0001558370-24-001054 | 10-QT | XBRL Viewer

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DERIVATIVES - Credit-Risk-Related Contingent Features (Details) - USD ($) $ in Millions	Dec. 31, 2023	Sep. 30, 2023
DERIVATIVES [Abstract]
Termination value of derivatives in net liability position	$ 2.2
Collateral received from counterparties	$ 0.0	$ 0.7

BORROWINGS (Tables)

3 Months Ended

Dec. 31, 2023

BORROWINGS [Abstract]

Contractual Maturities and Weighted Average Interest Rates of FHLB Advances

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 (in thousands):


	Balance at December 31,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	—	—	%

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	$	126,665	3.65	%


	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	%

EARNINGS PER SHARE

3 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE

EARNINGS PER SHARE

2. 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 for the three months ended December 31, 2023 and 2022 are as follows. There were no stock options that were antidilutive for the three months ended December 31, 2023 and 2022.


	Three Months Ended December 31,
(in thousands, except share and per share data)	2023		2022

Net income available to common stockholders	$	3,763	$	5,338
Less: Dividends paid and earnings allocated to participating securities		(118)		(208)
Income attributable to common stock	$	3,645	$	5,130
Weighted average common shares outstanding, including participating securities		7,324,133		7,292,940
Less: Weighted average participating securities		(245,685)		(284,027)
Weighted average common shares outstanding		7,078,448		7,008,913
Basic EPS	$	0.51	$	0.73

Income attributable to common stock	$	3,645	$	5,130
Weighted average common shares outstanding		7,078,448		7,008,913
Weighted average common equivalent shares outstanding		59,396		94,998
Weighted average common and equivalent shares outstanding		7,137,844		7,103,911
Diluted EPS	$	0.51	$	0.72

DERIVATIVES - Cash flow hedges included in the consolidated statements of financial condition (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Derivative [Line Items]
Assets, Notional Amount		$ 75,000
Fair Value Asset		445
Liabilities, Notional Amount		125,000
Fair Value Liability		(2,361)
Interest rate swap \| Cash flow hedge
Derivative [Line Items]
Assets, Notional Amount		75,000
Fair Value Asset		$ 445
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Liabilities, Notional Amount	$ 75,000
Fair Value Liability	$ (1,256)
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Interest rate swap \| Fair value hedges
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Liabilities, Notional Amount	$ 50,000
Fair Value Liability	$ (1,105)
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Dec. 31, 2023	Jan. 31, 2024
Cover [Abstract]
Document Type	10-QT
Document Quarterly Report	false
Document Period Start Date	Oct. 01, 2023
Document Period End Date	Dec. 31, 2023
Document Transition Report	true
Entity File Number	001-41384
Entity Registrant Name	Hanover Bancorp, Inc. /NY
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 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
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,229,404
Entity Central Index Key	0001828588
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	false

LOANS - Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	$ 1,957,199
Total loans	1,957,199
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	14,451	$ 14,933
Total past due and non-accrual	28,336	23,982
Purchased credit impaired loans		128
Total	1,957,199	1,874,562
Recorded investment in TDRs		1,700
30-59 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	7,758	7,523
60-89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	6,127	1,526
Greater than 89 Days Past Due
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	0	0
Current
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans	1,928,863	1,850,452
Residential real estate
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	714,843
Non-accrual	4,369
Total past due and Non-accrual	11,237
Total loans	714,843
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	4,369	5,750
Total past due and non-accrual		8,732
Purchased credit impaired loans		0
Total		657,332
Residential real estate \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	4,508
Total loans	4,508
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		2,314
Residential real estate \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	2,360
Total loans	2,360
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		668
Residential real estate \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Residential real estate \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	703,606
Total loans	703,606
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		648,600
Multi-family
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	572,849
Non-accrual	3,374
Total past due and Non-accrual	3,374
Total loans	572,849
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	3,374	2,452
Total past due and non-accrual		2,452
Purchased credit impaired loans		0
Total		578,895
Multi-family \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Multi-family \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	569,475
Total loans	569,475
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		576,443
Commercial real estate
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	548,012
Non-accrual	6,000
Total past due and Non-accrual	11,878
Total loans	548,012
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	6,000	6,119
Total past due and non-accrual		10,742
Purchased credit impaired loans		0
Total		537,314
Commercial real estate \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	2,666
Total loans	2,666
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		3,765
Commercial real estate \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	3,212
Total loans	3,212
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		858
Commercial real estate \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Commercial real estate \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	536,134
Total loans	536,134
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		526,572
Commercial and industrial
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	107,912
Non-accrual	708
Total past due and Non-accrual	1,847
Total loans	107,912
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual	708	612
Total past due and non-accrual		2,056
Purchased credit impaired loans		128
Total		87,575
Commercial and industrial \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	584
Total loans	584
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		1,444
Commercial and industrial \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	555
Total loans	555
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Commercial and industrial \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Commercial and industrial \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	106,065
Total loans	106,065
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		85,391
Construction and land development
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	13,170
Non-accrual	0
Total past due and Non-accrual	0
Total loans	13,170
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual		0
Total past due and non-accrual		0
Purchased credit impaired loans		0
Total		13,021
Construction and land development \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
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
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
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
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Construction and land development \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	13,170
Total loans	13,170
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		13,021
Consumer
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	413
Non-accrual	0
Total past due and Non-accrual	0
Total loans	413
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Non-accrual		0
Total past due and non-accrual		0
Purchased credit impaired loans		0
Total		425
Consumer \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0
Total loans	0
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		0
Consumer \| Current
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	413
Total loans	$ 413
Aging of Recorded Investment in Past Due and Non-accrual Loans [Abstract]
Recorded total loans		$ 425

SUBORDINATED DEBENTURES (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
SUBORDINATED DEBENTURES (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Debt Instruments
Aggregate principal amount		$ 25,000		$ 25,000
Unamortized issuance costs		365		$ 379
Subordinated Notes
Debt Instruments
Issuance costs		$ 14	$ 13
Subordinated Notes \| Private Placement
Debt Instruments
Aggregate principal amount	$ 25,000
Debt instrument, maturity date	Dec. 31, 2030
Subordinated Notes \| Private Placement \| Until October 15, 2025
Debt Instruments
Borrowing rate of interest	5.00%
Subordinated Notes \| Private Placement \| From and Including October 15, 2025 \| Secured Overnight Financing Rate
Debt Instruments
Basis spread on variable rate		0.4874%
Term of variable rate		3 months

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME - Changes in Accumulated Other Comprehensive Income (loss) by Component, Net of Tax (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	$ 185,907,000	$ 172,584,000
Amount reclassified from accumulated other comprehensive (loss) income	0	0
Net current period other comprehensive income (loss)	(1,128,000)	(95,000)
Ending Balance	184,830,000	177,628,000
Unrealized Gains and Losses on Available-for-Sale Debt Securities
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	(1,670,000)	(620,000)
Other comprehensive income (loss), before reclassification	204,000	(95,000)
Net current period other comprehensive income (loss)	204,000	(95,000)
Ending Balance	(1,466,000)	(715,000)
Gains and Losses on Cash Flow Hedges
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	348,000
Other comprehensive income (loss), before reclassification	(1,332,000)
Net current period other comprehensive income (loss)	(1,332,000)
Ending Balance	(984,000)
Accumulated Other Comprehensive Income
Changes in Other Comprehensive Income by Component, Net of Tax [Roll Forward]
Beginning Balance	(1,322,000)	(620,000)
Other comprehensive income (loss), before reclassification	(1,128,000)	(95,000)
Net current period other comprehensive income (loss)	(1,128,000)	(95,000)
Ending Balance	$ (2,450,000)	$ (715,000)

- Definition

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

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+ Details

LOANS - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Sep. 30, 2023
With no related allowance recorded [Abstract]
Unpaid principal balance		$ 17,730
Recorded investment		16,660
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Average Recorded Investment	$ 12,430
Interest Income Recognized	49
Residential Real Estate
With no related allowance recorded [Abstract]
Unpaid principal balance		7,484
Recorded investment		7,477
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Average Recorded Investment	3,733
Interest Income Recognized	24
Multi-family
With no related allowance recorded [Abstract]
Unpaid principal balance		3,282
Recorded investment		2,452
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Average Recorded Investment	2,346
Interest Income Recognized	2
Commercial real estate
With no related allowance recorded [Abstract]
Unpaid principal balance		6,118
Recorded investment		6,119
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Average Recorded Investment	5,883
Commercial and industrial
With no related allowance recorded [Abstract]
Unpaid principal balance		846
Recorded investment		$ 612
Impaired Financing Receivable With No Related Allowance Average Recorded Investment And Interest Income Recognized [Abstract]
Average Recorded Investment	468
Interest Income Recognized	$ 23

LOANS

3 Months Ended

Dec. 31, 2023

LOANS

Loans

4. LOANS

The following table sets forth the classification of the Company’s loans by loan portfolio segment for the periods presented.


(in thousands)	December 31, 2023		September 30, 2023
Residential real estate	$	714,843	$	657,332
Multi-family		572,849		578,895
Commercial real estate		548,012		537,314
Commercial and industrial		107,912		87,575
Construction and land development		13,170		13,021
Consumer		413		425
Total loans		1,957,199		1,874,562
Allowance for credit losses		(19,658)		(14,686)
Total loans, net	$	1,937,541	$	1,859,876

The Company’s Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans outstanding, included in commercial and industrial loans in the table above, totaled $2.9 million and $4.8 million at December 31, 2023 and September 30, 2023, respectively.

At December 31, 2023 and September 30, 2023, the Company was servicing approximately $262.8 million and $255.7 million, respectively, of loans for others. The Company had $8.9 million of SBA loans held for sale at December 31, 2023. 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.

For the three months ended December 31, 2023 and 2022, the Company sold loans totaling approximately $29.7 million and $8.0 million, respectively, recognizing net gains of $2.3 million and $0.6 million, respectively.

The following summarizes the activity in the allowance by portfolio segment for the periods indicated:


	Three Months Ended December 31, 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 credit losses:
Beginning balance, prior to adoption of ASC 326	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Impact of adopting ASC 326		(217)		169		5,296		(1,201)		24		24		4,095
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		567		—		110		—		—		677
Provision for credit losses		440		(271)		(103)		142		(6)		(2)		200
Ending balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658


	Three Months Ended December 31, 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	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		60		—		—		60
Provision for loan losses		557		1,389		(473)		31		(11)		7		1,500
Ending balance	$	4,508	$	5,697	$	3,234	$	852	$	104	$	9	$	14,404

The following tables present the balance in the allowance and the recorded investment in loans by portfolio segment as of December 31, 2023 and September 30, 2023:


	December 31, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for credit losses:
Ending allowance balance attributable to loans:
Individually analyzed	$	—	$	397	$	24	$	—	$	—	$	—	$	421
Collectively analyzed		5,001		4,274		8,366		1,419		122		55		19,237
Total ending allowance balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658
Loans:
Loans individually analyzed	$	4,226	$	3,356	$	5,986	$	379	$	—	$	—	$	13,947
Loans collectively analyzed		710,617		569,493		542,026		107,533		13,170		413		1,943,252
Total ending loans balance	$	714,843	$	572,849	$	548,012	$	107,912	$	13,170	$	413	$	1,957,199


	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:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		4,778		4,206		3,197		2,368		104		33		14,686
Purchased-credit impaired		—		—		—		—		—		—		—
Total ending allowance balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Loans:
Loans individually evaluated for impairment	$	7,477	$	2,452	$	6,119	$	612	$	—	$	—	$	16,660
Loans collectively evaluated for impairment		649,855		576,443		531,195		86,835		13,021		425		1,857,774
Purchased-credit impaired		—		—		—		128		—		—		128
Total ending loans balance	$	657,332	$	578,895	$	537,314	$	87,575	$	13,021	$	425	$	1,874,562

The following table presents the recorded investment in loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2023:


	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing

Residential real estate	$	4,369	$	4,369	$	—
Multi-family		1,794		3,374		—
Commercial real estate		5,976		6,000		—
Commercial and industrial		708		708		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,847	$	14,451	$	—

The Company recognized $155 thousand of interest income on nonaccrual loans during the three months ended December 31, 2023.

Individually Analyzed Loans

Effective October 1, 2023, the Company began analyzing loans on an individual basis when management determined that the loan no longer exhibited risk characteristics consistent with the risk characteristics existing in its designed pool of loans, under the Company’s CECL methodology. This differs from the definition of loans considered to be impaired at September 30, 2023. Loans individually analyzed include certain nonaccrual loans.

As of December 31, 2023, the amortized cost basis of individually analyzed loans amounted to $13.9 million, of which $13.8 million were considered collateral dependent. For collateral dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the ACL is measured based on the difference between the fair value of the collateral adjusted for sales costs and the amortized cost basis of the loan, at measurement date. Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage.

The following table presents the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of December 31, 2023.


	December 31, 2023
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,226	$	—
Multi-family⁽²⁾		3,356		397
Commercial real estate ⁽²⁾		5,986		24
Commercial and industrial ⁽¹⁾		272		—
Total	$	13,840	$	421

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

As of October 1, 2023, a loan is classified for individual analysis, when based on current information and events, management has determined that it no longer exhibits risk characteristics consistent with its designated pool. This differs from the definition of loans considered to be impaired as of September 30, 2023. The Company considered a loan to be impaired when, based on currently available information, it was deemed probable that the Company would not be able to collect on the loan’s contractually determined principal and interest payments. The Company identified loss allocations for impaired loans on an individual basis, and in conformity with its methodology under the incurred loss framework.

The following tables present information related to the Company’s impaired loans by portfolio segment as of September 30, 2023 and for the three months ended December 31, 2022.


	September 30, 2023
	Unpaid
	Principal		Recorded		Allowance
(in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Residential real estate	$	7,484	$	7,477	$	—
Multi-family		3,282		2,452		—
Commercial real estate		6,118		6,119		—
Commercial and industrial		846		612		—
Total	$	17,730	$	16,660	$	—


	Three Months Ended
	December 31, 2022
	Average		Interest
	Recorded		Income
(in thousands)	Investment		Recognized⁽¹⁾
With no related allowance recorded:
Residential real estate	$	3,733	$	24
Multi-family		2,346		2
Commercial real estate		5,883		—
Commercial and industrial		468		23
Total	$	12,430	$	49

(1)	Accrual basis interest income recognized approximates cash basis income.

