Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 15, 2018 | Mar. 31, 2018 | |
Entity Registrant Name | Magyar Bancorp, Inc. | ||
Entity Central Index Key | 1,337,068 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 33,400 | ||
Entity Common Stock, Shares Outstanding | 5,820,746 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,018 | ||
Magyar Bancorp, MHC [Member] | |||
Entity Common Stock, Shares Owned by Registrant's mutual holding company | 3,200,450 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Assets | ||
Cash | $ 674 | $ 871 |
Interest earning deposits with banks | 14,694 | 21,463 |
Total cash and cash equivalents | 15,368 | 22,334 |
Investment securities - available for sale, at fair value | 22,469 | 11,815 |
Investment securities - held to maturity, at amortized cost (fair value of $32,151 and $51,241 at September 30, 2018 and 2017, respectively) | 33,645 | 51,368 |
Federal Home Loan Bank of New York stock, at cost | 2,164 | 2,002 |
Loans receivable, net of allowance for loan losses of $4,200 and $3,475 at September 30, 2018 and 2017, respectively | 508,430 | 470,693 |
Bank owned life insurance | 11,843 | 11,550 |
Accrued interest receivable | 2,181 | 1,929 |
Premises and equipment, net | 16,990 | 17,567 |
Other real estate owned ("OREO") | 8,586 | 11,056 |
Other assets | 2,292 | 2,730 |
Total assets | 623,968 | 603,044 |
Liabilities | ||
Deposits | 530,137 | 515,201 |
Escrowed funds | 2,285 | 1,937 |
Federal Home Loan Bank of New York advances | 35,524 | 31,905 |
Accrued interest payable | 193 | 105 |
Accounts payable and other liabilities | 4,467 | 4,439 |
Total liabilities | 572,606 | 553,587 |
Stockholders' equity | ||
Preferred stock: $.01 Par Value, 1,000,000 shares authorized; none issued | ||
Common stock: $.01 Par Value, 8,000,000 shares authorized; 5,923,742 issued; 5,820,746 shares outstanding at September 30, 2018 and 2017 | 59 | 59 |
Additional paid-in capital | 26,310 | 26,289 |
Treasury stock: 102,996 shares at September 30, 2018 and 2017, at cost | (1,152) | (1,152) |
Unearned Employee Stock Ownership Plan shares | (356) | (492) |
Retained earnings | 27,975 | 25,757 |
Accumulated other comprehensive loss | (1,474) | (1,004) |
Total stockholders' equity | 51,362 | 49,457 |
Total liabilities and stockholders' equity | $ 623,968 | $ 603,044 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Statement of Financial Position [Abstract] | ||
Fair value of investment securities - held to maturity | $ 32,151 | $ 51,241 |
Allowance for loan losses | $ 4,200 | $ 3,475 |
Preferred stock; par value | $ 0.01 | $ 0.01 |
Preferred stock; shares authorized | 1,000,000 | 1,000,000 |
Preferred stock; shares issued | 0 | 0 |
Common stock; par value | $ 0.01 | $ 0.01 |
Common stock; shares authorized | 8,000,000 | 8,000,000 |
Common stock; shares issued | 5,923,742 | 5,923,742 |
Common stock, shares outstanding | 5,820,746 | 5,820,746 |
Treasury stock, shares | 102,996 | 102,996 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Interest and dividend income | ||
Loans, including fees | $ 22,604 | $ 20,297 |
Investment securities | ||
Taxable | 1,612 | 1,562 |
Federal Home Loan Bank of New York stock | 134 | 119 |
Total interest and dividend income | 24,350 | 21,978 |
Interest expense | ||
Deposits | 3,896 | 3,053 |
Borrowings | 753 | 720 |
Total interest expense | 4,649 | 3,773 |
Net interest and dividend income | 19,701 | 18,205 |
Provision for loan losses | 997 | 1,343 |
Net interest and dividend income after provision for loan losses | 18,704 | 16,862 |
Other income | ||
Service charges | 1,097 | 1,256 |
Income on bank owned life insurance | 293 | 293 |
Other operating income | 131 | 126 |
Gains on sales of loans | 493 | 324 |
Gains on sales of investment securities | 107 | |
Total other income | 2,121 | 1,999 |
Other expenses | ||
Compensation and employee benefits | 9,687 | 9,084 |
Occupancy expenses | 2,941 | 2,803 |
Professional fees | 1,026 | 1,018 |
Data processing expenses | 581 | 513 |
OREO expenses | 540 | 592 |
FDIC deposit insurance premiums | 426 | 498 |
Loan servicing expenses | 322 | 269 |
Insurance expense | 206 | 233 |
Other expenses | 1,595 | 1,434 |
Total other expenses | 17,324 | 16,444 |
Income before income tax expense | 3,501 | 2,417 |
Income tax expense | 1,471 | 994 |
Net income | $ 2,030 | $ 1,423 |
Net income per share-basic and diluted | $ 0.35 | $ 0.24 |
Weighted average basic and diluted shares outstanding | 5,820,746 | 5,820,746 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 2,030 | $ 1,423 |
Other comprehensive (loss) income | ||
Unrealized (loss) income on securities available for sale | (586) | (218) |
Less reclassification adjustments for: | ||
Net unrealized gains on securities reclassified available for sale | 104 | |
Net gains realized on securities available for sale | (107) | |
Defined benefit pension plan | 202 | 490 |
Other comprehensive (loss) income, before tax | (387) | 272 |
Deferred income tax effect | 105 | (117) |
Total other comprehensive (loss) income | (282) | 155 |
Total comprehensive income | $ 1,748 | $ 1,578 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Treasury Stock [Member] | Unearned ESOP Shares [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total | |
Balance, at Sep. 30, 2016 | $ 59 | $ 26,270 | $ (1,152) | $ (627) | $ 24,334 | $ (1,159) | $ 47,725 | |
Balance, shares at Sep. 30, 2016 | 5,820,746 | 5,820,746 | ||||||
Net income | 1,423 | $ 1,423 | ||||||
Other comprehensive income loss | 155 | 155 | ||||||
Reclassification of the stranded tax effect related to deferred taxes for: | ||||||||
Defined benefit pension plan | 190 | |||||||
ESOP shares allocated | 19 | 135 | 154 | |||||
Balance, at Sep. 30, 2017 | $ 59 | 26,289 | (1,152) | (492) | 25,757 | (1,004) | $ 49,457 | |
Balance, shares at Sep. 30, 2017 | 5,820,746 | 5,820,746 | ||||||
Net income | 2,030 | $ 2,030 | ||||||
Other comprehensive income loss | (282) | (282) | ||||||
Reclassification of the stranded tax effect related to deferred taxes for: | ||||||||
Defined benefit pension plan | [1] | 177 | (177) | 189 | ||||
Securities available-for-sale | [1] | 11 | (11) | |||||
ESOP shares allocated | 21 | 136 | 157 | |||||
Balance, at Sep. 30, 2018 | $ 59 | $ 26,310 | $ (1,152) | $ (356) | $ 27,975 | $ (1,474) | $ 51,362 | |
Balance, shares at Sep. 30, 2018 | 5,820,746 | 5,820,746 | ||||||
[1] | In January 2018, the Company adopted ASU 2018-02, as a result, the Company made a policy election to release income tax effects, as a result of the Tax Act, from AOCI to retained earnings. |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 2,030 | $ 1,423 |
Adjustment to reconcile net income to net cash provided by operating activities | ||
Depreciation expense | 861 | 816 |
Premium amortization on investment securities, net | 134 | 187 |
Provision for loan losses | 997 | 1,343 |
Provision for loss on other real estate owned | 418 | 218 |
Originations of loans held for sale | (8,167) | (4,382) |
Proceeds from the sales of loans receivable | 8,660 | 4,706 |
Gains on sale of loans receivable | (493) | (324) |
Gains on sales of investment securities | (107) | |
(Gains) losses on the sales of other real estate owned | (184) | 80 |
ESOP compensation expense | 157 | 154 |
Deferred income tax expense | 710 | 997 |
Increase in accrued interest receivable | (252) | (219) |
Increase in surrender value bank owned life insurance | (293) | (293) |
(Increase) decrease in other assets | (167) | 155 |
Increase (decrease) in accrued interest payable | 88 | (10) |
Increase (decrease) in accounts payable and other liabilities | 230 | (1,250) |
Net cash provided by operating activities | 4,622 | 3,601 |
Investing activities | ||
Net increase in loans receivable | (37,233) | (5,540) |
Purchases of loans receivable | (5,562) | (12,626) |
Proceeds from the sale of loans receivable | 3,738 | |
Purchases of investment securities held to maturity | (3,492) | (5,484) |
Purchases of investment securities available for sale | (1,443) | (7,931) |
Sales of investment securities held to maturity | 3,408 | |
Principal repayments on investment securities held to maturity | 5,223 | 6,896 |
Principal repayments on investment securities available for sale | 2,757 | 1,099 |
Purchases of premises and equipment | (284) | (299) |
Investment in other real estate owned | (191) | (58) |
Proceeds from other real estate owned | 2,750 | 1,948 |
(Purchases) redemptions of Federal Home Loan Bank stock | (162) | 237 |
Net cash used by investing activities | (30,491) | (21,758) |
Financing activities | ||
Net increase in deposits | 14,936 | 22,551 |
Net increase in escrowed funds | 348 | 269 |
Proceeds from long-term advances | 8,719 | 865 |
Repayments of long-term advances | (5,100) | (5,000) |
Net cash provided by financing activities | 18,903 | 18,685 |
Net (decrease) increase in cash and cash equivalents | (6,966) | 528 |
Cash and cash equivalents, beginning of period | 22,334 | 21,806 |
Cash and cash equivalents, end of period | 15,368 | 22,334 |
Cash paid for | ||
Interest | 4,561 | 3,782 |
Income taxes | 1,066 | 36 |
Non-cash investing activities | ||
Real estate acquired in full satisfaction of loans in foreclosure | 1,161 | |
Investment securities transferred from held to maturity to available for sale | $ 12,619 |
ORGANIZATION
