities:
Purchases of securities available-for-sale	0	(8,000)
Purchases of restricted securities	(4,267)	(2,566)
Proceeds from sales of securities available-for-sale	0	2,105
Principal repayments of securities held to maturity	302	4,191
Principal repayments of securities available-for-sale	50	335
Proceeds from sales of loans	50,359	85,420
Net increase in loans	(299,397)	(454,509)
Purchases of premises and equipment	(3,407)	(1,122)
Net cash used in investing activities	(256,360)	(374,146)
Cash flows from financing activities:
Net increase in deposits	207,472	364,519
Proceeds from term FHLB advances	100,725	0
Repayments of term FHLB advances	(11,800)	(4,000)
Repayments of Federal Reserve Bank borrowings	(4,768)	(108,710)
(Repayments) proceeds of other short-term borrowings, net	(6,000)	55,000
Payments related to tax withholding for equity awards	(170)	(28)
Payments of Ordinary Dividends, Common Stock	2,929	2,042
Net proceeds from issuance of common stock	0	27,729
Proceeds from exercise of stock options	106	0
Net cash provided by financing activities	282,636	332,468
Increase (decrease) in cash and cash equivalents	42,677	(16,597)
Cash and cash equivalents, beginning of period	149,947	166,544
Cash and cash equivalents, end of period	192,624	149,947
Supplemental cash flow information:
Interest paid	49,645	7,550
Income taxes paid	4,404	6,466
Supplemental non-cash disclosure:
Transfers from portfolio loans to loans held-for-sale	51,816	80,277
Preferred stock issued in exchange for common stock	2,963	0
Lease liabilities arising from obtaining right-of-use assets	1,791	0
Other assets received in satisfaction of a loan	$ 844	$ 0

Derivatives - Credit-Risk-Related Contingent Features (Details) $ in Millions	Sep. 30, 2023 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Collateral from counter parties	$ 0.7

Loan Commitments and Other Related Activities

12 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Liabilities

Note 14. Loan Commitments and Other Related Activities

Some financial instruments such as loan commitments, credit lines, letters of credit, and overdraft protection are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk of credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment.

The contractual amounts of financial instruments with off-balance sheet risk were as follows:


	September 30,
	2023				2022
(in thousands)	Fixed Rate		Variable Rate		Fixed Rate		Variable Rate

Standby letters of credit	$	488	$	—	$	817	$	—
Loan commitments outstanding		—		42,973		9,992		17,184
Unused lines of credit		4,561		72,078		—		45,920

Commitments to make loans are generally made for periods of 180 days or less. The fixed rate loan commitments have interest rates ranging from 4.75% to 7.50% and maturities ranging from 10 years to 30 years.

Earnings Per Share (Tables)

12 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Calculations of Basic and Diluted Earnings Per Share


	Year Ended September 30,
(in thousands, except share and per share data)	2023		2022

Net income available to common stockholders	$	15,164	$	23,556
Less: Dividends paid and earnings allocated to participating securities		(561)		(903)
Income attributable to common stock	$	14,603	$	22,653
Weighted average common shares outstanding, including participating securities		7,319,040		6,302,328
Less: Weighted average participating securities		(278,211)		(237,259)
Weighted average common shares outstanding		7,040,829		6,065,069
Basic EPS	$	2.07	$	3.74

Income attributable to common stock	$	14,603	$	22,653
Weighted average common shares outstanding		7,040,829		6,065,069
Weighted average common equivalent shares outstanding		80,118		92,977
Weighted average common and equivalent shares outstanding		7,120,947		6,158,046
Diluted EPS	$	2.05	$	3.68

Summary of Significant Accounting Policies - Allowance for Loan Losses (Details)	12 Months Ended
	Sep. 30, 2023
Allowance For Loan Losses [Abstract]
Historical loss lookback period	3 years