At December 31, 2023 and September 30, 2023, past due and non-accrual loans disaggregated by portfolio segment were as follows:


(in thousands)	Past Due and Non-Accrual
	30 - 59		60 - 89		Greater than				Total past
	Days		Days		89 Days				due and				Total
December 31, 2023	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Current		Loans
Residential real estate	$	4,508	$	2,360	$	—	$	4,369	$	11,237	$	703,606	$	714,843
Multi-family		—		—		—		3,374		3,374		569,475		572,849
Commercial real estate		2,666		3,212		—		6,000		11,878		536,134		548,012
Commercial and industrial		584		555		—		708		1,847		106,065		107,912
Construction and land development		—		—		—		—		—		13,170		13,170
Consumer		—		—		—		—		—		413		413
Total	$	7,758	$	6,127	$	—	$	14,451	$	28,336	$	1,928,863	$	1,957,199


(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.

The Company adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) on October 1, 2023. The Company did not have any loans that were both experiencing difficulties and modified during the three months ended December 31, 2023. The Company has six loans that are classified as troubled debt restructurings under the old guidance, with a total recorded investment of $1.7 million at September 30, 2023.

Credit Quality Indicators:

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 credit 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 deserve 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 having a credit risk rating of Special Mention, Substandard or Doubtful are considered pass loans.

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at December 31, 2023 and gross charge-offs for the three months ended December 31, 2023:


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	191,238	$	207,166	$	64,906	$	39,772	$	79,581	$	98,150	$	—	$	24,975	$	705,788
Special Mention		—		—		—		522		230		—		—		—		752
Substandard		—		740		—		676		4,185		927		—		656		7,184
Total Residential real estate		191,238		207,906		64,906		40,970		83,996		99,077		—		25,631		713,724
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family
Pass		3,533		299,217		162,678		36,592		10,854		56,601		—		—		569,475
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,580		1,794		—		—		—		—		3,374
Total Multi-family		3,533		299,217		164,258		38,386		10,854		56,601		—		—		572,849
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial real estate
Pass		86,834		187,570		80,761		26,300		42,476		95,265		—		—		519,206
Special Mention		—		1,852		8,433		293		3,647		6,427		—		—		20,652
Substandard		—		—		—		199		6,826		1,129		—		—		8,154
Total Commercial real estate		86,834		189,422		89,194		26,792		52,949		102,821		—		—		548,012
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial
Pass		74,352		11,392		10,015		4,407		126		5,274		—		—		105,566
Special Mention		—		—		913		—		—		540		—		—		1,453
Substandard		—		—		266		35		145		447		—		—		893
Total Commercial and industrial		74,352		11,392		11,194		4,442		271		6,261		—		—		107,912
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Construction and land development
Pass		904		3,613		8,653		—		—		—		—		—		13,170
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		904		3,613		8,653		—		—		—		—		—		13,170
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Pass		326		87		—		—		—		—		—		—		413
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		326		87		—		—		—		—		—		—		413
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Total Loans	$	357,187	$	711,637	$	338,205	$	110,590	$	148,070	$	264,760	$	—	$	25,631	$	1,956,080

Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)

Certain fixed residential mortgage loans are included in a fair value hedging relationship. The amortized cost excludes a contra asset of $1.1 million related to basis adjustments for loans in the closed portfolio under the portfolio layer method at December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if hedge was dedesignated. See “Note 10 – Derivates” for more information on the fair value hedge.

Based upon the analyses performed as of September 30, 2023, the risk category of loans by class of loans was as follows:


	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

FAIR VALUE

3 Months Ended

Dec. 31, 2023

FAIR VALUE [Abstract]

FAIR VALUE

7. FAIR VALUE

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 presents fair value measurements on a recurring basis at December 31, 2023 and September 30, 2023:


	December 31, 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	$	201	$	—	$	201	$	—
Collateralized loan obligations		50,266		—		50,266		—
Corporate bonds		10,952		—		10,952		—
Loan servicing rights		4,668		—		—		4,668
Total	$	66,087	$	—	$	61,419	$	4,668

Financial liabilties:
Derivatives	$	2,361	$	—	$	2,361	$	—


	September 30, 2023
			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	$	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

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. The fair value of loan servicing rights related to residential mortgage loans at December 31, 2023 was determined based on discounted expected future cash flows using discount rates ranging from 12.38% to 14.88%, a prepayment speed of 26.25% and a weighted average life ranging from 1.55 to 2.78 years. Fair value at September 30, 2023 for loan servicing rights 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.

The fair value of loan servicing rights for SBA loans at December 31, 2023 was determined based on discounted expected future cash flows using discount rates ranging from 9.61% to 41.46%, prepayment speeds ranging from 8.85% to 30.24% and a weighted average life ranging from 1.08 to 5.71 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 Company has determined these are mostly unobservable inputs and considers them Level 3 inputs within the fair value hierarchy.

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


	Three Months Ended December 31,
(in thousands)	2023		2022
Balance at beginning of period	$	4,479	$	4,353
Additions		537		136
Adjustment to fair value		(348)		(87)
Balance at end of period	$	4,668	$	4,402

Assets Measured at Fair Value on a Non-recurring Basis

Financial assets measured at fair value on a non-recurring basis include certain individually evaluated loans reported at fair value of the underlying collateral if repayment is expected solely from the the collateral.

December 31, 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)

Individually evaluated loans - Multi-family

1,180

—

1,180

The fair value amounts shown in the table above are individually evaluated loans net of reserves allocated to said loans. The total reserves allocated to these loans were $397 thousand at December 31, 2023.

The table below presents additional quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis at December 31, 2023:

Range

December 31, 2023

Fair Value

Valuation Technique

Unobservable Input

(Weighted Average)

(Dollar in thousands)

Individually evaluated loans - Multi-family

1,180

Appraisal of collateral

Appraisal and

50.00%

adjustments ⁽¹⁾

(50.00%)

(1)

The appraisal of the underlying collateral property generally includes various significant unobservable inputs (level 3). This was performed by certified general appraisers. Management adjusted the appraisal downward for factors such as the condition of the property and liquidation expenses. The range of other appraisal adjustments and liquidation expenses are shown as a percentage of the appraisal.

Financial Instruments Not Measured at Fair Value

The following presents the carrying amounts and estimated fair values of the Company’s financial instruments not carried at fair value at December 31, 2023 and September 30, 2023:


	December 31, 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	$	177,207	$	177,207	$	—	$	—	$	177,207
Securities held-to-maturity		4,041		—		3,835		—		3,835
Loans, net		1,937,541		—		—		1,890,113		1,890,113
Accrued interest receivable		11,915		—		1,156		10,759		11,915

Financial liabilities:
Time deposits		522,198		—		520,022		—		520,022
Demand and other deposits		1,382,397		1,382,397		—		—		1,382,397
Borrowings		128,953		—		128,165		—		128,165
Subordinated debentures		24,635		—		26,601		—		26,601
Accrued interest payable		1,724		161		1,563		—		1,724


	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

- 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

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

3 Months Ended

Dec. 31, 2023

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

1. BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

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 (“FDIC”). The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (the “FRB”).

Basis of Presentation

In October 2023, the Company’s Board of Directors approved a change in the Company’s fiscal year end from September 30 to December 31. As a result of the change in fiscal year end, this document constitutes the Company’s Transition Report on Form 10-Q for the period October 1, 2023 through December 31, 2023. The Company’s next full fiscal year will be the calendar year January 1, 2024 through December 31, 2024 (fiscal year 2024).

In the opinion of the Company’s management, the preceding unaudited interim consolidated financial statements contain all adjustments, consisting of normal accruals, necessary for a fair presentation of the Company’s consolidated statement of financial condition as of December 31, 2023, its consolidated statements of income for the three months ended Decmber 31, 2023 and 2022, its consolidated statements of comprehensive income for the three months ended December 31, 2023 and 2022, its consolidated statements of changes in stockholders’ equity for the three months ended December 31, 2023 and 2022 and its consolidated statements of cash flows for the three months ended December 31 2023 and 2022. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior period net income or stockholders’ equity.

In addition, the preceding unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as well as in accordance with predominant practices within the banking industry. They do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. The results of operations for the three months ended December 31, 2023 are not necessarily indicative of results for any other interim period or of the results for the full fiscal year 2024. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

All material intercompany accounts and transactions have been eliminated in consolidation. Unless the context otherwise requires, references herein to the Company include the Company and the Bank on a consolidated basis.

Accounting Policies

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.

A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.

Alowance for Credit Losses – Held-to-Maturity Securities – Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $9 thousand at both December 31, 2023 and September 30, 2023 and is excluded from the estimate of credit losses.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Management classifies the held-to-maturity portfolio into the following major security types: Mortgage backed: residential and commercial. All mortgage-backed: residential and commercial securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.

Allowance for Credit Losses – Available-For-Sale Securities – For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale debt securities totaled $0.8 million at December 31, 2023 and is excluded from the estimate of credit losses.

Loans and Loan Interest Income Recognition - Loans that the Company 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 credit losses. The loan portfolio is segmented into residential real estate, multi-family, commercial real estate, commercial and industrial, construction and land development, and consumer loans. Accrued interest receivable totaled $10.8 million at December 31, 2023 and was reported in Accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the estimate of credit losses. Interest income on loans is accrued on the unpaid principal balance and credited to income as earned. Interest income on loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent. Net loan origination fees and costs are deferred and accreted/amortized to interest income over the contractual life of loans using the level-yield method, adjusted for actual prepayments.

Loans Held for Sale – Mortgage and SBA and other government guaranteed loans originated and intended for sale in the secondary market are carried at estimated fair value as determined by outstanding commitments from investors. Periodically, the Company originates various residential mortgage loans for sale to investors generally on a servicing released basis. The sale of such loans is generally arranged through a master commitment on a best-efforts basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Premiums, discounts, origination fees and costs on loans held for sale are deferred and recognized as a component of the gain or loss on sale. Gains and losses on sales of loans held for sale are included in other income, recognized on settlement date and are determined to be the difference between the sale proceeds and the carrying value of the loans. These transactions are accounted for as sales based on satisfaction of the criteria for such accounting which provides that, as transferor, the Company has surrendered control of the loans.

For liquidity purposes generally, there are instances when loans originated with the intent to hold in the portfolio are subsequently transferred to loans held for sale. At transfer, they are carried at the lower of cost or fair value.

Allowance for Credit Losses - Loans – The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that collection in full is not probable, expected credit losses are based on the fair value of the collateral or discounted value of the projected cash flows at the reporting date, adjusted for selling costs as appropriate.

The quantitative component of the estimate relies on the statistical relationship between the projected value of an economic indicator and the implied historical loss experience among a curated group of peers. The Company utilized regression analyses of peer data, in which the Company was included, and where observed credit losses and selected economic factors were used to determine suitable loss drivers for modeling the lifetime rates of probability of default (PD). A loss given default rate (LGD) is assigned to each pool for each period based on these PD outcomes. The model primarily utilizes an expected discounted cash flow (DCF) analysis with a remaining life (RL) approach used limitedly. The DCF analysis is run at the instrument-level and incorporates an array of loan-specific data points and segment-implied assumptions to determine the lifetime expected loss attributable to each instrument. An implicit "hypothetical loss" is derived for each period of the DCF, and helps establish the present value of future cash flows for each period. The reserve applied to a specific instrument is the difference between the sum of the present value of future cash flows and the book balance of the loan at the measurement date. The RL approach utilizes projected loss rates based on the remaining life of a loan pool. It is utilized when a regression analysis could not provide adequate correlation of PD and external economic factors on which to base projected losses.

Portfolio segments are the level at which loss assumptions are applied to a pool of loans based on the similarity of risk characteristics inherent in the included instruments, relying on FFIEC Call Report codes. The loss driver for each loan portfolio segment is derived from a readily available and reasonable economic forecast, chiefly the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. GDP growth. Forecasts are applied over a four-quarter period and revert to the lookback period's historical mean for the economic indicator over a four-quarter horizon, on a straight-line basis.

The model incorporates qualitative factor adjustments in order to calibrate the model for risk in each portfolio segment that may not be captured through quantitative analysis. Determinations regarding qualitative adjustments are reflective of management's expectation of loss conditions differing from those already captured in the quantitative component of the model. Factors that the Company considers include a) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices; b) changes in international, national, regional, and local conditions; c) changes in the nature and volume of the portfolio and term loans; d) changes in experience, depth, and ability of lending management; e) changes in volume and severity of past due loans and other similar conditions; f) changes in the quality of the Bank’s loan review system; g) changes in the value of underlying collateral for collateral dependent loans; h) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and i) the effects of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

Allowance for credit losses are aggregated for the major loan segments, with similar characteristics, summarized below. However, for the purposes of calculating reserves, these segments may be further broken down into loan classes by risk characteristics that include but not limited to FFIEC Call Report codes, industry type, geographic location, and collateral type.

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 Bank 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 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 or decline in property value.

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 Credit losses on Off-Balance Sheet Credit Exposures – The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is reported on the Consolidated Statements of Financial Condition in other liabilities section and is adjusted through a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life.

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.

Recent Accounting Pronouncements

Adoption of New Accounting Standards

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 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 was eligible for and elected delayed adoption. The Company adopted the standard on October 1, 2023 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance-sheet credit exposures. Results for the three months ended December 31, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recognized a one-time cumulative effect adjustment to retained earnings, of $4.0 million, or $3.2 million, net of tax effects, of which $0.1 million reflected a reduction of allowance for credit losses on unfunded commitments, $4.1 million reflected additional allowance related to the loan portfolio, and no adjustment was recognized related to the securities portfolio.

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 adopted ASU 2022-02 prospectively, beginning October 1, 2023, concurrently with the aforementioned ASU 2016-13. The Company did not have any loans that were both experiencing financial difficulties and modified during the three months ended December 31, 2023.