ORGANIZATION | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | NOTE A - ORGANIZATION On January 23, 2006, Magyar Bank (the “Bank”) completed a reorganization involving a series of transactions by which Bank’s corporate structure was changed from a mutual savings bank to the mutual holding company form of ownership. Magyar Bank became a New Jersey-chartered stock savings bank subsidiary of Magyar Bancorp, Inc., a Delaware-chartered mid-tier stock holding company. Magyar Bancorp, Inc. (the “Company”) owns 100% of the outstanding shares of common stock of Magyar Bank. Magyar Bancorp, Inc. is a majority-owned subsidiary of Magyar Bancorp, MHC, a New Jersey-chartered mutual holding company. Magyar Bancorp, MHC, owns 54.0%, or 3,200,450, of the issued shares of common stock of Magyar Bancorp, Inc. Of the remaining shares, 2,620,296, or 44.2%, are held by public stockholders and 102,996, or 1.8%, are held by Magyar Bancorp, Inc. in treasury stock. So long as Magyar Bancorp, MHC exists, it will be required to own a majority of the voting stock of Magyar Bancorp, Inc. Magyar Bancorp, Inc. and Magyar Bancorp, MHC are subject to comprehensive regulation and examination by the Board of Governors of the Federal Reserve System and the New Jersey Department of Banking and Insurance. The Bank is subject to regulations issued by the New Jersey Department of Banking and Insurance and the Federal Deposit Insurance Corporation (the “FDIC”). The Bank’s administrative office is located in New Brunswick, New Jersey. The Bank has seven branch offices which are located in New Brunswick, North Brunswick, South Brunswick, Branchburg, Bridgewater, and Edison, New Jersey, and a loan product office located in Keyport, New Jersey. The Bank’s savings deposits are insured by the FDIC through the Deposit Insurance Fund (DIF); also, the Bank is a member of the Federal Home Loan Bank of New York. MagBank Investment Company, a New Jersey investment corporation subsidiary of the Bank, was formed on August 15, 2006 for the purpose of buying, selling and holding investment securities. Hungaria Urban Renewal, LLC is a Delaware limited-liability corporation established in 2002 as a qualified intermediary operating for the purpose of acquiring and developing the Bank’s new main office. The Bank owns a 100% interest in Hungaria Urban Renewal, LLC, which has no other business other than owning the Bank’s main office site. Magyar Service Corporation, a New Jersey corporation, is a wholly owned, non-bank subsidiary of the Bank. Magyar Service Corporation, which also operates under the name Magyar Financial Services, receives commissions from annuity and life insurance sales referred to a licensed, non-bank financial planner. The Bank competes with other banking and financial institutions in its primary market areas. Commercial banks, savings banks, savings and loan associations, credit unions and money market funds actively compete for savings and time certificates of deposit and all types of loans. Such institutions, as well as consumer financial and insurance companies, may be considered competitors of the Bank with respect to one or more of the services it renders. The Bank is subject to regulations of certain state and federal agencies and, accordingly, the Bank is periodically examined by such regulatory authorities. As a consequence of the regulation of commercial banking activities, the Bank’s business is particularly susceptible to future state and federal legislation and regulations. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Financial Statement Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (US GAAP) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank, and its wholly-owned subsidiaries MagBank Investment Company, Magyar Service Corporation, and Hungaria Urban Renewal, LLC. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The Company has evaluated subsequent events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2018, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were available to be issued. In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses and the deferred tax asset. The evaluation of the adequacy of the allowance for loan losses includes an analysis of the individual loans and overall risk characteristics and size of the different loan portfolios, and takes into consideration current economic and market conditions, the capability of specific borrowers to pay specific loan obligations, as well as current loan collateral values. However, actual losses on specific loans, which also are encompassed in the analysis, may vary from estimated losses. The Company records income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment. The valuation allowance is adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant. 2. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, time deposits with original maturities less than three months and overnight deposits. 3. Investment Securities The Company classifies its investment securities into one of three portfolios: held to maturity, available for sale or trading. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt securities not classified as either trading securities or as held to maturity securities are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of deferred income taxes, reported in the accumulated other comprehensive income (“AOCI”) component of stockholders’ equity. Equity securities, with certain exceptions, are measured at fair value with changes in fair value recognized in net income. If the fair value of a security is less than its amortized cost, the security is deemed to be impaired. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance. The Company accounts for temporary impairments based upon security classification as either available for sale, held to maturity or trading. Temporary impairments on “available for sale” securities are recognized, on a tax-effected basis, through AOCI with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes. Conversely, the Company does not adjust the carrying value of “held to maturity” securities for temporary impairments, although information concerning the amount and duration of impairments on held to maturity securities is generally disclosed in periodic consolidated financial statements. The carrying value of securities held in a trading portfolio is adjusted to their fair value through earnings on a daily basis. However, the Company maintained no securities in trading portfolios at or during the periods presented in these consolidated financial statements. The Company accounts for other-than-temporary impairments based upon several considerations. First, other-than-temporary impairments on securities that the Company has decided to sell as of the close of a fiscal period, or will, more likely than not, be required to sell prior to the full recovery of the their fair value to a level equal to or exceeding their amortized cost, are recognized in operations. If neither of these criteria apply, then the other-than-temporary impairment is separated into credit-related and noncredit-related components. The credit-related impairment generally represents the amount by which the present value of the cash flows that are expected to be collected on an other-than-temporarily impaired security fall below its amortized cost while the noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. The Company recognizes credit-related, other-than-temporary impairments in earnings, while noncredit-related, other-than-temporary impairments on debt securities are recognized, net of deferred taxes, in AOCI. Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to purchase and hold restricted stock of its district FHLB according to a predetermined formula. This stock is restricted in that it may only be sold to the FHLB and all sales must be at par. Accordingly, the FHLB restricted stock is carried at cost, less any applicable impairment charges. Premiums and discounts on all securities are amortized or accreted to maturity by use of the level-yield method considering the impact of principal amortization and prepayments on mortgage-backed securities. Gain or loss on sales of securities is recognized on the specific identification method. 4. Loans and Allowance for Loan Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, adjusted for net deferred loan fees and costs, and reduced by an allowance for loan losses. Interest on loans is accrued and credited to operations based upon the principal amounts outstanding. The allowance for loan losses is established through a provision for possible loan losses charged to operations. Loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely. Income recognition of interest is discontinued when, in the opinion of management, the collectability of such interest becomes doubtful. A loan is generally classified as non-accrual when the scheduled payment(s) due on the loan is delinquent for more than three months. Loan origination fees and certain direct origination costs are deferred and amortized over the life of the related loans as an adjustment to the yield on loans receivable using the effective interest method. Management uses a ten point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than three months past due are considered Substandard. Any portion of a loan that has been charged off is placed in the Loss category. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Bank’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. The Asset Review Committee performs monthly reviews of all commercial relationships internally rated 6 (“Watch”) or worse. Confirmation of the appropriate risk grade is performed by an external loan review company that semi-annually reviews and assesses loans within the portfolio. Generally, the external consultant reviews commercial relationships greater than $500,000 and/or criticized relationships greater than $250,000. Detailed reviews, including plans for resolution, are performed on loans classified as Substandard on a monthly basis. The allowance for loan losses is maintained at an amount management deems adequate to cover estimated losses. In determining the level to be maintained, management evaluates many factors, including current economic trends, industry experience, historical loss experience, industry loan concentrations, the borrowers’ ability to repay and repayment performance, and estimated collateral values. In the opinion of management, the present allowance is adequate to absorb reasonable, foreseeable loan losses. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary based on changes in economic conditions or any of the other factors used in management’s determination. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for losses on loans. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Charge-offs to the allowance are made when the loan is transferred to other real estate owned or other determination of a confirmed loss. Recoveries on loans previously charged off are also recorded through the allowance. A loan is considered impaired when, based upon current information and events, it is probable that a creditor will be unable to collect all amounts due including principal and interest, according to the contractual terms of the loan agreement. The Company measures impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate or as a practical expedient, at the loan’s current observable market price, or the fair value of the collateral if the loan is collateral dependent. The amount by which the recorded investment of an impaired loan exceeds the measurement value is recognized by creating a valuation allowance through a charge to the provision for loan losses. Impairment criteria generally do not apply to those smaller-balance homogeneous loans that are collectively evaluated for impairment which, for the Company, includes one- to four-family first mortgage loans and consumer loans, other than those modified in a troubled debt restructuring. The Company records cash receipts on impaired loans that are non-performing as a reduction to principal before applying amounts to interest or late charges unless specifically directed by the Bankruptcy Court to apply payments otherwise. The Company may continue to recognize interest income on impaired loans where there is no confirmed loss. 5. Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation, and include capitalized expenditures for new facilities, major betterments and renewals. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method based upon the estimated useful lives of the related assets for financial reporting purposes and using the mandated methods by asset type for income tax purposes. Leasehold improvements are depreciated using the straight-line method based upon the initial term of the lease. The Company accounts for the impairment of long-lived assets in accordance with US GAAP, which requires recognition and measurement for the impairment of long-lived assets to be held and used or to be disposed of by sale. The Company had no impaired long-lived assets at September 30, 2018 and 2017. 6. Revenue recognition The Company recognizes revenue in the consolidated statements of income as it is earned and when collectability is reasonably assured. The primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts, or other similar contracts. Non-interest income is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income includes earnings on bank-owned life insurance, deposit accounts, merchant services, ATM and debit card fees, mortgage banking activities, and other miscellaneous services and transactions. 7. Other Real Estate Owned Real estate acquired through foreclosure, or a deed-in-lieu of foreclosure, is recorded at fair value less estimated selling costs at the date of acquisition or transfer, and subsequently at the lower of its net cost or fair value less estimated selling costs. Adjustments to the carrying value at the date of acquisition or transfer are charged to the allowance for loan losses. The carrying value of the individual properties is subsequently adjusted to the extent it exceeds estimated fair value less estimated selling costs, at which time a provision for losses on such real estate is charged to operations. Operating expenses of holding real estate, net of related income, are charged against income as incurred. Gains on sales of real estate are recognized, normally at closing, when down payment and certain other requirements are met; otherwise such gains are deferred and recognized on the installment method of accounting. Losses on the disposition of real estate, including expenses incurred in connection with the disposition, are charged to operations. 8. Pension and Postretirement Plans The Company sponsors qualified defined benefit pension plan and supplemental executive retirement plan (SERP). The qualified defined benefit pension plan is funded with trust assets invested in a diversified portfolio of debt and equity securities. Accounting for pensions and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. This involves extensive use of assumptions about inflation, investment returns, mortality, turnover, and discount rates. Among other factors, changes in interest rates, investment returns and the market value of plan assets can (i) affect the level of plan funding; (ii) cause volatility in the net periodic pension cost; and (iii) increase our future contribution requirements. A significant decrease in investment returns or the market value of plan assets or a significant decrease in interest rates could increase our net periodic pension costs and adversely affect our results of operations. A significant increase in our contribution requirements with respect to our qualified defined benefit pension plan could have an adverse impact on our cash flow. Changes in the key actuarial assumptions would impact net periodic benefit expense and the projected benefit obligation for our defined benefit and other postretirement benefit plan. See Note M, “Pension Plan,” and Note N, “Non-Qualified Compensation Plan” for information on these plans and the assumptions used. 9. Income Taxes The Company and its subsidiaries file consolidated federal and individual state income tax returns. Income taxes are allocated based on the contribution of their respective income or loss to the consolidated income tax return. The Company records income taxes on the basis of reported income using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. To the extent that current available evidence about the future raises doubt about the realization of a deferred tax asset, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company follows the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 740, which provides clarification on accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recorded additional tax expense for the year ended September 30, 2018 due to higher income from operations and the write-down of its net deferred tax asset due to the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which lowered the Company’s federal income tax rate from 34% to 21%. The Company recognized additional tax expense in its tax provision for the year ended September 30, 2018 related to adjustment of our net deferred tax asset to reflect the new corporate tax rate. See Note L, “Income Taxes” for information on the Company’s income tax expense and deferred tax asset for the years ended September 30, 2018 and 2017. At September 30, 2018 and 2017, no significant income tax uncertainties have been included in the Company’s Consolidated Balance Sheets. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. No interest and penalties were recorded during the years ended September 30, 2018 and 2017. The tax years subject to examination by the taxing authorities are the years ended September 30, 2013 and forward. 10. Advertising Costs The Company expenses advertising costs as incurred. 11. Earnings Per Share Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. The weighted average common shares outstanding include shares held by the Magyar Bancorp, MHC and shares allocated to the Employee Stock Ownership Plan. Diluted income per share is calculated by adjusting the weighted average common shares outstanding to reflect the potential dilution that could occur using the treasury stock method if securities or other contracts to issue common stock, such as stock options and unvested restricted stock, were exercised and converted into common stock. The resulting shares issued would share in the earnings of the Company. Shares issued and shares reacquired during the period are weighted for the portion of the period that they were outstanding. In periods of loss, dilution is not calculated and diluted loss per share is equal to basic loss per share. The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted earnings per share (EPS) calculations. All stock options were anti-dilutive at September 30, 2018 and 2017. For the Years Ended September 30, 2018 2017 Weighted Per Weighted Per average share average share Income shares Amount Income shares Amount (In thousands, except share and per share data) Basic EPS Net income available to common shareholders $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 Effect of dilutive securities Options and grants — — — — — — Diluted EPS Net income available to common shareholders plus assumed conversion $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 12. Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) includes net income as well as certain other items which result in a change to equity during the period. The other items allocated to comprehensive income (loss), as well as the related income tax effects, for the years ended September 30, 2018 and 2017 were as follows: September 30, 2018 2017 Tax Net of Tax Net of Before Tax (Benefit) Tax Before Tax (Benefit) Tax Amount Expense Amount Amount Expense Amount (In thousands) Unrealized holding (losses) gains arising during period on: Available-for-sale investments $ (586 ) $ 161 $ (425 ) $ (218 ) $ 79 $ (139 ) Less reclassification adjustment for: Net unrealized gains on securities reclassified available-for-sale 104 (32 ) 72 — — — Net gains realized on securities available-for-sale (a) (b) (107 ) 33 (74 ) — — — Defined benefit pension plan 202 (57 ) 145 490 (196 ) 294 Other comprehensive income (loss), net $ (387 ) $ 105 $ (282 ) $ 272 $ (117 ) $ 155 (a) Realized gains on securities transactions included in gains on sales of investment securities in the accompanying Consolidated Statements of Operations (b) Tax effect included in income tax expense in the accompanying Consolidated Statements of Operations The components of accumulated other comprehensive loss at September 30, 2018 and 2017 were as follows: September 30, 2018 2017 (In thousands) Available-for-sale investments $ (544 ) $ (106 ) Defined benefit pension plan (930 ) (898 ) Total accumulated other comprehensive loss $ (1,474 ) $ (1,004 ) 13. Bank-Owned Life Insurance The Company has purchased Bank-Owned Life Insurance policies (“BOLI”). BOLI involves the purchasing of life insurance by the Company on directors and executive officers. The proceeds are used to help defray the costs of non-qualified compensation plans. The Company is the owner and beneficiary of the policies. BOLI is recorded on the Consolidated Balance Sheets at its cash surrender value and changes in the cash surrender value are recorded in other income in the Consolidated Statement of Operations. 14. Off-Balance Sheet Credit Related Financial Instruments In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under commercial lines of credit. Such financial instruments are recorded when they are funded. The Company does not engage in the use of derivative financial instruments. See Note Q, “Financial Instruments With Off-Balance Risk”. 15. Segment Reporting The Company acts as an independent, community, financial services provider, and offers traditional banking and related financial services to individual, business and government customers. The Company offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and home equity loans; and the provision of other financial services. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial and retail operations of the Company. As such, discrete financial information is not available and segment reporting would not be meaningful. 16. New Accounting Pronouncements In connection with the preparation of quarterly and annual reports in accordance with the Securities and Exchange Commission’s (“SEC”) Securities Exchange Act of 1934, SEC Staff Accounting Bulletin Topic 11.M requires the disclosure of the impact that recently issued accounting standards will have on financial statements when they are adopted in the future. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606 Revenue Recognition Based on our evaluation under the current guidance, we estimated that substantially all of our interest income and non-interest income will not be impacted by the adoption of ASU 2014-09 because either the revenue from those contracts with customers is covered by other guidance in US GAAP or the revenue recognition outcomes anticipated with the adoption of ASU 2014-09 will likely be similar to our current revenue recognition practices. The Company evaluated certain noninterest revenue streams, including, deposit related fees, service and interchange fees, and merchant income to determine the potential impact of the guidance on the Company’s consolidated financial statements. The Company expects additional financial statement disclosures of non-interest income revenue streams with the adoption of this ASU. In addition, we are reviewing our business processes, systems and controls to support recognition and disclosures under the new standard. The Company is expected to use the modified retrospective method for transition in which the cumulative effect will be recognized at the date of adoption with no restatement of comparative periods presented. The adoption of the ASU is not expected to have a material effect on the Company’s consolidated financial statements. In January 2016, FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. In addition, the amendments in this ASU require an entity to disclose the fair value of its financial instruments using the exit price notion. Exit price is 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. For public entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has updated the fair value disclosure on Note R “Fair Value Disclosures” in this report to reflect adoption of this standard, to include using the exit price notion in the fair value disclosure of financial instruments. The Company`s adoption of the ASU did not have a significant impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In August 2017, the FASB issued the ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In February 2018, the FASB issued ASU 2018-02, Income Statement- Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The Company adopted the provisions of ASU 2018-02 effective September 30, 2018 and elected to record a reclassification adjustment of $188,000 from AOCI to retained earnings in the consolidated statements of stockholders’ equity for stranded tax effects resulting from enactment of the Tax Act. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Sep. 30, 2018 | |
Share-based Compensation [Abstract] | |
STOCK-BASED COMPENSATION | NOTE C – STOCK-BASED COMPENSATION The Company follows FASB Accounting Standards Codification (“ASC”) Section 718, Compensation-Stock Compensation, which covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans. ASC 718 requires that compensation cost relating to share-based payment transactions be recognized in financial statements. The cost is measured based on the fair value of the equity or liability instruments issued. Stock options generally vest over a five-year service period and expire ten years from issuance. The fair values of all option grants were estimated using the Black-Scholes option-pricing model. Management recognizes compensation expense for the fair values of these awards, which have graded vesting, on a straight-line basis over the vesting period of the awards. Once vested, these awards are irrevocable. There was no activity for the Company’s stock option plan for the year ended September 30, 2018. The following is a summary of the status of the Company’s stock option activity and related information for its option plan for the year ended September 30, 2017 and 2018. Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Stock Options Exercise Price Contractual Life Value Balance at September 30, 2016 188,276 $ 14.61 0.4 years $ — Granted — — Exercised — — Forfeited — — Expired (188,276 ) 14.61 Balance at September 30, 2017 — $ — $ — $ — Granted — — Exercised — — Forfeited — — Expired — — Balance at September 30, 2018 — $ — $ — $ — Exercisable at September 30, 2018 — $ — $ — $ — There were no grants, vested shares or forfeitures of non-vested restricted stock awards as of or during the twelve months ended September 30, 2018 and 2017. There were no stock option and stock award expenses included with compensation expense for the years ended September 30, 2018 and 2017. The Company has an Employee Stock Ownership Plan ("ESOP") for the benefit of employees who meet the eligibility requirements as defined in the plan. The ESOP trust purchased 217,863 shares of common stock in the open market using proceeds of a loan from the Company. The total cost of shares purchased by the ESOP trust was $2.3 million, reflecting an average cost per share of $10.58. The Bank will make cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the Company. The loan bears a variable interest rate that adjusts annually to Prime Rate (4.50% at January 1, 2018) with principal and interest payable annually in equal installments over thirty years. The loan is secured by shares of the Company’s stock. As the debt is repaid, shares are released as collateral and allocated to qualified employees. Accordingly, the shares pledged as collateral are reported as unearned ESOP shares in the Consolidated Balance Sheets. The Company accounts for its ESOP in accordance with FASB ASC Topic 718, “Employer’s Accounting for Employee Stock Ownership Plans”. As shares are released from collateral, the Company reports compensation expense equal to the current market price of the shares, and the shares become outstanding for earnings per share computations. The Company's contribution expense for the ESOP was $157,000 and $154,000 for years ended September 30, 2018 and 2017, respectively. The following table presents the components of the ESOP shares as of September 30, 2018: Unreleased shares at September 30, 2017 52,092 Shares released for allocation during the year ended September 30, 2018 (12,445 ) Unreleased shares at September 30, 2018 39,647 Total released shares 178,216 Total ESOP shares 217,863 The aggregate fair value of the unreleased shares at September 30, 2018 was approximately $482,000. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 12 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | NOTE D - INVESTMENT SECURITIES The amortized cost, gross unrealized gains or losses and fair value of the Company’s investment securities available-for-sale and held-to-maturity are as follows: September 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available-for-sale: Obligations of U.S. government agencies: Mortgage backed securities - residential $ 1,463 $ 40 $ (8 ) $ 1,495 Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential 19,262 13 (662 ) 18,613 Debt securities 2,500 — (139 ) 2,361 Total securities available for sale $ 23,225 $ 53 $ (809 ) $ 22,469 September 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities held-to-maturity: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 568 $ — $ (93 ) $ 475 Mortgage-backed securities - commercial 904 — (9 ) 895 Obligations of U.S. government-sponsored enterprises: Mortgage backed securities - residential 26,316 4 (867 ) 25,453 Debt securities 2,464 — (142 ) 2,322 Private label mortgage-backed securities - residential 393 1 — 394 Corporate securities 3,000 — (388 ) 2,612 Total securities held to maturity $ 33,645 $ 5 $ (1,499 ) $ 32,151 At September 30, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available-for-sale: Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential $ 9,442 $ 9 $ (125 ) $ 9,326 Debt securities 2,500 — (51 ) 2,449 Private label mortgage-backed securities-residential 40 — — 40 Total securities available-for-sale $ 11,982 $ 9 $ (176 ) $ 11,815 At September 30, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities held-to-maturity: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 3,466 $ 123 $ (96 ) $ 3,493 Mortgage-backed securities - commercial 968 — (10 ) 958 Obligations of U.S. government-sponsored enterprises: Mortgage backed securities - residential 39,016 349 (251 ) 39,114 Debt securities 4,461 — (24 ) 4,437 Private label mortgage-backed securities - residential 457 — (2 ) 455 Corporate securities 3,000 — (216 ) 2,784 Total securities held-to-maturity $ 51,368 $ 472 $ (599 ) $ 51,241 The contractual maturities of mortgage-backed securities generally exceed 10 years; however, the effective lives are expected to be shorter due to anticipated prepayments. The amortized cost and fair value of the Company’s securities available-for-sale at September 30, 2018 are summarized in the following table: September 30, 2018 (In thousands) Amortized Fair Cost Value Due within 1 year $ — $ — Due after 1 but within 5 years 1,500 1,411 Due after 5 but within 10 years 1,000 950 Due after 10 years — — Total debt securities 2,500 2,361 Mortgage-backed securities: Residential (1) 20,725 20,108 Commercial — — Total $ 23,225 $ 22,469 (1) Available-for-sale mortgage-backed securities – residential include an amortized cost of $1.5 million and a fair value of $1.5 million for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $19.3 million and a fair value of $18.6 million. There were no residential mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises. The maturities of the debt securities and the mortgage-backed securities held to maturity at September 30, 2018 are summarized in the following table: September 30, 2018 Amortized Fair Cost Value (In thousands) Due within 1 year $ — $ — Due after 1 but within 5 years 1,499 1,446 Due after 5 but within 10 years 3,000 2,612 Due after 10 years 965 876 Total debt securities 5,464 4,934 Mortgage backed securities: Residential (1) 27,277 26,322 Commercial (2) 904 895 Total $ 33,645 $ 32,151 (1) Held-to-maturity mortgage-backed securities – residential include an amortized cost of $568,000 and a fair value of $475,000 for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $26.3 million and a fair value of $25.5 million. Also included are mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises with an amortized cost of $393,000 and a fair value of $394,000. (2) Held-to-maturity mortgage-backed securities – commercial include an amortized cost of $904,000 and a fair value of $895,000 for obligations of U.S. government agencies issued by the Small Business Administration. There were no sales of securities from the available-for-sale portfolios during the year ended September 30, 2018 and 2017. There were $3.4 million sales of securities from the held-to-maturity portfolios during the year ended September 30, 2018 and there were no sales from the held-to-maturity portfolios during the year ended September 30, 2017. In accordance with ASC 320 “Investments- Debt and Equity Securities”, sales from the held to maturity portfolio occurred after the Company had already collected a substantial portion (at least 85 percent) of the principal outstanding at acquisition due to prepayments on the debt security. The net gain on sales of held-to-maturity securities totaled $107,000 for the year ended September 30, 2018. As of September 30, 2018 and 2017, securities having an estimated fair value of approximately $25.0 million and $21.8 million, respectively, were pledged to secure public deposits. Details of securities with unrealized losses at September 30, 2018 and 2017 are as follows: September 30, 2018 Less Than 12 Months 12 Months Or Greater Total Number of Fair Unrealized Fair Unrealized Fair Unrealized Securities Value Losses Value Losses Value Losses (Dollars in thousands) Obligations of U.S. government agencies: Mortgage-backed securities - residential 3 $ 532 $ (8 ) $ 475 $ (93 ) $ 1,007 $ (101 ) Mortgage-backed securities - commercial 1 — — 895 (9 ) 895 (9 ) Obligations of U.S. government-sponsored enterprises Mortgage-backed securities - residential 34 11,336 (312 ) 30,605 (1,217 ) 41,941 (1,529 ) Debt securities 4 — — 4,683 (281 ) 4,683 (281 ) Private label mortgage-backed securities residential 1 — — 104 — 104 — Corporate securities 1 — — 2,612 (388 ) 2,612 (388 ) Total 44 $ 11,868 $ (320 ) $ 39,374 $ (1,988 ) $ 51,242 $ (2,308 ) September 30, 2017 Less Than 12 Months 12 Months Or Greater Total Number of Fair Unrealized Fair Unrealized Fair Unrealized Securities Value Losses Value Losses Value Losses (Dollars in thousands) Obligations of U.S. government agencies: Mortgage-backed securities- residential 2 $ — $ — $ 605 $ (96 ) $ 605 $ (96 ) Mortgage-backed securities - commercial 1 958 (10 ) — — 958 (10 ) Obligations of U.S. government-sponsored enterprises Mortgage backed securities- residential 20 6,582 (92 ) 21,713 (284 ) 28,295 (376 ) Debt securities 5 4,890 (71 ) 1,996 (4 ) 6,886 (75 ) Private label mortgage-backed securities- residential 2 — — 193 (2 ) 193 (2 ) Corporate securities 1 — — 2,784 (216 ) 2,784 (216 ) Total 31 $ 12,430 $ (173 ) $ 27,291 $ (602 ) $ 39,721 $ (775 ) The investment securities listed above currently have fair values less than amortized cost and therefore contain unrealized losses. The Company evaluated these securities and determined that the decline in value was primarily related to fluctuations in the interest rate environment and were not related to any company or industry specific event. The Company anticipates full recovery of amortized costs with respect to these securities. The Company does not intend to sell these securities and has determined that it is not more likely than not that the Company would be required to sell these securities prior to maturity or market price recovery. Management has considered factors regarding other than temporarily impaired securities and determined that there are no securities with impairment that is other than temporary as of September 30, 2018 and 2017. |
LOANS RECEIVABLE, NET
LOANS RECEIVABLE, NET | 12 Months Ended |
Sep. 30, 2018 | |
Loans Receivable, Net [Abstract] | |