Subordinated Debentures (Details) - Subordinated Notes - USD ($) $ in Millions	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Oct. 31, 2020
Debt Instruments
Unamortized issuance costs	$ 0.4	$ 0.4
Issuance costs	$ 0.1	$ 0.1
Private Placement
Debt Instruments
Aggregate principal amount			$ 25.0
Private Placement \| Until October 15, 2025
Debt Instruments
Borrowing rate of interest			5.00%
Private Placement \| From and Including October 15, 2025 \| Secured Overnight Financing Rate
Debt Instruments
Basis spread on variable rate	4.874%
Term of variable rate	3 months

Fair Value - Assets Measured at Fair Value on Non-recurring Basis (Details) - Nonrecurring - USD ($)	Sep. 30, 2023	Sep. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities measured at fair value	$ 0	$ 0
Assets measured at fair value	$ 0	$ 0

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Preferred Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive (Loss) Income, Net	Total
Beginning Balance at Sep. 30, 2021	$ 56		$ 97,246	$ 24,971	$ 256	$ 122,529
Balance (in shares) at Sep. 30, 2021	5,563,426
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				23,556		23,556
Other comprehensive loss, net of tax					(876)	(876)
Issuance of common stock in lieu of directors' fees			42			42
Issuance of common stock in lieu of directors' fees (in shares)	2,384
Cash dividends paid				(2,052)		(2,052)
Stock-based compensation			1,684			1,684
Common stock issued in purchase of Savoy Bank	$ 2		(2)
Common stock issued in purchase of Savoy Bank (in shares)	254,265
Savoy Bank acquisition rollover options			(28)			(28)
Savoy Bank acquisition rollover options (in shares)	(677)
Common stock issued in Initial Public Offering ("IPO")	$ 15		27,714			27,729
Common stock issued in Initial Public Offering ("IPO") (in shares)	1,466,250
Ending Balance at Sep. 30, 2022	$ 73		126,656	46,475	(620)	172,584
Balance (in shares) at Sep. 30, 2022	7,285,648
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				15,164		15,164
Other comprehensive loss, net of tax					(702)	(702)
Cash dividends paid				(2,946)		(2,946)
Stock-based compensation	$ 1		1,870			1,871
Stock awards granted, net of forfeitures (in shares)	32,901
Shares received related to tax withholding			(170)			(170)
Shares received related to tax withholding (in shares)	(8,744)
Preferred stock issued in exchange for common stock	$ (2)	$ 2,963	(2,961)
Preferred stock issued in exchange for common stock (in shares)	(150,000)
Exercise of stock options			106			106
Exercise of stock options (in shares)	10,614
Ending Balance at Sep. 30, 2023	$ 72	$ 2,963	$ 125,501	$ 58,693	$ (1,322)	$ 185,907
Balance (in shares) at Sep. 30, 2023	7,170,419

Accumulated Other Comprehensive (Loss) Income - Changes in Accumulated Other Comprehensive Income (loss) by Component, Net of Tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	$ 172,584	$ 122,529
Net current period other comprehensive loss (income)	(702)	(876)
Ending Balance	185,907	172,584
Unrealized Gains and Losses on Available-for-Sale Debt Securities
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	(620)	256
Other comprehensive (loss) income, before reclassification	(1,050)	(795)
Amount reclassified from accumulated other comprehensive income (loss)		(81)
Net current period other comprehensive loss (income)	(1,050)	(876)
Ending Balance	(1,670)	(620)
Gains and Losses on Cash Flow Hedges
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Other comprehensive (loss) income, before reclassification	348
Net current period other comprehensive loss (income)	348
Ending Balance	348
Accumulated Other Comprehensive Income [Member]
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	(620)	256
Other comprehensive (loss) income, before reclassification	(702)	(795)
Amount reclassified from accumulated other comprehensive income (loss)		(81)
Net current period other comprehensive loss (income)	(702)	(876)
Ending Balance	$ (1,322)	$ (620)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481372/852-10-55-10

Reference 2: http://www.xbrl.org/2003/role/exampleRef
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org//1943274/2147480167/946-830-55-12

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(19))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Section S99
-Paragraph 2
-Subparagraph (SX 210.6-05(4))
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-URI https://asc.fasb.org//1943274/2147479617/946-210-S99-2