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

None.

SECURITIES (Tables)

3 Months Ended

Dec. 31, 2023

SECURITIES

Investment Securities Available for Sale and Held to Maturity


	December 31, 2023
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	309	$	—	$	(108)	$	—	$	201
Collateralized loan obligations		50,283		82		(99)		—		50,266
Corporate bonds		12,700		—		(1,748)		—		10,952
Total available for sale securities	$	63,292	$	82	$	(1,955)	$	—	$	61,419

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,480	$	—	$	(96)	$	1,384	$	—
U.S. GSE commercial mortgage-backed securities		2,561		—		(110)		2,451		—
Total held to maturity securities	$	4,041	$	—	$	(206)	$	3,835	$	—


	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

Securities Portfolio by Contractual Maturity


	December 31, 2023
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Five to ten years	$	16,524	$	14,709
Beyond ten years		46,459		46,509
U.S. GSE residential mortgage-backed securities		309		201
Total securities available for sale		63,292		61,419
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,480		1,384
U.S. GSE commercial mortgage-backed securities		2,561		2,451
Total securities held to maturity		4,041		3,835
Total investment securities	$	67,333	$	65,254

Gross Unrealized Losses and Fair Values of Investment Securities


	December 31, 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	$	—	$	—	$	201	$	(108)	5	$	201	$	(108)
Collateralized loan obligations		12,352		(99)		—		—	3		12,352		(99)
Corporate bonds		1,080		(120)		9,872		(1,628)	7		10,952		(1,748)
Total available-for-sale	$	13,432	$	(219)	$	10,073	$	(1,736)	15	$	23,505	$	(1,955)

	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	$	—	$	—	$	1,384	$	(96)	4	$	1,384	$	(96)
U.S. GSE commercial mortgage-backed securities		—		—		2,451		(110)	1		2,451		(110)
Total held-to-maturity	$	—	$	—	$	3,835	$	(206)	5	$	3,835	$	(206)

Gross unrealized and unrecognized losses and fair values of investment securities aggregated by investment category


	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)

FAIR VALUE - Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Carrying Amount
Financial Assets
Cash and cash equivalents	$ 177,207	$ 192,624
Securities held to maturity	4,041	4,108
Loans, net	1,937,541	1,859,876
Accrued interest receivable	11,915	10,636
Financial Liabilities
Time deposits	522,198	530,076
Demand and other deposits	1,382,397	1,204,994
Borrowings	128,953	179,849
Subordinated debentures	24,635	24,621
Accrued interest payable	1,724	1,821
As Adjusted
Financial Assets
Cash and cash equivalents	177,207	192,624
Securities held to maturity	3,835	3,760
Loans, net	1,890,113	1,798,916
Accrued interest receivable	11,915	10,636
Financial Liabilities
Time deposits	520,022	525,198
Demand and other deposits	1,382,397	1,204,994
Borrowings	128,165	176,693
Subordinated debentures	26,601	26,355
Accrued interest payable	1,724	1,821
As Adjusted \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets
Cash and cash equivalents	177,207	192,624
Securities held to maturity	0	0
Loans, net	0	0
Accrued interest receivable	0	0
Financial Liabilities
Time deposits	0	0
Demand and other deposits	1,382,397	1,204,994
Borrowings	0	0
Subordinated debentures	0	0
Accrued interest payable	161	53
As Adjusted \| Significant Other Observable Inputs (Level 2)
Financial Assets
Cash and cash equivalents	0	0
Securities held to maturity	3,835	3,760
Loans, net	0	0
Accrued interest receivable	1,156	729
Financial Liabilities
Time deposits	520,022	525,198
Demand and other deposits	0	0
Borrowings	128,165	176,693
Subordinated debentures	26,601	26,355
Accrued interest payable	1,563	1,768
As Adjusted \| Significant Unobservable Inputs (Level 3)
Financial Assets
Cash and cash equivalents	0	0
Securities held to maturity	0	0
Loans, net	1,890,113	1,798,916
Accrued interest receivable	10,759	9,907
Financial Liabilities
Time deposits	0	0
Demand and other deposits	0	0
Borrowings	0	0
Subordinated debentures	0	0
Accrued interest payable	$ 0	$ 0

LOANS - Recorded investment in loans on nonaccrual status and loans past due over 89 days still accruing (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	$ 12,847
Nonaccrual	14,451	$ 14,933
Interest income on nonaccrual loans	155
Amortized cost basis of individually analyzed loans	13,947	16,660
Collateral dependent
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Amortized cost basis of individually analyzed loans	13,840
Residential real estate
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	4,369
Nonaccrual	4,369	5,750
Amortized cost basis of individually analyzed loans	4,226	7,477
Multi-family
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	1,794
Nonaccrual	3,374	2,452
Amortized cost basis of individually analyzed loans	3,356	2,452
Commercial real estate
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	5,976
Nonaccrual	6,000	6,119
Amortized cost basis of individually analyzed loans	5,986	6,119
Commercial and industrial
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	708
Nonaccrual	708	612
Amortized cost basis of individually analyzed loans	$ 379	612
Construction and land development
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual		0
Amortized cost basis of individually analyzed loans		0
Consumer
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual		0
Amortized cost basis of individually analyzed loans		$ 0

DERIVATIVES - Cumulative basis adjustment for fair value hedges (Details) - Interest rate swap - Fair value hedges - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Derivative [Line Items]
Carrying amount of the hedged assets	$ 50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets	1,119
Fair value hedges		$ 0
Amortized cost basis of the closed portfolios	$ 410,300

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 3,763	$ 5,338
Unrealized losses on investment securities available for sale:
Change in unrealized gain (loss) on securities available for sale arising during the period, net of tax of $56 and ($27), respectively	204	(95)
Net change in unrealized gains (losses) on securities available for sale	204	(95)
Unrealized loss on cash flow hedges:
Change in unrealized loss on cash flow hedges arising during the period, net of tax of ($369) and $0, respectively	(1,332)
Total other comprehensive loss, net of tax	(1,128)	(95)
Total comprehensive income, net of tax	$ 2,635	$ 5,243

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481687/323-10-50-3

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482907/825-10-50-28

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482765/220-10-50-6

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-3

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 815
-SubTopic 40
-Name Accounting Standards Codification
-Section 65
-Paragraph 1
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480175/815-40-65-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 8
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-8

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 9
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-9

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Section 50
-Paragraph 11
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483443/250-10-50-11

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 250
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-Section 50
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-URI https://asc.fasb.org//1943274/2147483443/250-10-50-4

Reference 13: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
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-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480167/946-830-55-10

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section 45
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483581/946-220-45-7

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 944
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
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-URI https://asc.fasb.org//1943274/2147483586/944-220-S99-1

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482810/280-10-50-22

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(1)(d))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-3

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section S99
-Paragraph 1A
-Subparagraph (SX 210.13-01(a)(4)(i))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1A

Reference 20: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 470
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Reference 21: http://www.xbrl.org/2003/role/disclosureRef
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Reference 22: http://www.xbrl.org/2003/role/disclosureRef
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Reference 23: http://www.xbrl.org/2003/role/disclosureRef
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Reference 24: http://www.xbrl.org/2003/role/disclosureRef
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Reference 25: http://www.xbrl.org/2003/role/disclosureRef
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Reference 26: http://www.xbrl.org/2003/role/disclosureRef
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Reference 27: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 28: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
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-Section S99
-Paragraph 1B
-Subparagraph (SX 210.13-02(a)(5))
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-URI https://asc.fasb.org//1943274/2147480097/470-10-S99-1B

Reference 29: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
-SubTopic 10
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-Paragraph 30
-Subparagraph (b)
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-30

Reference 30: http://www.xbrl.org/2003/role/disclosureRef
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Reference 31: http://www.xbrl.org/2003/role/disclosureRef
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Reference 32: http://www.xbrl.org/2003/role/exampleRef
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Reference 33: http://www.xbrl.org/2003/role/disclosureRef
-Topic 280
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-URI https://asc.fasb.org//1943274/2147482810/280-10-50-32

Reference 34: http://www.xbrl.org/2003/role/disclosureRef
-Topic 205
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 7
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483499/205-20-50-7

Reference 35: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 28
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-28

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
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-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 38: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 220
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-Name Accounting Standards Codification
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-Paragraph 2
-Subparagraph (SX 210.5-03(20))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483621/220-10-S99-2

Reference 39: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 942
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483589/942-220-S99-1

+ Details

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
EARNINGS PER SHARE
Antidilutive stock options (in shares)	0	0
Earnings Per Share, Basic [Abstract]
Net income available to common stockholders	$ 3,763	$ 5,338
Less: Dividends paid and earnings allocated to participating securities	(118)	(208)
Income attributable to common stock	$ 3,645	$ 5,130
Weighted average common shares outstanding, including participating securities (in shares)	7,324,133	7,292,940
Less: Weighted average participating securities (in shares)	(245,685)	(284,027)
Weighted average common shares outstanding (in shares)	7,078,448	7,008,913
Basic EPS (in dollars per share)	$ 0.51	$ 0.73
Earnings Per Share, Diluted [Abstract]
Income attributable to common stock	$ 3,645	$ 5,130
Weighted average common shares outstanding (in shares)	7,078,448	7,008,913
Weighted average common equivalent shares outstanding (in shares)	59,396	94,998
Weighted average common and equivalent shares outstanding (in shares)	7,137,844	7,103,911
Diluted EPS (in dollars per share)	$ 0.51	$ 0.72

LOANS - Amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
LOANS
Individually evaluated for impairment	$ 13,947	$ 16,660
Individually evaluated for impairment	421	0
Collateral dependent
LOANS
Individually evaluated for impairment	13,840
Individually evaluated for impairment	421
Residential real estate
LOANS
Individually evaluated for impairment	4,226	7,477
Individually evaluated for impairment		0
Residential real estate \| Residential real estate
LOANS
Individually evaluated for impairment	4,226
Multi-family
LOANS
Individually evaluated for impairment	3,356	2,452
Individually evaluated for impairment	397	0
Multi-family \| Commercial real estate
LOANS
Individually evaluated for impairment	3,356
Individually evaluated for impairment	397
Commercial real estate
LOANS
Individually evaluated for impairment	5,986	6,119
Individually evaluated for impairment	24	0
Commercial real estate \| Commercial real estate
LOANS
Individually evaluated for impairment	5,986
Individually evaluated for impairment	24
Commercial and industrial
LOANS
Individually evaluated for impairment	379	612
Individually evaluated for impairment		$ 0
Commercial and industrial \| Business assets
LOANS
Individually evaluated for impairment	$ 272

EQUITY COMPENSATION PLANS - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Restricted Stock
Restricted Stock
Award vesting period	5 years
Number of Shares
Unvested, beginning of period (in shares)	245,004
Granted (in shares)	14,000
Vested (in shares)	(2,934)
Forfeited (in shares)	(3,568)
Unvested, end of period (in shares)	252,502
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)	$ 19.71
Granted (in dollars per share)	17.70
Vested (in dollars per share)	21.49
Forfeited (in dollars per share)	19.74
Unvested, end of period (in dollars per share)	$ 19.58
Compensation expenses	$ 303	$ 388
Unrealized compensation cost	$ 3,500
Weighted-average term for recognizing unrealized compensation cost	3 years 3 months 25 days
Total fair value of shares vested	$ 53	48
Restricted Stock Units (RSUs)
Restricted Stock
Award vesting period	3 years
Number of Shares
Unvested, beginning of period (in shares)	38,271
Granted (in shares)	0
Vested (in shares)	0
Forfeited (in shares)	0
Unvested, end of period (in shares)	38,271
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)	$ 19.73
Granted (in dollars per share)	0
Vested (in dollars per share)	0
Forfeited (in dollars per share)	0
Unvested, end of period (in dollars per share)	$ 19.73
Compensation expenses	$ 57	$ 51
Unrealized compensation cost	$ 256
Weighted-average term for recognizing unrealized compensation cost	1 year 1 month 20 days

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Cash dividends declared on common stock (in dollars per share)	$ 0.10	$ 0.10

FAIR VALUE- Additional quantitative information measured at fair value on non-nonrecurring basis (Details) - Nonrecurring - Significant Unobservable Inputs (Level 3) - Multi-family - Individually evaluated loans $ in Thousands	Dec. 31, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 1,180
Percentage of weighted average	50.00%
Average
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Percentage of weighted average	50.00%

SUBORDINATED DEBENTURES

3 Months Ended

Dec. 31, 2023

SUBORDINATED DEBENTURES [Abstract]

SUBORDINATED DEBENTURES

9. 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 December 31, 2023 and September 30, 2023, the unamortized issuance costs of the Notes were $0.4 million. For the three months ended December 31, 2023 and 2022, $14 thousand and $13 thousand, respectively, in 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.