LOANS RECEIVABLE, NET | NOTE E - LOANS RECEIVABLE, NET Loans receivable are comprised of the following: September 30, September 30, 2018 2017 (In thousands) One-to four-family residential $ 185,287 $ 178,336 Commercial real estate 219,347 207,118 Construction 30,412 22,622 Home equity lines of credit 17,982 18,536 Commercial business 53,320 41,113 Other 6,150 6,266 Total loans receivable 512,498 473,991 Net deferred loan costs 132 177 Allowance for loan losses (4,200 ) (3,475 ) Total loans receivable, net $ 508,430 $ 470,693 Certain directors and executive officers of the Company have loans with the Bank. Such loans were made in the ordinary course of business at the Bank’s normal credit terms, including interest rate and collateralization, and do not represent more than a normal risk of collection. Total loans receivable from directors and executive officers, and affiliates thereof, were approximately $2.8 million and $2.9 million at September 30, 2018 and 2017, respectively. There were $137,000 in new advances on existing lines of credit during the year ended September 30, 2018 and there were no principal additions during the year ended September 30, 2017. Total principal repayments were approximately $231,000 and $305,000 for the year ended September 30, 2018 and 2017, respectively. At September 30, 2018 and 2017, the Company was servicing loans for others amounting to approximately $41.4 million and $38.7 million, respectively. The Company held mortgage servicing rights in the amount of $45,000 and $69,000 at September 30, 2018 and 2017, respectively. Servicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and foreclosure processing. Loan servicing income is recorded on the cash basis and includes servicing fees from investors and certain charges collected from borrowers, such as late payment fees. In connection with loans serviced for others, the Company held borrowers’ escrow balances of approximately $78,000 and $97,000 at September 30, 2018 and 2017, respectively. The segments of the Bank’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The residential mortgage loan segment is further disaggregated into two classes: amortizing term loans, which are primarily first liens, and home equity lines of credit, which are generally second liens. The commercial loan segment is further disaggregated into three classes: loans secured by multifamily structures, owner-occupied commercial structures, and non-owner occupied nonresidential properties. The construction loan segment consists primarily of developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures and to a lesser extent one-to-four family residential construction loans made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Construction loans to developers and investors have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time of the loan. The commercial business loan segment consists of loans made for the purpose of financing the activities of commercial customers and consists primarily of revolving lines of credit. The consumer loan segment consists primarily of stock-secured installment loans, but also includes unsecured personal loans and overdraft lines of credit connected with customer deposit accounts. Management evaluates individual loans in all segments for possible impairment if the loan either is in nonaccrual status, or is risk rated Substandard and is greater than 90 days past due. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in evaluating impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. Once the determination has been made that a loan is impaired, the recorded investment in the loan is compared to the fair value of the loan using one of three methods: (a) the present value of expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s current observable market price; or (c) the fair value of the collateral securing the loan, less anticipated selling and disposition costs. The method is selected on a loan-by loan basis, with management primarily utilizing the fair value of collateral method. If there is a shortfall between the fair value of the loan and the recorded investment in the loan, the Company charges the difference to the allowance for loan loss as a charge-off and carries the impaired loan on its books at fair value. It is the Company’s policy to evaluate impaired loans on an annual basis to ensure the recorded investment in a loan does not exceed its fair value. The following tables present impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary for the periods presented: Impaired Loans Impaired Loans with with No Specific Specific Allowance Allowance Total Impaired Loans Unpaid At and for the year ended Recorded Related Recorded Recorded Principal September 30, 2018 Investment Allowance Investment Investment Balance (In thousands) One-to four-family residential $ — $ — $ 1,132 $ 1,132 $ 1,132 Commercial real estate — — 3,961 3,961 3,961 Home equity lines of credit — — 58 58 58 Commercial business — — 710 710 801 Total impaired loans $ — $ — $ 5,861 $ 5,861 $ 5,952 Impaired Loans Impaired Loans with with No Specific Specific Allowance Allowance Total Impaired Loans Unpaid At and for the year ended Recorded Related Recorded Recorded Principal September 30, 2017 Investment Allowance Investment Investment Balance (In thousands) One-to four-family residential $ — $ — $ 3,124 $ 3,124 $ 3,436 Commercial real estate — — 4,088 4,088 4,110 Commercial business — — 243 243 243 Total impaired loans $ — $ — $ 7,455 $ 7,455 $ 7,789 The average recorded investment in impaired loans was $6.1 million and $8.6 million for the years ended September 30, 2018 and 2017, respectively. The Company’s impaired loans include $1.2 million in delinquent loans and $4.7 million in performing Troubled Debt Restructurings (“TDRs”), as TDRs remain impaired loans until fully repaid. During the years ended September 30, 2018 and 2017, interest income of $238,000 and $253,000, respectively, was recognized for TDR loans while no interest income was recognized for delinquent non-accrual loans. The following tables present the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the Bank’s internal risk rating system for the periods presented: Special Pass Mention Substandard Doubtful Total (In thousands) September 30, 2018 One-to four-family residential $ 185,118 $ — $ 169 $ — $ 185,287 Commercial real estate 217,935 753 659 — 219,347 Construction 30,412 — — — 30,412 Home equity lines of credit 17,924 — 58 — 17,982 Commercial business 52,845 — 475 — 53,320 Other 6,150 — — — 6,150 Total $ 510,384 $ 753 $ 1,361 $ — $ 512,498 Special Pass Mention Substandard Doubtful Total (In thousands) September 30, 2017 One-to four-family residential $ 176,285 $ 127 $ 1,924 $ — $ 178,336 Commercial real estate 204,435 — 2,683 — 207,118 Construction 20,194 — 2,428 — 22,622 Home equity lines of credit 18,536 — — — 18,536 Commercial business 40,820 293 — — 41,113 Other 6,266 — — — 6,266 Total $ 466,536 $ 420 $ 7,035 $ — $ 473,991 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans for the periods presented: 30-59 60-89 Days Days 90 Days + Total Non- Total Current Past Due Past Due Past Due Past Due Accrual Loans (In thousands) September 30, 2018 One-to four-family residential $ 185,132 $ 17 $ — $ 138 $ 155 $ 138 $ 185,287 Commercial real estate 218,892 — — 455 455 455 219,347 Construction 30,412 — — — — — 30,412 Home equity lines of credit 17,892 — — 90 90 90 17,982 Commercial business 52,845 252 — 223 475 223 53,320 Other 6,150 — — — — — 6,150 Total $ 511,323 $ 269 $ — $ 906 $ 1,175 $ 906 $ 512,498 30-59 60-89 Days Days 90 Days + Total Non- Total Current Past Due Past Due Past Due Past Due Accrual Loans (In thousands) September 30, 2017 One-to four-family residential $ 176,546 $ — $ 127 $ 1,663 $ 1,790 $ 1,663 $ 178,336 Commercial real estate 206,218 418 — 482 900 482 207,118 Construction 22,622 — — — — — 22,622 Home equity lines of credit 18,344 — 192 — 192 — 18,536 Commercial business 40,420 400 80 213 693 213 41,113 Other 6,266 — — — — — 6,266 Total $ 470,416 $ 818 $ 399 $ 2,358 $ 3,575 $ 2,358 $ 473,991 The amount of interest income not recognized on non-accrual loans was approximately $40,000 and $106,000 for the years ended September 30, 2018 and 2017, respectively. At September 30, 2018 and September 30, 2017, there were no commitments to lend additional funds to borrowers whose loans are classified as non-accrual. An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of NPLs. The Bank’s methodology for determining the ALL is based on the requirements of ASC Section 310-10-35 for loans individually evaluated for impairment (discussed above) and ASC Subtopic 450-20 for loans collectively evaluated for impairment, as well as the Interagency Policy Statements on the Allowance for Loan and Lease Losses and other bank regulatory guidance. Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative and economic factors. The loans are segmented into classes based on their inherent varying degrees of risk, as described above. Management tracks the historical net charge-off activity by segment and utilizes this figure, as a percentage of the segment, as the general reserve percentage for pooled, homogenous loans that have not been deemed impaired. Typically, an average of losses incurred over 5 historical years is used. Non-impaired credits are segregated for the application of qualitative factors. Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: national and local economic trends and conditions; levels of and trends in delinquency rates and non-accrual loans; trends in volumes and terms of loans; effects of changes in lending policies; experience, ability, and depth of lending staff; value of underlying collateral; and concentrations of credit from a loan type, industry and/or geographic standpoint. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL. Since loans individually evaluated for impairment are promptly written down to their fair value, typically there is no portion of the ALL for loans individually evaluated for impairment. The following tables summarize the activity in the allowance for loan losses by loan category for the years ended September 30, 2018 and 2017: One-to Four- Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Balance-September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 Charge-offs (213 ) — — — (170 ) (3 ) — (386 ) Recoveries 87 23 3 — 1 — — 114 Provision 226 240 — 52 364 22 93 997 Balance-September 30, 2018 $ 687 $ 1,540 $ 493 $ 109 $ 1,151 $ 25 $ 195 $ 4,200 One-to Four- Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Balance-September 30, 2016 $ 542 $ 1,075 $ 361 $ 71 $ 976 $ 9 $ 22 $ 3,056 Charge-offs (295 ) (23 ) — — (672 ) — — (990 ) Recoveries 36 — 12 14 4 — — 66 Provision 304 225 117 (28 ) 648 (3 ) 80 1,343 Balance-September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 The following tables summarize the ALL by loan category, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of September 30, 2018 and September 30, 2017: One-to-Four Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Allowance for Loan Losses: Balance - September 30, 2018 $ 687 $ 1,540 $ 493 $ 109 $ 1,151 $ 25 $ 195 $ 4,200 Individually evaluated for impairment — — — — — — — — Collectively evaluated for impairment 687 1,540 493 109 1,151 25 195 4,200 Loans receivable: Balance - September 30, 2018 $ 185,287 $ 219,347 $ 30,412 $ 17,982 $ 53,320 $ 6,150 $ — $ 512,498 Individually evaluated for impairment 1,132 3,961 — 58 710 — — 5,861 Collectively evaluated for impairment 184,155 215,386 30,412 17,924 52,610 6,150 — 506,637 One-to- Four Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Allowance for Loan Losses: Balance - September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 Individually evaluated for impairment — — — — — — — — Collectively evaluated for impairment 587 1,277 490 57 956 6 102 3,475 Loans receivable: Balance - September 30, 2017 $ 178,336 $ 207,118 $ 22,622 $ 18,536 $ 41,113 $ 6,266 $ — $ 473,991 Individually evaluated for impairment 3,124 4,088 — — 243 — — 7,455 Collectively evaluated for impairment 175,212 203,030 22,622 18,536 40,870 6,266 — 466,536 The allowance for loan losses is based on estimates, and actual losses will vary from current estimates. Management believes that the segmentation of the loan portfolio into homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date. A TDR is a loan that has been modified whereby the Bank has agreed to make certain concessions to a borrower to meet the needs of both the borrower and the Bank to maximize the ultimate recovery of a loan. TDR occurs when a borrower is experiencing, or is expected to experience, financial difficulties and the loan is modified using a modification that would otherwise not be granted to the borrower. The types of concessions granted generally included, but are not limited to interest rate reductions, limitations on the accrued interest charged, term extensions, and deferment of principal. A default on a troubled debt restructured loan for purposes of this disclosure occurs when a borrower is 90 days past due or a foreclosure or repossession of the applicable collateral has occurred. There was one TDR during the year ended September , 2017, and there were no TDRs during the year ended September 30, 2018. The following table summarizes the TDRs during the year ended , 2017: Year Ended September 30, 2017 Number of Investment Before Investment After Loans TDR Modification TDR Modification (Dollars in thousands) One-to four-family residential 1 $ 182 $ 182 Total 1 $ 182 $ 182 The Company held no interest-only mortgage loans at September 30, 2018 and held interest-only loans with principal balances of $6.1 million at September 30, 2017. The average interest-only term on these loans was 10 years at which time the loans reset to fully amortize over 20 years, on average. Total loans pledged as collateral against Federal Home Loan Bank of New York borrowings was $172.4 million and $177.6 million as of September 30, 2018 and 2017, respectively. |
ACCRUED INTEREST RECEIVABLE
ACCRUED INTEREST RECEIVABLE | 12 Months Ended |
Sep. 30, 2018 | |
Interest Receivable and Other Assets [Abstract] | |
ACCRUED INTEREST RECEIVABLE | NOTE F - ACCRUED INTEREST RECEIVABLE The following is a summary of accrued interest receivable: September 30, 2018 2017 (In thousands) Loans $ 2,026 $ 1,767 Investment securities 59 57 Mortgage-backed securities 96 105 Total accrued interest receivable $ 2,181 $ 1,929 |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | NOTE G - PREMISES AND EQUIPMENT Premises and equipment consist of the following: Estimated September 30, Useful Lives 2018 2017 (Dollars in thousands) Land Indefinite $ 3,811 $ 3,811 Buildings and improvements 10-40 years 22,514 22,453 Furniture, fixtures and equipment 5-10 years 3,288 3,065 29,613 29,329 Less accumulated depreciation (12,623 ) (11,762 ) Premises and equipment, net $ 16,990 $ 17,567 For the years ended September 30, 2018 and 2017, depreciation expense included in occupancy expense amounted to approximately $861,000 and $816,000, respectively. Hungaria Urban Renewal, LLC was formed in 2002 and its sole purpose was to purchase the land and construct the office building for which the Company is the primary tenant. The Bank owns a 100% interest in Hungaria Urban Renewal, LLC, which has no other business other than owning the Bank’s main office site. At September 30, 2018, Hungaria Urban Renewal, LLC accounted for approximately $3.1 million, $9.3 million and $0 of land, building, furniture, fixtures and equipment, net of depreciation, respectively. At September 30, 2017, Hungaria Urban Renewal, LLC accounted for approximately $3.1 million, $9.7 million, and $0 of land, building, and furniture, fixtures and equipment, net of depreciation, respectively. |
OTHER REAL ESTATE OWNED
OTHER REAL ESTATE OWNED | 12 Months Ended |
Sep. 30, 2018 | |
OTHER REAL ESTATE OWNED [Abstract]. | |
OTHER REAL ESTATE OWNED | NOTE H - OTHER REAL ESTATE OWNED The Company held $8.6 million of real estate owned properties at September 30, 2018 and $11.1 million at September 30, 2017. The Company incurred write-downs totaling $418,000 and $218,000 on these properties for the years ended September 30, 2018 and 2017; these amounts were carried as valuation allowances at September 30, 2018 and 2017, respectively. Further declines in real estate values may result in increased foreclosed real estate expense in the future. Routine holding costs are charged to expense as incurred and improvements to real estate owned that enhance the value of the real estate are capitalized. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Sep. 30, 2018 | |
Deposits [Abstract] | |
DEPOSITS | NOTE I - DEPOSITS A summary of deposits by type of account follows: September 30, 2018 2017 (In thousands) Demand accounts $ 104,745 $ 98,728 Savings accounts 81,373 107,362 NOW accounts 46,336 43,556 Money market accounts 167,340 137,527 Certificate of deposit 112,014 108,740 Retirement accounts 18,329 19,288 Total deposits $ 530,137 $ 515,201 The current FDIC insurance limit on bank deposit accounts is $250,000. The aggregate amount of deposit accounts with a minimum denomination of $250,000 was approximately $266.6 million at September 30, 2018 compared with $227.2 million at September 30, 2017. The aggregate amount of certificate deposits, including individual retirement accounts with balance of $250,000 or more was $35.6 million at September 30, 2018 compared with $31.5 million at September 30, 2017. At September 30, 2018, certificates of deposit (including retirement accounts and brokered certificate deposit accounts) have contractual maturities as follows (in thousands): Year Ending September 30, 2019 $ 65,984 2020 39,334 2021 13,979 2022 3,381 2023 and after 7,665 Total $ 130,343 |
BORROWINGS
BORROWINGS | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
BORROWINGS | NOTE J - BORROWINGS 1. Federal Home Loan Bank of New York Advances Long term Federal Home Loan Bank of New York (“FHLBNY”) advances at September 30, 2018 and September 30, 2017 totaled approximately $35.5 million and $31.9 million, respectively. The weighted average interest rate on advances outstanding at September 30, 2018 and 2017 were 2.09% and 2.00%, respectively. The advances were collateralized by unencumbered qualified assets consisting of one-to-four family residential and commercial real estate mortgage loans. Advances are made pursuant to several different credit programs offered from time to time by the FHLBNY. Long term FHLBNY advances as of September 30, 2018 mature as follows (in thousands): Year Ending September 30, 2019 $ 8,940 2020 10,294 2021 2,500 2022 7,731 2023 3,650 Thereafter 2,409 Total $ 35,524 Additionally, the Company has established an Overnight Line of Credit arrangement with the FHLBNY. The total amount available under the line of credit is based on the amount of eligible collateral pledged to the FHLBNY. At September 30, 2018 and 2017, the Company had available credit from the FHLBNY totaling $78.7 million and $92.6 million, respectively. Information concerning short-term borrowings with the FHLBNY is summarized as follows: September 30, 2018 2017 (Dollars in thousands) Balance at end of year $ — $ — Weighted average balance during the year $ 3,418 $ 966 Maximum month-end balance during the year $ 25,175 $ 11,150 Average interest rate during the year 2.16 % 1.00 % 2. Securities Sold Under Reverse Repurchase Agreements Qualifying repurchase agreements are treated as financings and are reflected as a liability in the Consolidated Balance Sheets. The Company did not have repurchase agreements outstanding at September 30, 2018 and September 30, 2017. |