Reference 5: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
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-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 3
-Subparagraph (SX 210.6-09(6))
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 3
-Subparagraph (SX 210.6-09(7))
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-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
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Reference 9: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
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-Paragraph 3
-Subparagraph (c)
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Reference 10: http://www.xbrl.org/2009/role/commonPracticeRef
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-Name Accounting Standards Codification
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Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
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-Subparagraph (SAB Topic 4.E)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480418/310-10-S99-2

+ Details

Premises and Equipment (Tables)

12 Months Ended

Sep. 30, 2023

Premises and Equipment [Abstract]

Components of Premises and Equipment


	September 30,
(in thousands)	2023		2022
Land	$	1,600	$	1,600
Buildings and improvements		10,868		10,862
Leasehold improvements		4,247		2,615
Furniture, fixtures and equipment		7,491		5,978
Construction in progress		—		111
		24,206		21,166
Less: Accumulated depreciation and amortization		(8,149)		(6,704)
Premises and equipment, net	$	16,057	$	14,462

Loans - Impaired Loans (Details) - USD ($) $ in Thousands	12 Months Ended
Loans - Impaired Loans (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
With no related allowance recorded [Abstract]
Unpaid principal balance	$ 17,730	$ 14,600
Recorded investment	16,660	14,522
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Interest Income Recognized	131	201
Average Recorded Investment	12,924	9,728
Residential Real Estate
With no related allowance recorded [Abstract]
Unpaid principal balance	7,484	5,394
Recorded investment	7,477	5,392
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Interest Income Recognized	105	124
Average Recorded Investment	4,243	4,646
Multi-family
With no related allowance recorded [Abstract]
Unpaid principal balance	3,282	2,348
Recorded investment	2,452	2,348
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Interest Income Recognized	3	0
Average Recorded Investment	2,489	1,066
Commercial Real Estate
With no related allowance recorded [Abstract]
Unpaid principal balance	6,118	5,950
Recorded investment	6,119	5,875
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Interest Income Recognized	0	0
Average Recorded Investment	5,761	3,627
Commercial and industrial
With no related allowance recorded [Abstract]
Unpaid principal balance	846	908
Recorded investment	612	907
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Interest Income Recognized	23	77
Average Recorded Investment	$ 431	$ 389

Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Non-Interest Income [Abstract]
Net gain on sale of loans held-for-sale	$ 4,093	$ 5,143
Total non-interest income	8,848	8,872
Loan servicing and fee income
Non-Interest Income [Abstract]
Revenue from contracts with customers, not included within the scope of ASC 606	2,709	2,885
Loan servicing and fee income(1)	2,709	2,885
Service charges on deposit accounts
Non-Interest Income [Abstract]
Revenue from contracts with customers in the scope of ASC 606	275	232
Net gain on sale of loans held-for-sale
Non-Interest Income [Abstract]
Revenue from contracts with customers, not included within the scope of ASC 606	4,093	5,143
Loan servicing and fee income(1)	4,093	5,143
Net gain on sale of investments available-for-sale
Non-Interest Income [Abstract]
Revenue from contracts with customers, not included within the scope of ASC 606		105
Loan servicing and fee income(1)		105
Other Revenue [Member]
Non-Interest Income [Abstract]
Revenue from contracts with customers and revenue not included within the scope of ASC 606	1,771	507
Merchant card processing fees
Non-Interest Income [Abstract]
Revenue from contracts with customers in the scope of ASC 606	47	33
Settlement payment
Non-Interest Income [Abstract]
Revenue from contracts with customers in the scope of ASC 606	975
Loan related fee income, recoveries on acquired loans and miscellaneous income
Non-Interest Income [Abstract]
Revenue from contracts with customers, not included within the scope of ASC 606	1,724	474
Loan servicing and fee income(1)	$ 1,724	$ 474