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
INTEREST INCOME
Loans	$ 28,394	$ 21,979
Taxable securities	940	212
Other interest income	1,821	381
Total interest income	31,155	22,572
INTEREST EXPENSE
Savings, NOW and money market deposits	11,547	4,764
Time deposits	5,231	1,547
Borrowings	1,718	997
Total interest expense	18,496	7,308
Net interest income	12,659	15,264
Provision for credit losses	200	1,500
Net interest income after provision for credit losses	12,459	13,764
NON-INTEREST INCOME
Total non-interest income	3,254	1,411
NON-INTEREST EXPENSE
Salaries and employee benefits	5,242	4,332
Occupancy and equipment	1,746	1,477
Data processing	530	418
Professional fees	729	683
Federal deposit insurance premiums	375	158
Other expenses	2,048	1,203
Total non-interest expense	10,670	8,271
Income before income tax expense	5,043	6,904
Income tax expense	1,280	1,566
NET INCOME	$ 3,763	$ 5,338
Earnings per share:
BASIC (in dollars per share)	$ 0.51	$ 0.73
DILUTED (in dollars per share)	$ 0.51	$ 0.72
Loan servicing and fee income
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	$ 778	$ 678
Service charges on deposit accounts
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	85	63
Gain on sale of loans held-for-sale
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	2,326	578
Other income
NON-INTEREST INCOME
Revenue from contracts with customers, not included within the scope of ASC 606	$ 65	$ 92

SECURITIES - Gross Unrealized Losses and Fair Values of Investment Securities (Details)	3 Months Ended
	Sep. 30, 2023 USD ($) security	Dec. 31, 2023 USD ($) security
Available for sale [Abstract]
Less than 12 months, Fair value	$ 1,080,000	$ 13,432,000
Less than 12 months, Gross unrealized losses	(120,000)	(219,000)
12 months or longer, Fair value	9,809,000	10,073,000
12 months or longer, Gross unrealized losses	$ (2,013,000)	$ (1,736,000)
Number of securities \| security	12	15
Total, Fair value	$ 10,889,000	$ 23,505,000
Total, Gross unrealized losses	(2,133,000)	(1,955,000)
Held to maturity [Abstract]
12 months or longer, Fair value		3,835,000
12 months or longer, Fair value	3,760,000
12 months or longer, Gross unrealized losses		$ (206,000)
12 months or longer, Gross unrealized losses	$ (348,000)
Number of securities \| security	5	5
Total, Fair value		$ 3,835,000
Total, Fair value	$ 3,760,000
Total, Gross unrealized losses		(206,000)
Total, Gross unrealized losses	(348,000)
Other than temporary impairment loss recognized on any securities	0
Available for sale, allowance for credit losses		0
U.S. GSE residential mortgage-backed securities
Available for sale [Abstract]
12 months or longer, Fair value	142,000	201,000
12 months or longer, Gross unrealized losses	$ (180,000)	$ (108,000)
Number of securities \| security	5	5
Total, Fair value	$ 142,000	$ 201,000
Total, Gross unrealized losses	(180,000)	(108,000)
Held to maturity [Abstract]
12 months or longer, Fair value		1,384,000
12 months or longer, Fair value	1,353,000
12 months or longer, Gross unrealized losses		$ (96,000)
12 months or longer, Gross unrealized losses	$ (178,000)
Number of securities \| security	4	4
Total, Fair value		$ 1,384,000
Total, Fair value	$ 1,353,000
Total, Gross unrealized losses		(96,000)
Total, Gross unrealized losses	(178,000)
U.S. GSE commercial mortgage-backed securities
Held to maturity [Abstract]
12 months or longer, Fair value		2,451,000
12 months or longer, Fair value	2,407,000
12 months or longer, Gross unrealized losses		$ (110,000)
12 months or longer, Gross unrealized losses	$ (170,000)
Number of securities \| security	1	1
Total, Fair value		$ 2,451,000
Total, Fair value	$ 2,407,000
Total, Gross unrealized losses		(110,000)
Total, Gross unrealized losses	(170,000)
Corporate Bonds
Available for sale [Abstract]
Less than 12 months, Fair value	1,080,000	1,080,000
Less than 12 months, Gross unrealized losses	(120,000)	(120,000)
12 months or longer, Fair value	9,667,000	9,872,000
12 months or longer, Gross unrealized losses	$ (1,833,000)	$ (1,628,000)
Number of securities \| security	7	7
Total, Fair value	$ 10,747,000	$ 10,952,000
Total, Gross unrealized losses	$ (1,953,000)	(1,748,000)
Held to maturity [Abstract]
Available for sale, allowance for credit losses		0
Obligations of U.S. Government agencies and sponsored entities
Held to maturity [Abstract]
Available for sale, allowance for credit losses		0
Collateralized loan obligations
Available for sale [Abstract]
Less than 12 months, Fair value		12,352,000
Less than 12 months, Gross unrealized losses		$ (99,000)
Number of securities \| security		3
Total, Fair value		$ 12,352,000
Total, Gross unrealized losses		(99,000)
Held to maturity [Abstract]
Available for sale, allowance for credit losses		$ 0

EQUITY COMPENSATION PLANS

3 Months Ended

Dec. 31, 2023

EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLANS

5. 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 December 31, 2023. Of the total 346,000 shares of common stock approved for issuance under the 2018 Plan, 11,352 shares remain available for issuance at December 31, 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.

There were 33,400 and 10,614 stock options exercised during the three months ended December 31, 2023 and 2022, respectively.

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, 2023	198,333	$	8.85	$	1,864	1.19 years
Granted	—		—
Exercised	(33,400)		5.04
Forfeited	(6,000)		16.25
Outstanding, December 31, 2023 ⁽¹⁾	158,933	$	9.37	$	1,314	1.14 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:


	Three Months Ended December 31,
(in thousands)	2023		2022
Intrinsic value of options exercised	$	414	$	103
Cash received from option exercises		168		106
Tax benefit from option exercises		145		36

There was no compensation expense attributable to stock options for the three months ended December 31, 2023 and 2022.

Restricted Stock Awards

During the three months ended December 31, 2023, restricted stock awards of 14,000 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, 2023	245,004	$	19.71
Granted	14,000		17.70
Vested	(2,934)		21.49
Forfeited	(3,568)		19.74
Unvested, December 31, 2023	252,502	$	19.58

Compensation expense attributable to restricted stock awards was $303 thousand and $388 thousand for the three months ended December 31, 2023 and 2022, respectively. As of December 31, 2023, there was $3.5 million of total unrealized compensation cost related to unvested restricted stock, expected to be recognized over a weighted-average term of 3.32 years. The total fair value of shares vested during the three months ended December 31, 2023 and 2022 was $53 thousand and $48 thousand, 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 three months ended December 31, 2023:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2023	38,271	$	19.73
Granted	—		—
Vested	—		—
Forfeited	—		—
Unvested, December 31, 2023	38,271	$	19.73

No RSUs were granted during the three months ended December 31, 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 $57 thousand and $51 thousand, respectively, for the three months ended December 31, 2023 and 2022. As of December 31, 2023, there was $256 thousand of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 1.14 years.

BORROWINGS

3 Months Ended

Dec. 31, 2023

BORROWINGS [Abstract]

BORROWINGS

8. BORROWINGS

Federal Home Loan Bank (“FHLB”) Advances

At December 31, 2023 and September 30, 2023, FHLB term borrowings outstanding were $126.7 million, all of which were fixed rate.

There were no overnight borrowings outstanding at December 31, 2023. At September 30, 2023, the Company had FHLB overnight borrowings outstanding of $49.0 million at a rate of 5.59%.

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 December 31, 2023 and September 30, 2023. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to an additional total of $187.1 million at December 31, 2023.


	Balance at December 31,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	—	—	%

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	$	126,665	3.65	%


	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	%

Federal Reserve Borrowings

At December 31, 2023 and September 30, 2023, the Company’s borrowings from the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) were $2.3 million and $4.1 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 December 31, 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 December 31, 2023 and September 30, 2023.

- 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

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables)

3 Months Ended

Dec. 31, 2023

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME [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, 2023	$	(1,670)	$	348	$	(1,322)
Other comprehensive income (loss), before reclassification		204		(1,332)		(1,128)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive income (loss)		204		(1,332)		(1,128)
Balance at December 31, 2023	$	(1,466)	$	(984)	$	(2,450)



	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, before reclassification		(95)		—		(95)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive loss		(95)		—		(95)
Balance at December 31, 2022	$	(715)	$	—	$	(715)

EQUITY COMPENSATION PLANS (Tables)

3 Months Ended

Dec. 31, 2023

EQUITY COMPENSATION PLANS

Summary of Stock Option Activity

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, 2023	198,333	$	8.85	$	1,864	1.19 years
Granted	—		—
Exercised	(33,400)		5.04
Forfeited	(6,000)		16.25
Outstanding, December 31, 2023 ⁽¹⁾	158,933	$	9.37	$	1,314	1.14 years

(1)	All outstanding options are fully vested and exercisable.

Schedule of information related to the stock option plan


	Three Months Ended December 31,
(in thousands)	2023		2022
Intrinsic value of options exercised	$	414	$	103
Cash received from option exercises		168		106
Tax benefit from option exercises		145		36

Summary of Restricted Stock Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2023	245,004	$	19.71
Granted	14,000		17.70
Vested	(2,934)		21.49
Forfeited	(3,568)		19.74
Unvested, December 31, 2023	252,502	$	19.58

Summary of Restricted Stock Units Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, October 1, 2023	38,271	$	19.73
Granted	—		—
Vested	—		—
Forfeited	—		—
Unvested, December 31, 2023	38,271	$	19.73

FAIR VALUE - Changes in Loan Servicing Rights (Details) - Mortgage Servicing Rights - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Changes in Mortgage Servicing Rights.
Beginning balance	$ 4,479	$ 4,353
Additions	537	136
Adjustment to fair value	(348)	(87)
Ending balance	$ 4,668	$ 4,402

LOANS - Company's Loans by Year of Origination and Internally Assigned Credit Risk and Gross Charge-offs (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	$ 357,187
2022	711,637
2021	338,205
2020	110,590
2019	148,070
Prior	264,760
Revolving Loans To Term Loans	25,631
Loans	1,957,199
Total Loans	1,956,080
Residential real estate
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	191,238
2022	207,906
2021	64,906
2020	40,970
2019	83,996
Prior	99,077
Revolving Loans To Term Loans	25,631
Loans	714,843
Total Loans	713,724
Amortized cost for loans in the closed portfolio under the portfolio layer method	1,100
Residential real estate \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	191,238
2022	207,166
2021	64,906
2020	39,772
2019	79,581
Prior	98,150
Revolving Loans To Term Loans	24,975
Loans	705,788
Residential real estate \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2020	522
2019	230
Loans	752
Residential real estate \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2022	740
2020	676
2019	4,185
Prior	927
Revolving Loans To Term Loans	656
Loans	7,184
Multi-family
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	3,533
2022	299,217
2021	164,258
2020	38,386
2019	10,854
Prior	56,601
Loans	572,849
Multi-family \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	3,533
2022	299,217
2021	162,678
2020	36,592
2019	10,854
Prior	56,601
Loans	569,475
Multi-family \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2021	1,580
2020	1,794
Loans	3,374
Commercial real estate
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	86,834
2022	189,422
2021	89,194
2020	26,792
2019	52,949
Prior	102,821
Loans	548,012
Commercial real estate \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	86,834
2022	187,570
2021	80,761
2020	26,300
2019	42,476
Prior	95,265
Loans	519,206
Commercial real estate \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2022	1,852
2021	8,433
2020	293
2019	3,647
Prior	6,427
Loans	20,652
Commercial real estate \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2020	199
2019	6,826
Prior	1,129
Loans	8,154
Commercial and industrial
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	74,352
2022	11,392
2021	11,194
2020	4,442
2019	271
Prior	6,261
Loans	107,912
Commercial and industrial \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	74,352
2022	11,392
2021	10,015
2020	4,407
2019	126
Prior	5,274
Loans	105,566
Commercial and industrial \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2021	913
Prior	540
Loans	1,453
Commercial and industrial \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2021	266
2020	35
2019	145
Prior	447
Loans	893
Construction and land development
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	904
2022	3,613
2021	8,653
Loans	13,170
Construction and land development \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	904
2022	3,613
2021	8,653
Loans	13,170
Consumer
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	326
2022	87
Loans	413
Consumer \| Pass [Member]
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	326
2022	87
Loans	$ 413

LOANS - Activity in the allowance by portfolio segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Recoveries	$ 677
Provision for credit losses	200
Ending balance	19,658
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	14,686	$ 12,844
Recoveries		60
Provision (credit) for loan losses		1,500
Ending Balance		14,404
Residential Real Estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Provision for credit losses	440
Ending balance	5,001
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	4,778	3,951
Provision (credit) for loan losses		557
Ending Balance		4,508
Multi-family
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Recoveries	567
Provision for credit losses	(271)
Ending balance	4,671
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	4,206	4,308
Provision (credit) for loan losses		1,389
Ending Balance		5,697
Commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Provision for credit losses	(103)
Ending balance	8,390
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	3,197	3,707
Provision (credit) for loan losses		(473)
Ending Balance		3,234
Commercial and industrial
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Recoveries	110
Provision for credit losses	142
Ending balance	1,419
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	2,368	761
Recoveries		60
Provision (credit) for loan losses		31
Ending Balance		852
Construction and land development
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Provision for credit losses	(6)
Ending balance	122
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	104	115
Provision (credit) for loan losses		(11)
Ending Balance		104
Consumer
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Provision for credit losses	(2)
Ending balance	55
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance	33	2
Provision (credit) for loan losses		7
Ending Balance		$ 9
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	4,095
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Residential Real Estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	(217)
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Multi-family
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	169
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	5,296
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Commercial and industrial
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	(1,201)
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Construction and land development
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	24
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment \| Consumer
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Ending balance	$ 24

FAIR VALUE - Significant Inputs Utilized in Cash Flow Models (Details)	3 Months Ended	12 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Fair Value Hierarchy
Servicing rights, valuation technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
SBA Loans
Fair Value Hierarchy
Servicing rights, valuation technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	0.1238	0.129
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.0961	0.1009
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	0.1488	0.154
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.4146	0.4162
Significant Unobservable Inputs (Level 3) \| Prepayment Rate
Fair Value Hierarchy
Servicing rights, measurement input	0.2625
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input		0.2625
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.0885	0.0829
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.3024	0.2926
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	1 year 6 months 18 days	1 year 2 months 12 days
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	1 year 29 days	1 year 2 months 1 day
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	2 years 9 months 10 days	2 years 9 months 18 days
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	5 years 8 months 15 days	5 years 9 months 21 days

REGULATORY MATTERS (Tables)

3 Months Ended

Dec. 31, 2023

REGULATORY MATTERS

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
December 31, 2023
Total capital to risk-weighted assets	$	210,071	14.31	%	$	117,472	8.00	%	$	154,182	10.50	%	$	146,840	10.00	%
Tier 1 capital to risk-weighted assets		193,324	13.17	%		88,104	6.00	%		124,814	8.50	%		117,472	8.00	%
Common equity tier 1 capital to risk-weighted assets		193,324	13.17	%		66,078	4.50	%		102,788	7.00	%		95,446	6.50	%
Tier 1 capital to average total assets		193,324	9.08	%		85,131	4.00	%		N/A	N/A			106,414	5.00	%