Loans - Carrying Amount for Purchased Credit Impaired Loans (Details) $ in Thousands	12 Months Ended
	Sep. 30, 2023 USD ($) loan	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Allowance for loan losses	$ 14,686	$ 12,844	$ 8,552
Purchased credit impaired loans reflect credit deterioration
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Total recorded investment	128	1,231
Commercial real estate and C&I loans \| Purchased credit impaired loans reflect credit deterioration
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Allowance for loan losses	$ 0	50
Number of purchased credit impaired loans acquired \| loan	2
Charged off to the allowance for loan losses	$ 457
Commercial Real Estate
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Allowance for loan losses	3,197	3,707	1,884
Commercial Real Estate \| Purchased credit impaired loans reflect credit deterioration
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Total recorded investment		602
Commercial and Industrial
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Allowance for loan losses	2,368	761	$ 79
Commercial and Industrial \| Purchased credit impaired loans reflect credit deterioration
Carrying Amount for Purchased Credit Impaired Loans [Abstract]
Total recorded investment	$ 128	$ 629

- Definition

Amount of allowance for credit loss on financing receivable. Excludes allowance for financing receivable covered under loss sharing agreement.

+ References + Details

Related Party Transactions

12 Months Ended

Sep. 30, 2023

Related Party Transactions

Note 13. Related Party Transactions

The Company has had, and may be expected to have in the future, banking transactions in the ordinary course of business with its executive officers, directors, their immediate families and their affiliated companies (commonly referred to as related parties). Loans to related parties during 2023 were as follows:


(in thousands)
Beginning balance, October 1, 2022	$	2,736
New loans		1,000
Repayments		(884)
Ending balance, September 30, 2023	$	2,852

Deposits from principal officers, directors and their affiliates at September 30, 2023 and 2022 were $28.5 million and $12.8 million, respectively.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Loans - Classification of Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	$ 1,868,980	$ 1,620,891
Net deferred loan fees and costs	(5,582)	(2,640)
Total loans	1,874,562	1,623,531
Allowance for loan losses	(14,686)	(12,844)	$ (8,552)
Loans, net	1,859,876	1,610,687
Servicing of loans to others	255,700	246,000
Amount from sale of loans	51,800	80,300
Net gain on sale of loans held-for-sale	4,093	5,143
Residential Portfolio Segment [Member]
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	655,194	515,316
Total loans	657,332	516,258
Allowance for loan losses	(4,778)	(3,951)	(4,155)
Multi-family
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	578,278	574,413
Total loans	578,895	575,061
Allowance for loan losses	(4,206)	(4,308)	(2,433)
Commercial real estate and C&I loans \| PPP Loans
Classification of Loans by Loan Portfolio Segment [Abstract]
Loans sold and settled	1,000	4,900
Commercial Real Estate
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	536,732	472,511
Total loans	537,314	472,984
Allowance for loan losses	(3,197)	(3,707)	(1,884)
Commercial and industrial
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	85,450	45,758
Total loans	87,575	46,285
Allowance for loan losses	(2,368)	(761)	(79)
Commercial and industrial \| PPP Loans
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	4,800	10,200
Construction and land development
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	12,990	12,871
Total loans	13,021	12,907
Allowance for loan losses	(104)	(115)
Consumer
Classification of Loans by Loan Portfolio Segment [Abstract]
Gross loans	336	22
Total loans	425	36
Allowance for loan losses	$ (33)	$ (2)	$ (1)

Equity Compensation Plans (Tables)

12 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity


						Weighted
		Weighted				Average
		Average		Aggregate		Remaining
	Number of	Exercise		Intrinsic		Contractual
	Options	Price		Value		Term
Outstanding, October 1, 2022	227,406	$	9.50	$	2,298	2.45 years
Granted	—		—
Exercised	(10,614)		10.00
Forfeited	(18,459)		16.25
Outstanding, September 30, 2023 ⁽¹⁾	198,333	$	8.85	$	1,864	1.19 years

(1)	All outstanding options are fully vested and exercisable

Schedule of information related to the stock option plan


	Year Ended September 30,
(in thousands)	2023		2022
Intrinsic value of options exercised	$	103	$	—
Cash received from option exercises		106		—
Tax benefit from option exercises		36		—

Summary of Restricted Stock Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2022	284,263	$	19.78
Granted	50,580		19.73
Vested	(72,160)		19.96
Forfeited	(17,679)		19.86
Unvested, September 30, 2023	245,004	$	19.71

Summary of Restricted Stock Units Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2022	47,676	$	19.73
Granted	—		—
Vested	—		—
Forfeited	(9,405)		19.73
Unvested, September 30, 2023	38,271	$	19.73

Loans - Allowance for Loan Losses, Allowance for Loan Losses and Recorded Investment by Portfolio Segment Based on Impairment Method (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2021
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	$ 14,686	$ 12,794
Purchased-credit impaired		50
Total allowance for loan losses	14,686	12,844	$ 8,552
Loans [Abstract]
Individually evaluated for impairment	16,660	14,522
Collectively evaluated for impairment	1,857,774	1,607,778
Purchased-credit impaired	128	1,231
Total loans	1,874,562	1,623,531
Residential Real Estate
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	4,778	3,951
Total allowance for loan losses	4,778	3,951	4,155
Loans [Abstract]
Individually evaluated for impairment	7,477	5,392
Collectively evaluated for impairment	649,855	510,866
Purchased-credit impaired		0
Total loans	657,332	516,258
Multi-family
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	4,206	4,308
Total allowance for loan losses	4,206	4,308	2,433
Loans [Abstract]
Individually evaluated for impairment	2,452	2,348
Collectively evaluated for impairment	576,443	572,713
Purchased-credit impaired		0
Total loans	578,895	575,061
Commercial Real Estate
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	3,197	3,707
Total allowance for loan losses	3,197	3,707	1,884
Loans [Abstract]
Individually evaluated for impairment	6,119	5,875
Collectively evaluated for impairment	531,195	466,507
Purchased-credit impaired		602
Total loans	537,314	472,984
Commercial and Industrial
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	2,368	711
Purchased-credit impaired		50
Total allowance for loan losses	2,368	761	79
Loans [Abstract]
Individually evaluated for impairment	612	907
Collectively evaluated for impairment	86,835	44,749
Purchased-credit impaired	128	629
Total loans	87,575	46,285
Construction and land development
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	104	115
Total allowance for loan losses	104	115
Loans [Abstract]
Collectively evaluated for impairment	13,021	12,907
Purchased-credit impaired		0
Total loans	13,021	12,907
Consumer
Allowance for Loan Losses [Abstract]
Collectively evaluated for impairment	33	2
Total allowance for loan losses	33	2	$ 1
Loans [Abstract]
Collectively evaluated for impairment	425	36
Purchased-credit impaired		0
Total loans	$ 425	$ 36

Leases - Future undiscounted lease payments for operating leases (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Leases [Abstract]
2024	$ 2,149
2025	2,157
2026	1,988
2027	1,582
2028	1,372
Thereafter	3,494
Total	12,742
Less: imputed interest	1,843
Net lease liability	$ 10,899

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Sep. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets


	September 30,
(in thousands)	2023		2022
Goodwill at beginning of period	$	19,168	$	19,168
Acquisition		—		—
Measurement period adjustment for previous acquisition		—		—
Goodwill at end of period	$	19,168	$	19,168
Other intangible assets at beginning of period	$	399	$	480
Acquisition		—		—
Amortization		(72)		(81)
Other intangible assets at end of period	$	327	$	399

Gross Carrying Amount and Accumulated Amortization for Other Intangible Assets


	September 30,
(in thousands)	2023		2022
Gross carrying amount	$	517	$	517
Accumulated amortization		(190)		(118)
Net book value	$	327	$	399

Estimated Future Amortization Expense for Other Intangible Assets


(in thousands)
2024	$	63
2025		55
2026		49
2027		43
2028		38
Thereafter		79
Total	$	327

Parent Company Only Condensed Financial Information, Statements of Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Statements of Income [Abstract]
Interest income	$ 105,043	$ 68,429
Interest expense	50,551	7,175
Non-interest expense	39,721	35,181
Income tax benefit	(5,023)	(6,939)
NET INCOME	15,164	23,556
Parent Company [Member]
Statements of Income [Abstract]
Dividends received from Bank	5,300	400
Interest expense	1,304	1,331
Non-interest expense	(159)	(18)
Income (loss) before income taxes and equity in undistributed earnings of the Bank	3,837	(949)
Income tax benefit	232	253
Equity in undistributed earnings of the Bank	11,095	24,252
NET INCOME	$ 15,164	$ 23,556