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	%

REGULATORY MATTERS (Details) $ in Thousands	3 Months Ended
REGULATORY MATTERS (Details) $ in Thousands	Dec. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)
Total capital to risk-weighted assets
Actual capital, Amount	$ 210,071	$ 205,786
Actual capital, Ratio	0.1431	0.1460
Minimum capital adequacy requirement, Amount	$ 117,472	$ 112,755
Minimum capital adequacy requirement, Ratio	0.0800	0.0800
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 154,182	$ 147,991
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.1050	0.1050
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 146,840	$ 140,944
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	$ 193,324	$ 190,928
Actual capital, Ratio	0.1317	0.1355
Minimum capital adequacy requirement, Amount	$ 88,104	$ 84,566
Minimum capital adequacy requirement, Ratio	0.0600	0.0600
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 124,814	$ 119,802
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.0850	0.0850
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 117,472	$ 112,755
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	$ 193,324	$ 190,928
Actual capital, Ratio	0.1317	0.1355
Minimum capital adequacy requirement, Amount	$ 66,078	$ 63,425
Minimum capital adequacy requirement, Ratio	0.0450	0.0450
Minimum capital adequacy requirement with capital conservation buffer, Amount	$ 102,788	$ 98,661
Minimum capital adequacy requirement with capital conservation buffer, Ratio	0.0700	0.0700
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 95,446	$ 91,613
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	$ 193,324	$ 190,928
Actual capital, Ratio	0.0908	0.0916
Minimum capital adequacy requirement, Amount	$ 85,131	$ 83,338
Minimum capital adequacy requirement, Ratio	0.0400	0.0400
Minimum to be well capitalized under prompt corrective action provisions, Amount	$ 106,414	$ 104,173
Minimum to be well capitalized under prompt corrective action provisions, Ratio	0.0500	0.0500
Cash dividends to the Holding Company	$ 1,100
Retained earnings available to pay dividends	$ 45,100

DERIVATIVES (Tables)

3 Months Ended

Dec. 31, 2023

DERIVATIVES [Abstract]

cash flow hedges included in the consolidated statements of financial condition


	Assets				Liabilities
	Notional				Notional
(in thousands)	Amount		Fair Value ⁽¹⁾		Amount		Fair Value⁽¹⁾
December 31, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,256)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,105)
Total	$	—	$	—	$	125,000	$	(2,361)

September 30, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	75,000	$	445	$	—	$	—
Fair value hedges:
Interest rate swaps (Loans)		—		—		—		—
Total	$	75,000	$	445	$	—	$	—

(1)

Derivatives in a positive position are recorded as “Other assets” and derivatives in a negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition.

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


	Three Months Ended December 31,
(in thousands)	2023		2022
Loss recognized in other comprehensive income	$	(1,332)	$	—
Gain (loss) recognized in interest expense		187		—

Derivative instruments designated as fair value hedges


	Three Months Ended
	December 31,
(in thousands)	2023
Gain on hedged items recorded in interest income on loans	$	14
Gains on hedge recorded in interest income on loans		64

Cumulative basis adjustment for fair value hedges


	December 31,
(in thousands)	2023
Loans receivable:
Carrying amount of the hedged assets⁽¹⁾	$	50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets		1,119

(1)

This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At December 31, 2023, the amortized cost basis of the closed portfolios used in the hedging relationships was $410.3 million. The cumulative basis adjustments associated with these hedging relationships was $1.1 million and the amount of the designated hedged items was $50.0 million.

DERIVATIVES - Fair value hedges on the Consolidated Statements of Income (Details) - Interest rate swap - Fair value hedges - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Fair value hedges		$ 0
Gain on hedged items recorded in interest income on loans	$ 14
Gains on hedge recorded in interest income on loans	$ 64

SECURITIES - Investment Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Available for sale [Abstract]
Amortized Cost	$ 63,292
Amortized cost		$ 13,022
Gross unrealized gains	82
Gross unrealized losses	(1,955)	(2,133)
Allowance for credit losses	0
Fair value	61,419
Fair Value		10,889
Held to maturity [Abstract]
Amortized cost	4,041
Amortized cost		4,108
Gross unrealized losses	(206)	(348)
Fair value	3,835	3,760
Allowance for credit losses	0
U.S. GSE residential mortgage-backed securities
Available for sale [Abstract]
Amortized Cost	309
Amortized cost		322
Gross unrealized losses	(108)	(180)
Fair value	201
Fair Value		142
Held to maturity [Abstract]
Amortized cost	1,480
Amortized cost		1,531
Gross unrealized losses	(96)	(178)
Fair value	1,384	1,353
Collateralized loan obligations
Available for sale [Abstract]
Amortized Cost	50,283
Gross unrealized gains	82
Gross unrealized losses	(99)
Allowance for credit losses	0
Fair value	50,266
U.S. GSE commercial mortgage-backed securities
Held to maturity [Abstract]
Amortized cost	2,561
Amortized cost		2,577
Gross unrealized losses	(110)	(170)
Fair value	2,451	2,407
Corporate Bonds
Available for sale [Abstract]
Amortized Cost	12,700
Amortized cost		12,700
Gross unrealized losses	(1,748)	(1,953)
Allowance for credit losses	0
Fair value	10,952
Fair Value		10,747
Asset Pledged as Collateral without Right \| Deposits
Held to maturity [Abstract]
Investment securities pledged to secure public deposits	$ 2,000	$ 2,000

FAIR VALUE (Tables)

3 Months Ended

Dec. 31, 2023

FAIR VALUE [Abstract]

Assets Measured at Fair Value on Recurring Basis


	December 31, 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	$	201	$	—	$	201	$	—
Collateralized loan obligations		50,266		—		50,266		—
Corporate bonds		10,952		—		10,952		—
Loan servicing rights		4,668		—		—		4,668
Total	$	66,087	$	—	$	61,419	$	4,668

Financial liabilties:
Derivatives	$	2,361	$	—	$	2,361	$	—


	September 30, 2023
			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	$	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

Changes in Mortgage Servicing Rights


	Three Months Ended December 31,
(in thousands)	2023		2022
Balance at beginning of period	$	4,479	$	4,353
Additions		537		136
Adjustment to fair value		(348)		(87)
Balance at end of period	$	4,668	$	4,402

Assets Measured at Fair Value on a Non-recurring Basis

December 31, 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)

Individually evaluated loans - Multi-family

1,180

—

1,180

Summary of additional quantitative information about level 3 fair value measured at fair value on non-nonrecurring

Range

December 31, 2023

Fair Value

Valuation Technique

Unobservable Input

(Weighted Average)

(Dollar in thousands)

Individually evaluated loans - Multi-family

1,180

Appraisal of collateral

Appraisal and

50.00%

adjustments ⁽¹⁾

(50.00%)

Carrying Amounts and Fair Value of Financial Instruments


	December 31, 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	$	177,207	$	177,207	$	—	$	—	$	177,207
Securities held-to-maturity		4,041		—		3,835		—		3,835
Loans, net		1,937,541		—		—		1,890,113		1,890,113
Accrued interest receivable		11,915		—		1,156		10,759		11,915

Financial liabilities:
Time deposits		522,198		—		520,022		—		520,022
Demand and other deposits		1,382,397		1,382,397		—		—		1,382,397
Borrowings		128,953		—		128,165		—		128,165
Subordinated debentures		24,635		—		26,601		—		26,601
Accrued interest payable		1,724		161		1,563		—		1,724


	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

EARNINGS PER SHARE (Tables)

3 Months Ended

Dec. 31, 2023

EARNINGS PER SHARE

Calculations of Basic and Diluted Earnings Per Share


	Three Months Ended December 31,
(in thousands, except share and per share data)	2023		2022

Net income available to common stockholders	$	3,763	$	5,338
Less: Dividends paid and earnings allocated to participating securities		(118)		(208)
Income attributable to common stock	$	3,645	$	5,130
Weighted average common shares outstanding, including participating securities		7,324,133		7,292,940
Less: Weighted average participating securities		(245,685)		(284,027)
Weighted average common shares outstanding		7,078,448		7,008,913
Basic EPS	$	0.51	$	0.73

Income attributable to common stock	$	3,645	$	5,130
Weighted average common shares outstanding		7,078,448		7,008,913
Weighted average common equivalent shares outstanding		59,396		94,998
Weighted average common and equivalent shares outstanding		7,137,844		7,103,911
Diluted EPS	$	0.51	$	0.72

LOANS (Tables)

3 Months Ended

Dec. 31, 2023

LOANS

Major Classifications of Loans


(in thousands)	December 31, 2023		September 30, 2023
Residential real estate	$	714,843	$	657,332
Multi-family		572,849		578,895
Commercial real estate		548,012		537,314
Commercial and industrial		107,912		87,575
Construction and land development		13,170		13,021
Consumer		413		425
Total loans		1,957,199		1,874,562
Allowance for credit losses		(19,658)		(14,686)
Total loans, net	$	1,937,541	$	1,859,876

Activity in Allowance for Loan Losses by Portfolio Segment


	Three Months Ended December 31, 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 credit losses:
Beginning balance, prior to adoption of ASC 326	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Impact of adopting ASC 326		(217)		169		5,296		(1,201)		24		24		4,095
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		567		—		110		—		—		677
Provision for credit losses		440		(271)		(103)		142		(6)		(2)		200
Ending balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658


	Three Months Ended December 31, 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	$	3,951	$	4,308	$	3,707	$	761	$	115	$	2	$	12,844
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		60		—		—		60
Provision for loan losses		557		1,389		(473)		31		(11)		7		1,500
Ending balance	$	4,508	$	5,697	$	3,234	$	852	$	104	$	9	$	14,404

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


	December 31, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for credit losses:
Ending allowance balance attributable to loans:
Individually analyzed	$	—	$	397	$	24	$	—	$	—	$	—	$	421
Collectively analyzed		5,001		4,274		8,366		1,419		122		55		19,237
Total ending allowance balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658
Loans:
Loans individually analyzed	$	4,226	$	3,356	$	5,986	$	379	$	—	$	—	$	13,947
Loans collectively analyzed		710,617		569,493		542,026		107,533		13,170		413		1,943,252
Total ending loans balance	$	714,843	$	572,849	$	548,012	$	107,912	$	13,170	$	413	$	1,957,199


	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:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		4,778		4,206		3,197		2,368		104		33		14,686
Purchased-credit impaired		—		—		—		—		—		—		—
Total ending allowance balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686
Loans:
Loans individually evaluated for impairment	$	7,477	$	2,452	$	6,119	$	612	$	—	$	—	$	16,660
Loans collectively evaluated for impairment		649,855		576,443		531,195		86,835		13,021		425		1,857,774
Purchased-credit impaired		—		—		—		128		—		—		128
Total ending loans balance	$	657,332	$	578,895	$	537,314	$	87,575	$	13,021	$	425	$	1,874,562

Recorded Investment of Loans on Nonaccrual Status and Loans Past Due


	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing

Residential real estate	$	4,369	$	4,369	$	—
Multi-family		1,794		3,374		—
Commercial real estate		5,976		6,000		—
Commercial and industrial		708		708		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,847	$	14,451	$	—

Amortized Cost Basis and Related Allowance for Credit Loss of Individually Analyzed Loans Considered as Collateral Dependent


	December 31, 2023
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,226	$	—
Multi-family⁽²⁾		3,356		397
Commercial real estate ⁽²⁾		5,986		24
Commercial and industrial ⁽¹⁾		272		—
Total	$	13,840	$	421

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

Impaired Loans by Portfolio Segment


	September 30, 2023
	Unpaid
	Principal		Recorded		Allowance
(in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Residential real estate	$	7,484	$	7,477	$	—
Multi-family		3,282		2,452		—
Commercial real estate		6,118		6,119		—
Commercial and industrial		846		612		—
Total	$	17,730	$	16,660	$	—


	Three Months Ended
	December 31, 2022
	Average		Interest
	Recorded		Income
(in thousands)	Investment		Recognized⁽¹⁾
With no related allowance recorded:
Residential real estate	$	3,733	$	24
Multi-family		2,346		2
Commercial real estate		5,883		—
Commercial and industrial		468		23
Total	$	12,430	$	49

(1)	Accrual basis interest income recognized approximates cash basis income.

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
	Days		Days		89 Days				due and				Total
December 31, 2023	Past Due		Past Due		Past Due		Non-accrual		Non-accrual		Current		Loans
Residential real estate	$	4,508	$	2,360	$	—	$	4,369	$	11,237	$	703,606	$	714,843
Multi-family		—		—		—		3,374		3,374		569,475		572,849
Commercial real estate		2,666		3,212		—		6,000		11,878		536,134		548,012
Commercial and industrial		584		555		—		708		1,847		106,065		107,912
Construction and land development		—		—		—		—		—		13,170		13,170
Consumer		—		—		—		—		—		413		413
Total	$	7,758	$	6,127	$	—	$	14,451	$	28,336	$	1,928,863	$	1,957,199


(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.