Borrowings - FHLB Advances Contractual Maturities and Weighted Average Interest Rates (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Sep. 30, 2022
FHLB Contractual Maturity, Amount
2023/2024	$ 18,860	$ 11,860
2024/2025	7,080	18,860
2025/2026	40,475	7,080
2027	40,250
2028	20,000
Total term advances	126,665	37,800
Total FHLB advances	$ 175,665	$ 92,800
FHLB Contractual Maturity, Weighted Average Rate
2023/2024	0.98%	2.23%
2024/2025	0.58%	0.98%
2025/2026	4.50%	0.58%
2027	4.32%
2028	4.18%
Total term advances, Weighted average rate	3.65%	1.30%
Total FHLB advances, Weighted Average Rate		2.48%
Overnight borrowings
FHLB Contractual Maturity, Amount
Total FHLB advances	$ 49,000	$ 55,000
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate	5.59%	3.29%
Minimum
FHLB Contractual Maturity, Weighted Average Rate
2023/2024	0.39%	0.37%
2024/2025	0.56%	0.39%
2025/2026	4.29%	0.56%
2027	4.13%
2028	3.99%
Maximum
FHLB Contractual Maturity, Weighted Average Rate
2023/2024	2.53%	2.96%
2024/2025	0.59%	2.53%
2025/2026	4.98%	0.59%
2027	4.74%
2028	4.58%
Weighted Average
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate	4.19%

Derivatives - Cash flow hedges included in the consolidated statements of financial condition (Details) $ in Thousands	Sep. 30, 2023 USD ($)
Derivative [Line Items]
Notional amount	$ 75,000
Fair Value Asset	$ 445
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets
Cash flow hedge
Derivative [Line Items]
Notional amount	$ 75,000

- Definition

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes assets not subject to a master netting arrangement and not elected to be offset.

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+ Details

Summary of Significant Accounting Policies - Adoption of New Accounting Standards (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Oct. 01, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets	$ 10,193
Operating lease liabilities	$ 10,899
Cumulative Effect, Period of Adoption, Adjusted Balance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease assets		$ 10,000
Operating lease liabilities		$ 10,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Borrowings (Tables)

12 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Contractual Maturities and Weighted Average Interest Rates of FHLB Advances


	Balance at September 30,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	49,000	5.59	%

2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		126,665	3.65	%
Total FHLB advances	$	175,665	4.19	%


	Balance at September 30,
	2022
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	55,000	3.29	%

2023, rates from 0.37% to 2.96%		11,860	2.23	%
2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
Total term advances		37,800	1.30	%
Total FHLB advances	$	92,800	2.48	%

Accumulated Other Comprehensive (Loss) Income (Tables)

12 Months Ended

Sep. 30, 2023

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Changes in Accumulated Other Comprehensive Income by Component, Net of Tax


	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at October 1, 2022	$	(620)	$	—	$	(620)
Other comprehensive (loss) income, before reclassification		(1,050)		348		(702)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive (loss) income		(1,050)		348		(702)
Balance at September 30, 2023	$	(1,670)	$	348	$	(1,322)



	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at October 1, 2021	$	256	$	—	$	256
Other comprehensive loss, before reclassification		(795)		—		(795)
Amount reclassified from accumulated other comprehensive income		(81)		—		(81)
Net current period other comprehensive loss		(876)		—		(876)
Balance at September 30, 2022	$	(620)	$	—	$	(620)

Significant Amounts Reclassified Out of Accumulated Other Comprehensive Income


	Year Ended
	September 30,				Affected Line Item in Consolidated
(in thousands)	2023		2022		Statements of Income
Unrealized gains and losses on available-for-sale securities
Realized gains on securities available-for-sale	$	—	$	105	Gain on sale of investment securities available-for-sale, net
Tax effect		—		24	Income tax expense
Net of tax	$	—	$	81

Gains and losses on cash flow hedges
Interest rate contracts	$	—	$	—	Interest income (expense)
Tax effect		—		—	Income tax (expense) or benefit
Net of tax	$	—	$	—

Total reclassifications for the period, net of tax	$	—	$	81