Loan Portfolio Based on Internal Rating Category


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	191,238	$	207,166	$	64,906	$	39,772	$	79,581	$	98,150	$	—	$	24,975	$	705,788
Special Mention		—		—		—		522		230		—		—		—		752
Substandard		—		740		—		676		4,185		927		—		656		7,184
Total Residential real estate		191,238		207,906		64,906		40,970		83,996		99,077		—		25,631		713,724
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family
Pass		3,533		299,217		162,678		36,592		10,854		56,601		—		—		569,475
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,580		1,794		—		—		—		—		3,374
Total Multi-family		3,533		299,217		164,258		38,386		10,854		56,601		—		—		572,849
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial real estate
Pass		86,834		187,570		80,761		26,300		42,476		95,265		—		—		519,206
Special Mention		—		1,852		8,433		293		3,647		6,427		—		—		20,652
Substandard		—		—		—		199		6,826		1,129		—		—		8,154
Total Commercial real estate		86,834		189,422		89,194		26,792		52,949		102,821		—		—		548,012
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Commercial and industrial
Pass		74,352		11,392		10,015		4,407		126		5,274		—		—		105,566
Special Mention		—		—		913		—		—		540		—		—		1,453
Substandard		—		—		266		35		145		447		—		—		893
Total Commercial and industrial		74,352		11,392		11,194		4,442		271		6,261		—		—		107,912
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Construction and land development
Pass		904		3,613		8,653		—		—		—		—		—		13,170
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		904		3,613		8,653		—		—		—		—		—		13,170
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Pass		326		87		—		—		—		—		—		—		413
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		326		87		—		—		—		—		—		—		413
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Total Loans	$	357,187	$	711,637	$	338,205	$	110,590	$	148,070	$	264,760	$	—	$	25,631	$	1,956,080

Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(1)


	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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Other comprehensive (loss) income, net of tax:
Change in unrealized gain (loss) on investment securities available for sale, tax	$ 56	$ (27)
Reclassification adjustment for gains realized in net income, tax	0	0
Change in unrealized loss on cash flow hedges arising during the period, net of tax	$ (369)	$ 0

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Securities:
Held to maturity, fair value	$ 3,835	$ 3,760
Held to maturity, allowance for credit losses	0
Available for sale, allowance for credit losses	0
LIABILITIES AND STOCKHOLDERS' EQUITY
Aggregate principal amount	25,000	25,000
Unamortized issuance costs	$ 365	$ 379
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	150,000
Preferred stock, Series A, shares outstanding (in shares)	150,000	150,000
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)	7,195,012	7,170,419
Common stock, shares outstanding (in shares)	7,195,012	7,170,419

DERIVATIVES

3 Months Ended

Dec. 31, 2023

DERIVATIVES [Abstract]

DERIVATIVES

10. DERIVATIVES

As part of its asset liability management, the Company utilizes interest rate swap agreements to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent the amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

The following sets forth information regarding the Company’s derivative financial instruments at the periods indicated:


	Assets				Liabilities
	Notional				Notional
(in thousands)	Amount		Fair Value ⁽¹⁾		Amount		Fair Value⁽¹⁾
December 31, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,256)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,105)
Total	$	—	$	—	$	125,000	$	(2,361)

September 30, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	75,000	$	445	$	—	$	—
Fair value hedges:
Interest rate swaps (Loans)		—		—		—		—
Total	$	75,000	$	445	$	—	$	—

(1)

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps with notional amounts totaling $75.0 million as of December 31, 2023 and September 30, 2023, were designated as cash flow hedges of certain Brokered Certificates of Deposit. The swaps were determined to be fully effective during the periods presented and therefore no amount of ineffectiveness has been included in net income. The aggregate fair value of the swaps is recorded in other assets/(other liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments for the periods indicated. There were no cash flow hedges for the three months ended December 31, 2022.


	Three Months Ended December 31,
(in thousands)	2023		2022
Loss recognized in other comprehensive income	$	(1,332)	$	—
Gain (loss) recognized in interest expense		187		—

Fair Value Hedges of Interest Rate Risk

On November 1, 2023, the Company entered into a three year interest rate swap with a notional amount totaling $50 million which was designated as a fair value hedge of certain fixed rate residential mortgages. The Company pays a fixed rate of 4.56% and receives a floating rate based on the secured overnight financing rate (“SOFR”) for the life of the agreement without an exchange of the underlying notional amount. The hedge was determined to be effective during the quarter ended December 31, 2023 and the Company expects the hedge to remain effective during the remaining term of the swap. The gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk is recognized in interest income.

The following table presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the three months ended December 31, 2023. There were no fair value hedges for the three months ended December 31, 2022.


	Three Months Ended
	December 31,
(in thousands)	2023
Gain on hedged items recorded in interest income on loans	$	14
Gains on hedge recorded in interest income on loans		64

At December 31, 2023, the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges. There were no fair value hedges at September 30, 2023.


	December 31,
(in thousands)	2023
Loans receivable:
Carrying amount of the hedged assets⁽¹⁾	$	50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets		1,119

(1)

Credit-Risk-Related Contingent Features

The Company has minimum collateral posting thresholds with certain of its derivative counterparties. If the termination value of derivatives is a net liability position, the Company is required to post collateral against its obligations under the agreements. However, if the termination value of derivatives is a net asset position, the counterparty is required to post collateral to the Company. As of December 31, 2023, the Company posted $2.2 million in collateral to its counterparties in a net liability position. At September 30, 2023, the Company did not post collateral to its counterparties. At December 31, 2023, the Company received no collateral from its counterparties under the agreements in a net asset position. At September 30, 2023, the Company received $0.7 million in collateral from its counterparties under the agreements in a net asset position.

REGULATORY MATTERS

3 Months Ended

Dec. 31, 2023

REGULATORY MATTERS

REGULATORY MATTERS

6. 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 December 31, 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 December 31, 2023 and September 30, 2023, 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
December 31, 2023
Total capital to risk-weighted assets	$	210,071	14.31	%	$	117,472	8.00	%	$	154,182	10.50	%	$	146,840	10.00	%
Tier 1 capital to risk-weighted assets		193,324	13.17	%		88,104	6.00	%		124,814	8.50	%		117,472	8.00	%
Common equity tier 1 capital to risk-weighted assets		193,324	13.17	%		66,078	4.50	%		102,788	7.00	%		95,446	6.50	%
Tier 1 capital to average total assets		193,324	9.08	%		85,131	4.00	%		N/A	N/A			106,414	5.00	%

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	%

Dividend restrictions - The Company’s principal source of funds for dividend and debt service payments is dividends received from the Bank. During the three months ended December 31, 2023 the Bank paid $1.1 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 December 31, 2023, the Bank had $45.1 million of retained net income available for dividends to the Company, without obtaining regulatory approval, provided that the Bank satisfies the regulatory capital requirements, including the capital conservation buffer, disclosed above.

- 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

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
ASSETS
Cash and non-interest-bearing deposits due from banks	$ 10,277	$ 5,496
Interest-bearing deposits due from banks	166,407	186,614
Federal funds sold	523	514
Total cash and cash equivalents	177,207	192,624
Securities:
Securities held to maturity, fair value of $3,835 at December 31, 2023 and $3,760 at September 30, 2023 (net of allowance for credit losses of $0 at December 31, 2023)	4,041
Securities held to maturity, fair value of $3,835 at December 31, 2023 and $3,760 at September 30, 2023 (net of allowance for credit losses of $0 at December 31, 2023)		4,108
Securities available for sale, at fair value (net of allowance for credit losses of $0 at December 31, 2023)	61,419
Securities available for sale, at fair value (net of allowance for credit losses of $0 at December 31, 2023)		10,889
Loans held for sale	8,904
Loans	1,957,199
Allowance for credit losses	(19,658)
Total loans, net	1,937,541
Loans	1,957,199	1,874,562
Allowance for loan losses		(14,686)
Total loans, net		1,859,876
Premises and equipment, net	15,886	16,057
Operating lease assets	9,754	10,193
Accrued interest receivable	11,915	10,636
Prepaid post retirement plan	3,503	3,534
Stock in Federal Home Loan Bank ("FHLB"), at cost	8,612	10,547
Goodwill	19,168	19,168
Other intangible assets	311	327
Loan servicing rights	4,668	4,479
Deferred income taxes, net	2,463	1,509
Other assets	4,668	5,588
TOTAL ASSETS	2,270,060	2,149,535
Deposits:
Non-interest-bearing demand	207,781	185,731
Savings, NOW and money market	1,174,616	1,019,263
Time	522,198	530,076
Total deposits	1,904,595	1,735,070
Borrowings	128,953	179,849
Subordinated debentures ($25,000 face amount less unamortized debt issuance costs of $365 and $379 at December 31, 2023 and September 30, 2023, respectively)	24,635	24,621
Operating lease liabilities	10,459	10,899
Accrued interest payable	1,724	1,821
Other liabilities	14,864	11,368
TOTAL LIABILITIES	2,085,230	1,963,628
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	2,963
Common stock (par value $0.01; 17,000,000 shares authorized; issued and outstanding 7,195,012 and 7,170,419 at December 31, 2023 and September 30, 2023, respectively)	72	72
Surplus	125,694	125,501
Retained earnings	58,551	58,693
Accumulated other comprehensive loss, net of tax	(2,450)	(1,322)
TOTAL STOCKHOLDERS' EQUITY	184,830	185,907
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,270,060	$ 2,149,535

FAIR VALUE - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Financial Assets
Fair value	$ 61,419
Fair Value		$ 10,889
Loan servicing rights	4,668	4,479
Derivatives		445
U.S. GSE residential mortgage-backed securities
Financial Assets
Fair value	201
Fair Value		142
Corporate Bonds
Financial Assets
Fair value	10,952
Fair Value		10,747
Recurring
Financial Assets
Derivatives	2,361	445
Total	66,087	15,813
Recurring \| U.S. GSE residential mortgage-backed securities
Financial Assets
Fair value	201
Fair Value		142
Recurring \| Collateralized loan obligations
Financial Assets
Fair value	50,266
Recurring \| Corporate Bonds
Financial Assets
Fair value	10,952
Fair Value		10,747
Recurring \| Loan servicing rights
Financial Assets
Loan servicing rights	4,668	4,479
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1)
Financial Assets
Derivatives	0	0
Total	0	0
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Fair value	0
Fair Value		0
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Collateralized loan obligations
Financial Assets
Fair value	0
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Corporate Bonds
Financial Assets
Fair value	0
Fair Value		0
Recurring \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Loan servicing rights
Financial Assets
Loan servicing rights	0	0
Recurring \| Significant Other Observable Inputs (Level 2)
Financial Assets
Derivatives	2,361	445
Total	61,419	11,334
Recurring \| Significant Other Observable Inputs (Level 2) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Fair value	201
Fair Value		142
Recurring \| Significant Other Observable Inputs (Level 2) \| Collateralized loan obligations
Financial Assets
Fair value	50,266
Recurring \| Significant Other Observable Inputs (Level 2) \| Corporate Bonds
Financial Assets
Fair value	10,952
Fair Value		10,747
Recurring \| Significant Other Observable Inputs (Level 2) \| Loan servicing rights
Financial Assets
Loan servicing rights	0	0
Recurring \| Significant Unobservable Inputs (Level 3)
Financial Assets
Derivatives	0	0
Total	4,668	4,479
Recurring \| Significant Unobservable Inputs (Level 3) \| U.S. GSE residential mortgage-backed securities
Financial Assets
Fair value	0
Fair Value		0
Recurring \| Significant Unobservable Inputs (Level 3) \| Collateralized loan obligations
Financial Assets
Fair value	0
Recurring \| Significant Unobservable Inputs (Level 3) \| Corporate Bonds
Financial Assets
Fair value	0
Fair Value		0
Recurring \| Significant Unobservable Inputs (Level 3) \| Loan servicing rights
Financial Assets
Loan servicing rights	$ 4,668	$ 4,479

BORROWINGS - Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Federal Home Loan Bank Advances
FHLB term borrowings outstanding	$ 126,665	$ 126,665
Total FHLB advances	126,665	175,665
Borrowings	128,953	179,849
Available additional borrowings	187,100
Overnight borrowings
Federal Home Loan Bank Advances
Overnight	$ 0
FHLB overnight
Federal Home Loan Bank Advances
Overnight		$ 49,000
FHLB term borrowings, rate		5.59%

EQUITY COMPENSATION PLANS - Stock Options (Details) - Stock Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 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)	198,333
Granted (in shares)	0
Exercised (in shares)	(33,400)		(10,614)
Forfeited (in shares)	(6,000)
Outstanding, end of period (in shares)	158,933	198,333
Weighted-Average Exercise Price Per Share
Outstanding, beginning of period (in dollars per share)	$ 8.85
Granted (in dollars per share)	0
Exercised (in dollars per share)	5.04
Forfeited (in dollars per share)	16.25
Outstanding, end of period (in dollars per share)	$ 9.37	$ 8.85
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding	$ 1,314	$ 1,864
Weighted Average Remaining Contractual Term
Weighted-average remaining contractual term, outstanding	1 year 1 month 20 days	1 year 2 months 8 days

SECURITIES

3 Months Ended

Dec. 31, 2023

SECURITIES

SECURITIES

3. SECURITIES

The following table summarizes the amortized cost, fair value and allowance for credit losses of securities available for sale and securities held to maturity at December 31, 2023 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss and gross unrecognized gains and losses:


	December 31, 2023
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	309	$	—	$	(108)	$	—	$	201
Collateralized loan obligations		50,283		82		(99)		—		50,266
Corporate bonds		12,700		—		(1,748)		—		10,952
Total available for sale securities	$	63,292	$	82	$	(1,955)	$	—	$	61,419

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,480	$	—	$	(96)	$	1,384	$	—
U.S. GSE commercial mortgage-backed securities		2,561		—		(110)		2,451		—
Total held to maturity securities	$	4,041	$	—	$	(206)	$	3,835	$	—

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 the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive 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

The amortized cost and fair value of investment securities at December 31, 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.


	December 31, 2023
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Five to ten years	$	16,524	$	14,709
Beyond ten years		46,459		46,509
U.S. GSE residential mortgage-backed securities		309		201
Total securities available for sale		63,292		61,419
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,480		1,384
U.S. GSE commercial mortgage-backed securities		2,561		2,451
Total securities held to maturity		4,041		3,835
Total investment securities	$	67,333	$	65,254

At December 31, 2023 and September 30, 2023, investment securities with a carrying amount of $2.0 million were pledged to secure public deposits and for other purposes required or permitted by law.

There were no sales of securities for the three months ended December 31, 2023 and 2022.

There were no holdings of securities of any one issuer in an amount greater than 10% of stockholders' equity at December 31, 2023 and September 30, 2023.

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 December 31, 2023. An allowance for credit losses has not been recorded for these investments at December 31, 2023.


	December 31, 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	$	—	$	—	$	201	$	(108)	5	$	201	$	(108)
Collateralized loan obligations		12,352		(99)		—		—	3		12,352		(99)
Corporate bonds		1,080		(120)		9,872		(1,628)	7		10,952		(1,748)
Total available-for-sale	$	13,432	$	(219)	$	10,073	$	(1,736)	15	$	23,505	$	(1,955)

	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	$	—	$	—	$	1,384	$	(96)	4	$	1,384	$	(96)
U.S. GSE commercial mortgage-backed securities		—		—		2,451		(110)	1		2,451		(110)
Total held-to-maturity	$	—	$	—	$	3,835	$	(206)	5	$	3,835	$	(206)

Assessment of Available for Sale Debt Securities for Credit Risk

Management assesses the decline in fair value of investment securities periodically. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. The following is a discussion of the credit quality characteristics of portfolio segments carrying unrealized losses at December 31, 2023.

Corporate bonds

The Company’s corporate bond portfolio is comprised of subordinated debt issues of community and regional banks. Management considers the credit quality of each individual investment. Management reviewed the collectibility of these investments, taking into account such factors as the financial condition of the issuers, reported regulatory capital ratios, and credit ratings, when available, and other factors. All corporate bond debt securities continue to accrue interest and make payments as expected with no defaults or deferrals on the part of the issuers. The Company considers the potential credit risk of the issuers to be immaterial and has not allocated an allowance for credit losses on its corporate bond portfolio as of December 31, 2023.

Obligations of U.S. Government agencies and sponsored entities

The mortgage-backed securities held by the Company were issued by U.S government-sponsored entities and agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality.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 consider these securities to carry zero loss estimates and no allowance for credit losses was recorded at December 31, 2023.

Collateralized loan obligations (“CLO”)

The Company’s CLO portfolio is comprised of an actively managed portfolio of senior secured Class A Notes. Management considers the credit quality of each individual investment. Management reviewed the collectibility of these investments, taking into account such factors as the financial condition of the issuers and credit ratings, when available and other factors. All CLO securities continue to accrue interest and make payments as expected with no defaults or deferrals on the part of the issuers. The Company considers the potential credit risk of the issuers to be immaterial and has not allocated an allowance for credit losses on its CLO portfolio as of December 31, 2023.

The following table summarizes 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.


	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)

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

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 3,763	$ 5,338
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	200	1,500
Depreciation and amortization	527	421
Amortization of right-of-use assets	439	392
Stock-based compensation	360	439
Net gain on sale of loans held-for-sale	(2,326)	(578)
Net accretion of premiums, discounts and loan fees and costs	100	(154)
Amortization of intangible assets	16	18
Amortization of debt issuance costs	14	13
Loan servicing rights valuation adjustments	348	87
Deferred tax expense (benefit)	276	(35)
Increase in accrued interest receivable	(1,279)	(984)
Increase in other assets	(1,325)	(1,083)
Decrease in accrued interest payable	(97)	(73)
Increase in other liabilities	3,538	1,127
Payments on operating leases	(440)	(353)
Net cash provided by operating activities	4,114	6,075
Cash flows from investing activities:
Purchases of securities available-for-sale	(50,499)
Redemptions (purchases) of restricted securities, net	1,935	(5,919)
Principal repayments of securities held to maturity	66	77
Principal repayments of securities available-for-sale	12	12
Proceeds from sales of loans	23,162	8,625
Net increase in loans	(111,676)	(131,310)
Purchases of premises and equipment	(356)	(845)
Net cash used in investing activities	(137,356)	(129,360)
Cash flows from financing activities:
Net increase (decrease) in deposits	169,619	(10,302)
Repayments of Federal Reserve Bank borrowings	(1,896)	(434)
(Repayments) proceeds of other short-term borrowings, net	(49,000)	137,000
Payments related to tax withholding for equity awards	(335)	(5)
Cash dividends paid	(731)	(729)
Proceeds from exercise of stock options	168	106
Net cash provided by financing activities	117,825	125,636
(Decrease) increase in cash and cash equivalents	(15,417)	2,351
Cash and cash equivalents, beginning of period	192,624	149,947
Cash and cash equivalents, end of period	177,207	152,298
Supplemental cash flow information:
Interest paid	18,593	7,381
Income taxes paid	160	51
Supplemental non-cash disclosure:
Transfers from portfolio loans to loans held-for-sale	$ 29,740	8,047
Preferred stock issued in exchange for common stock		2,963
Lease liabilities arising from obtaining right-of-use assets		$ 1,791

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	3 Months Ended
	Dec. 31, 2023
BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS
Change in Company's fiscal year end	In October 2023, the Company’s Board of Directors approved a change in the Company’s fiscal year end from September 30 to December 31. As a result of the change in fiscal year end, this document constitutes the Company’s Transition Report on Form 10-Q for the period October 1, 2023 through December 31, 2023. The Company’s next full fiscal year will be the calendar year January 1, 2024 through December 31, 2024 (fiscal year 2024).
Reclassifications	In the opinion of the Company’s management, the preceding unaudited interim consolidated financial statements contain all adjustments, consisting of normal accruals, necessary for a fair presentation of the Company’s consolidated statement of financial condition as of December 31, 2023, its consolidated statements of income for the three months ended Decmber 31, 2023 and 2022, its consolidated statements of comprehensive income for the three months ended December 31, 2023 and 2022, its consolidated statements of changes in stockholders’ equity for the three months ended December 31, 2023 and 2022 and its consolidated statements of cash flows for the three months ended December 31 2023 and 2022. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior period net income or stockholders’ equity.
Basis of Presentation	In addition, the preceding unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as well as in accordance with predominant practices within the banking industry. They do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. The results of operations for the three months ended December 31, 2023 are not necessarily indicative of results for any other interim period or of the results for the full fiscal year 2024. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. All material intercompany accounts and transactions have been eliminated in consolidation. Unless the context otherwise requires, references herein to the Company include the Company and the Bank on a consolidated basis.
Securities	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. A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.
Allowance for Credit Losses - Held-to-Maturity Securities	Alowance for Credit Losses – Held-to-Maturity Securities – Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $9 thousand at both December 31, 2023 and September 30, 2023 and is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management classifies the held-to-maturity portfolio into the following major security types: Mortgage backed: residential and commercial. All mortgage-backed: residential and commercial securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
Allowance for Credit Losses - Available-For-Sale Securities	Allowance for Credit Losses – Available-For-Sale Securities – For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities totaled $0.8 million at December 31, 2023 and is excluded from the estimate of credit losses.
Loans and Loan Interest Income Recognition	Loans and Loan Interest Income Recognition - Loans that the Company 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 credit losses. The loan portfolio is segmented into residential real estate, multi-family, commercial real estate, commercial and industrial, construction and land development, and consumer loans. Accrued interest receivable totaled $10.8 million at December 31, 2023 and was reported in Accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the estimate of credit losses. Interest income on loans is accrued on the unpaid principal balance and credited to income as earned. Interest income on loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent. Net loan origination fees and costs are deferred and accreted/amortized to interest income over the contractual life of loans using the level-yield method, adjusted for actual prepayments.
Loans Held for Sale	Loans Held for Sale – Mortgage and SBA and other government guaranteed loans originated and intended for sale in the secondary market are carried at estimated fair value as determined by outstanding commitments from investors. Periodically, the Company originates various residential mortgage loans for sale to investors generally on a servicing released basis. The sale of such loans is generally arranged through a master commitment on a best-efforts basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Premiums, discounts, origination fees and costs on loans held for sale are deferred and recognized as a component of the gain or loss on sale. Gains and losses on sales of loans held for sale are included in other income, recognized on settlement date and are determined to be the difference between the sale proceeds and the carrying value of the loans. These transactions are accounted for as sales based on satisfaction of the criteria for such accounting which provides that, as transferor, the Company has surrendered control of the loans. For liquidity purposes generally, there are instances when loans originated with the intent to hold in the portfolio are subsequently transferred to loans held for sale. At transfer, they are carried at the lower of cost or fair value.
Allowance for Credit Losses - Loans	Allowance for Credit Losses - Loans – The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that collection in full is not probable, expected credit losses are based on the fair value of the collateral or discounted value of the projected cash flows at the reporting date, adjusted for selling costs as appropriate. The quantitative component of the estimate relies on the statistical relationship between the projected value of an economic indicator and the implied historical loss experience among a curated group of peers. The Company utilized regression analyses of peer data, in which the Company was included, and where observed credit losses and selected economic factors were used to determine suitable loss drivers for modeling the lifetime rates of probability of default (PD). A loss given default rate (LGD) is assigned to each pool for each period based on these PD outcomes. The model primarily utilizes an expected discounted cash flow (DCF) analysis with a remaining life (RL) approach used limitedly. The DCF analysis is run at the instrument-level and incorporates an array of loan-specific data points and segment-implied assumptions to determine the lifetime expected loss attributable to each instrument. An implicit "hypothetical loss" is derived for each period of the DCF, and helps establish the present value of future cash flows for each period. The reserve applied to a specific instrument is the difference between the sum of the present value of future cash flows and the book balance of the loan at the measurement date. The RL approach utilizes projected loss rates based on the remaining life of a loan pool. It is utilized when a regression analysis could not provide adequate correlation of PD and external economic factors on which to base projected losses. Portfolio segments are the level at which loss assumptions are applied to a pool of loans based on the similarity of risk characteristics inherent in the included instruments, relying on FFIEC Call Report codes. The loss driver for each loan portfolio segment is derived from a readily available and reasonable economic forecast, chiefly the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. GDP growth. Forecasts are applied over a four-quarter period and revert to the lookback period's historical mean for the economic indicator over a four-quarter horizon, on a straight-line basis. The model incorporates qualitative factor adjustments in order to calibrate the model for risk in each portfolio segment that may not be captured through quantitative analysis. Determinations regarding qualitative adjustments are reflective of management's expectation of loss conditions differing from those already captured in the quantitative component of the model. Factors that the Company considers include a) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices; b) changes in international, national, regional, and local conditions; c) changes in the nature and volume of the portfolio and term loans; d) changes in experience, depth, and ability of lending management; e) changes in volume and severity of past due loans and other similar conditions; f) changes in the quality of the Bank’s loan review system; g) changes in the value of underlying collateral for collateral dependent loans; h) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and i) the effects of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses. Allowance for credit losses are aggregated for the major loan segments, with similar characteristics, summarized below. However, for the purposes of calculating reserves, these segments may be further broken down into loan classes by risk characteristics that include but not limited to FFIEC Call Report codes, industry type, geographic location, and collateral type. 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 Bank 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 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 or decline in property value. 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 Credit losses on Off-Balance Sheet Credit Exposures – The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is reported on the Consolidated Statements of Financial Condition in other liabilities section and is adjusted through a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated useful life.
Series A Preferred Stock	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.
Adoption of New Accounting Standards	Recent Accounting Pronouncements Adoption of New Accounting Standards 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 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 was eligible for and elected delayed adoption. The Company adopted the standard on October 1, 2023 using the modified retrospective method for all financial assets measured at amortized cost, and off-balance-sheet credit exposures. Results for the three months ended December 31, 2023 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recognized a one-time cumulative effect adjustment to retained earnings, of $4.0 million, or $3.2 million, net of tax effects, of which $0.1 million reflected a reduction of allowance for credit losses on unfunded commitments, $4.1 million reflected additional allowance related to the loan portfolio, and no adjustment was recognized related to the securities portfolio. 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 adopted ASU 2022-02 prospectively, beginning October 1, 2023, concurrently with the aforementioned ASU 2016-13. The Company did not have any loans that were both experiencing financial difficulties and modified during the three months ended December 31, 2023. 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 None.

LOANS - Categorized by class and internally assigned risk grades (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Loans Portfolio by Credit Risk Rating [Abstract]
Total	$ 1,957,199	$ 1,874,562
Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		1,842,519
Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		10,740
Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		21,303
Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Residential Real Estate
Loans Portfolio by Credit Risk Rating [Abstract]
Total		657,332
Residential Real Estate \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		648,012
Residential Real Estate \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		756
Residential Real Estate \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		8,564
Residential Real Estate \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Multi-family
Loans Portfolio by Credit Risk Rating [Abstract]
Total		578,895
Multi-family \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		576,443
Multi-family \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Multi-family \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		2,452
Multi-family \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Commercial real estate
Loans Portfolio by Credit Risk Rating [Abstract]
Total		537,314
Commercial real estate \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		518,508
Commercial real estate \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		9,444
Commercial real estate \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		9,362
Commercial real estate \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Commercial and industrial
Loans Portfolio by Credit Risk Rating [Abstract]
Total		87,575
Commercial and industrial \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		86,110
Commercial and industrial \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		540
Commercial and industrial \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		925
Commercial and industrial \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Construction and land development
Loans Portfolio by Credit Risk Rating [Abstract]
Total		13,021
Construction and land development \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		13,021
Construction and land development \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Construction and land development \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Construction and land development \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Consumer
Loans Portfolio by Credit Risk Rating [Abstract]
Total		425
Consumer \| Pass
Loans Portfolio by Credit Risk Rating [Abstract]
Total		425
Consumer \| Special Mention
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Consumer \| Substandard
Loans Portfolio by Credit Risk Rating [Abstract]
Total		0
Consumer \| Doubtful
Loans Portfolio by Credit Risk Rating [Abstract]
Total		$ 0

EQUITY COMPENSATION PLANS - Stock Option Plan (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
EQUITY COMPENSATION PLANS
Intrinsic value of options exercised	$ 414	$ 103
Cash received from option exercises	168	106
Tax benefit from option exercises	$ 145	$ 36

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock	Preferred Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Preferred Stock	Surplus Cumulative Effect, Period of Adoption, Adjusted Balance	Surplus	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance	Retained Earnings	Accumulated Other Comprehensive Loss, Net Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Other Comprehensive Loss, Net	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Total
Beginning Balance at Sep. 30, 2022		$ 73				$ 126,656			$ 46,475		$ (620)			$ 172,584
Beginning Balance (in shares) at Sep. 30, 2022		7,285,648
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income									5,338					5,338
Other comprehensive loss, net of tax											(95)			(95)
Cash dividends declared ($0.10 per share)									(739)					(739)
Stock-based compensation						439								439
Stock-based compensation (in shares)		3,000
Shares received related to tax withholding						(5)								(5)
Shares received related to tax withholding (in shares)		(262)
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 Dec. 31, 2022		$ 71		2,963		124,235			51,074		(715)			177,628
Ending Balance (in shares) at Dec. 31, 2022		7,149,000
Beginning Balance (Accounting Standards Update 2016-13) at Sep. 30, 2023	$ 72		$ 2,963		$ 125,501		$ (3,170)	$ 55,523		$ (1,322)		$ (3,170)	$ 182,737
Beginning Balance at Sep. 30, 2023		$ 72		2,963		125,501			58,693		(1,322)			185,907
Beginning Balance (in shares) (Accounting Standards Update 2016-13) at Sep. 30, 2023	7,170,419
Beginning Balance (in shares) at Sep. 30, 2023		7,170,419
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income									3,763					3,763
Other comprehensive loss, net of tax											(1,128)			(1,128)
Cash dividends declared ($0.10 per share)									(735)					(735)
Stock-based compensation						360								360
Stock awards granted, net of forfeitures (in shares)		10,432
Shares received related to tax withholding						(335)								(335)
Shares received related to tax withholding (in shares)		(19,239)
Exercise of stock options						168								168
Exercise of stock options (in shares)		33,400
Ending Balance (Accounting Standards Update 2016-13) at Dec. 31, 2023												$ 3,200
Ending Balance at Dec. 31, 2023		$ 72		$ 2,963		$ 125,694			$ 58,551		$ (2,450)			$ 184,830
Ending Balance (in shares) at Dec. 31, 2023		7,195,012

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) loan	Sep. 30, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accrued interest receivable on held-to-maturity debt securities	$ 9	$ 9
Accrued interest receivable on available-for-sale debt securities	800
Accrued interest receivable	10,800
Net of tax effect	184,830	185,907	$ 177,628	$ 172,584
Additional allowance related	19,658
Accounting Standards Update 2016-13 \| Cumulative Effect, Period of Adoption, Adjustment
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Adjustment to retained earnings	4,000
Net of tax effect	3,200	$ (3,170)
Reduction of allowance for credit losses	100
Additional allowance related	4,095
Adjustment was recognized related to the securities portfolio	$ 0
Number of loans experiencing financial difficulties and modifications \| loan	0

DERIVATIVES - Additional Information (Details) - Interest rate swap - USD ($) $ in Millions	Nov. 01, 2023	Dec. 31, 2023	Sep. 30, 2023
Cash flow hedge
DERIVATIVES
Notional amount		$ 75.0	$ 75.0
Fair value hedges
DERIVATIVES
Term of interest rate swaps	3 years
Notional amount	$ 50.0
Fixed rate of interest	4.56%

BORROWINGS - Federal Reserve Borrowings and Correspondent Bank Borrowings (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Borrowings
Borrowings	$ 128,953	$ 179,849
Unsecured Debt
Borrowings
Line of credit available for borrowing	92,000
Borrowings outstanding	0
PPPLF
Borrowings
Borrowings	$ 2,300	$ 4,100
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

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Loss) Income

3 Months Ended

Dec. 31, 2023

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME [Abstract]

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

11. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table presents changes in accumulated other comprehensive (loss) income by component, net of tax, for the three months ended December 31, 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, 2023	$	(1,670)	$	348	$	(1,322)
Other comprehensive income (loss), before reclassification		204		(1,332)		(1,128)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive income (loss)		204		(1,332)		(1,128)
Balance at December 31, 2023	$	(1,466)	$	(984)	$	(2,450)



	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, before reclassification		(95)		—		(95)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive loss		(95)		—		(95)
Balance at December 31, 2022	$	(715)	$	—	$	(715)

There were no significant amounts reclassified out of accumulated other comprehensive (loss) income for the three months ended December 31, 2023 and 2022.

BORROWINGS - FHLB Advances Contractual Maturities and Weighted Average Interest Rates (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023
FHLB Contractual Maturity, Amount
2024, rates from 0.39% to 2.53%	$ 18,860,000	$ 18,860,000
2025, rates from 0.56% to 0.59%	7,080,000	7,080,000
2026, rates from 4.29% to 4.98%	40,475,000	40,475,000
2027, rates from 4.13% to 4.74%	40,250,000	40,250,000
2028, rates from 3.99% to 4.58%	20,000,000	20,000,000
Total term advances	126,665,000	126,665,000
Total FHLB advances	126,665,000	175,665,000
FHLB overnight
FHLB Contractual Maturity, Amount
Overnight		$ 49,000,000
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate		5.59%
Overnight borrowings
FHLB Contractual Maturity, Amount
Overnight	$ 0
Minimum
FHLB Contractual Maturity, Weighted Average Rate
2024, rates from 0.39% to 2.53%	0.39%	0.39%
2025, rates from 0.56% to 0.59%	0.56%	0.56%
2026, rates from 4.29% to 4.98%	4.29%	4.29%
2027, rates from 4.13% to 4.74%	4.13%	4.13%
2028, rates from 3.99% to 4.58%	3.99%	3.99%
Maximum
FHLB Contractual Maturity, Amount
2027, rates from 4.13% to 4.74%		$ 4.74
FHLB Contractual Maturity, Weighted Average Rate
2024, rates from 0.39% to 2.53%	2.53%	2.53%
2025, rates from 0.56% to 0.59%	0.59%	0.59%
2026, rates from 4.29% to 4.98%	4.98%	4.98%
2027, rates from 4.13% to 4.74%	4.74%
2028, rates from 3.99% to 4.58%	4.58%	4.58%
Weighted Average
FHLB Contractual Maturity, Weighted Average Rate
2024, rates from 0.39% to 2.53%	0.98%	0.98%
2025, rates from 0.56% to 0.59%	0.58%	0.58%
2026, rates from 4.29% to 4.98%	4.50%	4.50%
2027, rates from 4.13% to 4.74%	4.32%	4.32%
2028, rates from 3.99% to 4.58%	4.18%	4.18%
Total term advances, Weighted average rate	3.65%	3.65%
Total FHLB advances, Weighted Average Rate	3.65%	4.19%
Weighted Average \| FHLB overnight
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate		5.59%

LOANS - Allowance and the recorded investment in loans by portfolio segment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Allowance for credit losses / loan losses:
Individually evaluated for impairment	$ 421	$ 0
Collectively evaluated for impairment	19,237	14,686
Purchased-credit impaired		0
Total allowance for loan losses		14,686	$ 14,404	$ 12,844
Total allowance for loan losses	19,658
Loans:
Individually evaluated for impairment	13,947	16,660
Collectively evaluated for impairment	1,943,252	1,857,774
Purchased-credit impaired		128
Total loans	1,957,199	1,874,562
Total loans	1,957,199
Residential Real Estate
Allowance for credit losses / loan losses:
Individually evaluated for impairment		0
Collectively evaluated for impairment	5,001	4,778
Purchased-credit impaired		0
Total allowance for loan losses		4,778	4,508	3,951
Total allowance for loan losses	5,001
Loans:
Individually evaluated for impairment	4,226	7,477
Collectively evaluated for impairment	710,617	649,855
Purchased-credit impaired		0
Total loans		657,332
Total loans	714,843
Multi-family
Allowance for credit losses / loan losses:
Individually evaluated for impairment	397	0
Collectively evaluated for impairment	4,274	4,206
Purchased-credit impaired		0
Total allowance for loan losses		4,206	5,697	4,308
Total allowance for loan losses	4,671
Loans:
Individually evaluated for impairment	3,356	2,452
Collectively evaluated for impairment	569,493	576,443
Purchased-credit impaired		0
Total loans		578,895
Total loans	572,849
Commercial real estate
Allowance for credit losses / loan losses:
Individually evaluated for impairment	24	0
Collectively evaluated for impairment	8,366	3,197
Purchased-credit impaired		0
Total allowance for loan losses		3,197	3,234	3,707
Total allowance for loan losses	8,390
Loans:
Individually evaluated for impairment	5,986	6,119
Collectively evaluated for impairment	542,026	531,195
Purchased-credit impaired		0
Total loans		537,314
Total loans	548,012
Commercial and industrial
Allowance for credit losses / loan losses:
Individually evaluated for impairment		0
Collectively evaluated for impairment	1,419	2,368
Purchased-credit impaired		0
Total allowance for loan losses		2,368	852	761
Total allowance for loan losses	1,419
Loans:
Individually evaluated for impairment	379	612
Collectively evaluated for impairment	107,533	86,835
Purchased-credit impaired		128
Total loans		87,575
Total loans	107,912
Construction and land development
Allowance for credit losses / loan losses:
Individually evaluated for impairment		0
Collectively evaluated for impairment	122	104
Purchased-credit impaired		0
Total allowance for loan losses		104	104	115
Total allowance for loan losses	122
Loans:
Individually evaluated for impairment		0
Collectively evaluated for impairment	13,170	13,021
Purchased-credit impaired		0
Total loans		13,021
Total loans	13,170
Consumer
Allowance for credit losses / loan losses:
Individually evaluated for impairment		0
Collectively evaluated for impairment	55	33
Purchased-credit impaired		0
Total allowance for loan losses		33	$ 9	$ 2
Total allowance for loan losses	55
Loans:
Individually evaluated for impairment		0
Collectively evaluated for impairment	413	425
Purchased-credit impaired		0
Total loans		$ 425
Total loans	$ 413

DERIVATIVES - Gains (losses) in accumulated other comprehensive income and the consolidated statements, cash flow derivative instruments (Details) - Cash flow hedge - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Derivative [Line Items]
Loss recognized in other comprehensive income	$ (1,332,000)
Gain (loss) recognized in interest expense	$ 187,000
Interest rate swap
Derivative [Line Items]
Cash flow hedges		$ 0

LOANS - Loans by loan portfolio segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
After to adoption of ASC 326
Total loans	$ 1,957,199
Allowance for credit losses	(19,658)
Total loans, net	1,937,541
Prior to adoption of ASC 326
Total loans	1,957,199		$ 1,874,562
Allowance for loan losses		$ (14,404)	(14,686)	$ (12,844)
Total loans, net			1,859,876
Servicing of loans to others	262,800		255,700
Amount from sale of loans	29,700	8,000
Net gain on sale of loans held-for-sale	2,326	578
PPP Loans
Prior to adoption of ASC 326
Loans sold and settled	8,900
Residential real estate
After to adoption of ASC 326
Total loans	714,843
Allowance for credit losses	(5,001)
Prior to adoption of ASC 326
Total loans			657,332
Allowance for loan losses		(4,508)	(4,778)	(3,951)
Multi-family
After to adoption of ASC 326
Total loans	572,849
Allowance for credit losses	(4,671)
Prior to adoption of ASC 326
Total loans			578,895
Allowance for loan losses		(5,697)	(4,206)	(4,308)
Commercial real estate and C&I loans \| PPP Loans
Prior to adoption of ASC 326
Loans sold and settled			1,000	4,900
Commercial real estate
After to adoption of ASC 326
Total loans	548,012
Allowance for credit losses	(8,390)
Prior to adoption of ASC 326
Total loans			537,314
Allowance for loan losses		(3,234)	(3,197)	(3,707)
Commercial and industrial
After to adoption of ASC 326
Total loans	107,912
Allowance for credit losses	(1,419)
Prior to adoption of ASC 326
Total loans			87,575
Allowance for loan losses		(852)	(2,368)	(761)
Commercial and industrial \| PPP Loans
After to adoption of ASC 326
Total loans	2,900
Prior to adoption of ASC 326
Total loans			4,800
Construction and land development
After to adoption of ASC 326
Total loans	13,170
Allowance for credit losses	(122)
Prior to adoption of ASC 326
Total loans			13,021
Allowance for loan losses		(104)	(104)	(115)
Consumer
After to adoption of ASC 326
Total loans	413
Allowance for credit losses	$ (55)
Prior to adoption of ASC 326
Total loans			425
Allowance for loan losses		$ (9)	$ (33)	$ (2)

FAIR VALUE - Assets Measured at Fair Value on Non-recurring Basis (Details) $ in Thousands	Dec. 31, 2023 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Measurement input	397
Nonrecurring \| Multi-family \| Individually evaluated loans \| Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 1,180
Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Multi-family \| Individually evaluated loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	1,180
Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Multi-family \| Individually evaluated loans \| Fair Value Measurements
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets measured at fair value	$ 1,180

SECURITIES - Securities Portfolio Presented by Contractual Maturity (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Securities Available for Sale, Amortized Cost [Abstract]
Five to ten years	$ 16,524
Beyond ten years	46,459
Amortized Cost	63,292
Securities Available for Sale, Fair Value [Abstract]
Five to ten years	14,709
Beyond ten years	46,509
Fair value	61,419
Securities Held to Maturity, Amortized Cost [Abstract]
Amortized Cost	4,041
Securities Held to Maturity, Fair Value [Abstract]
Fair value	3,835		$ 3,760
Debt Securities, Available-for-Sale and Held-to-Maturity, after Allowance for Credit Loss [Abstract]
Amortized cost	67,333
Fair value	65,254
Proceeds from sales	0	$ 0
U.S. GSE residential mortgage-backed securities
Securities Available for Sale, Amortized Cost [Abstract]
Without single maturity date	309
Amortized Cost	309
Securities Available for Sale, Fair Value [Abstract]
Without single maturity date	201
Fair value	201
Securities Held to Maturity, Amortized Cost [Abstract]
Without single maturity date	1,480
Securities Held to Maturity, Fair Value [Abstract]
Without single maturity date	1,384
Fair value	1,384		1,353
U.S. GSE commercial mortgage-backed securities
Securities Held to Maturity, Amortized Cost [Abstract]
Without single maturity date	2,561
Securities Held to Maturity, Fair Value [Abstract]
Without single maturity date	2,451
Fair value	$ 2,451		$ 2,407

EQUITY COMPENSATION PLANS - 2021 and 2018 Equity Compensation Plans (Details)	Dec. 31, 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)	11,352