SERVICING POLICY
SERVICING POLICY | 12 Months Ended |
Sep. 30, 2018 | |
Transfers and Servicing [Abstract] | |
SERVICING POLICY | NOTE K – SERVICING POLICY The Company originates and sells loans receivable secured by one-to four-family residential properties and commercial business loans guaranteed by the Small Business Administration (the “SBA”). The Company has sold loans on a servicing retained basis and on a servicing released basis. Loans sold with servicing retained and servicing released during the year ended September 30, 2018 were $8.7 million and $0, respectively. Loans sold with servicing retained and servicing released during the year ended September 30, 2017 were $4.7 million and $0, respectively. The Company accounts for sales in accordance with ASC 860, Transfers and Servicing. Upon sale, the receivables are removed from the balance sheet, mortgage servicing rights are recorded as an asset for servicing rights retained, and a gain on sale, if applicable, is recognized for the difference between the carrying value of the receivables and the sales proceeds, net of origination costs. Gains on sales of loans, representing the difference between the total sales price received for the loans and the allocated cost of the loans, are recognized when mortgage loans are sold and delivered to the purchasers. Loans are accounted for as sold when control of the mortgage is surrendered. Control over the mortgage loans is deemed surrendered when (1) the mortgage loans have been isolated from the Company, (2) the buyer has the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the mortgage loans and (3) the Company does not maintain effective control over the mortgage loans through either (a) an agreement that entitles and obligates the Company to repurchase or redeem the mortgage loans before maturity, or (b) the ability to unilaterally cause the buyer to return specific mortgage loans. The Company services one-to-four family residential mortgage loans for investors in the secondary mortgage market, which are not included in the Consolidated Balance Sheets. The Company’s fee is a percentage of the principal balance and is recognized as income when received. At September 30, 2018 and 2017, the Company was servicing such sold loans in the amount of $8.5 million and $10.1 million, respectively. Loan servicing includes collecting and remitting loan payments, accounting for principal and interest, contacting delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults, making certain insurance and tax payments on behalf of the borrowers and generally administering the loans. Mortgage servicing rights are amortized in proportion to, and over the period of, estimated net servicing revenues and are included in other assets on the Consolidated Balance Sheets. Activity in mortgage servicing rights during the years ended September 30, 2018 and 2017 are summarized as follows: September 30, 2018 2017 (In thousands) Beginning balance $ 69 $ 97 Origination of mortgage servicing rights — — Amortization (24 ) (28 ) Ending balance $ 45 $ 69 Mortgage servicing rights are carried at the lower of amortized cost or fair value. Fair values are estimated using discounted cash flows based on a current market interest rate. The Company also services the SBA guaranteed portion of commercial business loans sold to investors in the secondary market, which are not included in the Consolidated Balance Sheets. The Company’s fee is a percentage of the principal balance and is recognized as income when received. At September 30, 2018 and 2017, the Company was servicing SBA loans sold in the amount of $26.5 million and $22.4 million, respectively. Loan servicing includes collecting and remitting loan payments, accounting for principal and interest, contacting delinquent mortgagors, supervising foreclosures and property dispositions in the event of unremedied defaults, making certain insurance and tax payments on behalf of the borrowers and generally administering the loans. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE L - INCOME TAXES The income tax expense is comprised of the following components for the years ended September 30, 2018 and 2017: September 30, 2018 2017 (In thousands) Income tax expense at the statutory federal tax rate of 24% for the year ended September 30, 2018 and 34% for the year ended September 30, 2017 $ 839 $ 822 State tax expense 240 141 Reduction of deferred tax asset from tax legislation 410 — Other (18 ) 31 Income tax expense $ 1,471 $ 994 A reconciliation of income tax at the statutory tax rate to the effective income tax expense for the years ended September 30, 2018 and 2017 is as follows: September 30, 2018 2017 (In thousands) Income tax expense at statutory rate $ 839 $ 822 Increase (decrease) resulting from: State income taxes, net of federal income tax benefit 244 141 Tax-exempt income, net (70 ) (95 ) Nondeductible expenses 32 4 Employee stock ownership plan 5 7 Increase (decrease) in valuation allowance — 115 Increase due to change in tax law 410 — Other, net 11 — Total income tax expense $ 1,471 $ 994 The major sources of temporary differences and their deferred tax effect at September 30, 2018 and 2017 are as follows: September 30, 2018 2017 (In thousands) Allowance for loan losses $ 1,181 $ 1,388 Deferred loan fees — 1 Net operating losses — 431 Alternative minimum tax credit — 311 Unrealized loss, minimum pension liability 363 597 Net unrealized loss, investment securities available-for-sale 213 61 OREO 410 382 Straight line rent 125 177 Gross deferred tax asset 2,292 3,348 Depreciation (964 ) (1,370 ) Discount accretion on investments (87 ) (119 ) Employee benefits (66 ) (39 ) Deferred loan fees (19 ) — Mortgage servicing rights (13 ) (28 ) Gross deferred tax liability (1,149 ) (1,556 ) Net deferred tax asset, included in other assets $ 1,143 $ 1,792 In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences are deductible and carry forwards are available. There were no valuation allowances for the year ended September 30, 2018 and 2017. The Company has considered future market growth, forecasted earnings, future taxable income, feasible and permissible tax planning strategies in determining the realizability of deferred tax assets. If the Company was to determine that it would not be able to realize a portion of its net deferred tax asset in the future for which there is currently no valuation allowance, an adjustment to the net deferred tax asset would be charged to earnings in the period such determination was made. On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. ASC 740 (Income Taxes) requires the recognition of the effect of changes in tax laws or rates in the period in which the legislation is enacted. The changes in the deferred tax assets and liabilities remeasured at the new 21% federal tax rate are reflected in income tax expense for the year ended September 30, 2018. The Company expensed $410,000 due to the impact of the lower corporate tax rates on the deferred tax assets and liabilities. |
PENSION PLAN
PENSION PLAN | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
PENSION PLAN | NOTE M - PENSION PLAN The Company had a noncontributory defined benefit pension plan (the “Plan”) covering all eligible employees. On January 26, 2006, the Plan was frozen and amended to eliminate future benefit accruals after February 15, 2006. Plan assets are invested in six diversified investment funds of the Pentegra Retirement Trust (the “Trust”), a no load series open-ended mutual fund. The Trust has been given discretion by the Plan Sponsor to determine the appropriate strategic asset allocation versus plan liabilities, as governed by the Trust’s Statement of Investment Objectives and Guidelines. The long-term investment objective is to be invested 65% in equity securities (equity mutual funds) and 35% in debt securities (bond mutual funds). Asset rebalancing is performed at least annually, with interim adjustments made when the investment mix varies more than 5% from the target (i.e., a 10% target range). Risk/volatility is further managed by the distinct investment objectives of each of the Trust funds and the diversification within each fund. The following table sets forth the Plan’s funded status and amounts recognized in the Company’s Consolidated Balance Sheets at September 30, 2018 and September 30, 2017. September 30, 2018 2017 (In thousands) Actuarial present value of benefit obligations $ 4,390 $ 4,550 Change in benefit obligations Projected benefit obligation, beginning $ 4,550 $ 4,779 Interest cost 178 175 Actuarial (gain) loss (149 ) (214 ) Annuity payments and lump sum distributions (189 ) (190 ) Projected benefit obligation, end $ 4,390 $ 4,550 Change in plan assets Fair value of assets, beginning $ 3,237 $ 2,951 Actual return on plan assets 155 312 Employer contributions 200 164 Annuity payments and lump sum distributions (189 ) (190 ) Fair value of assets, end $ 3,403 $ 3,237 Funded status included with other liabilities $ (987 ) $ (1,313 ) Net pension cost for the years ended September 30, 2018 and 2017 included the following components: September 30, 2018 2017 (In thousands) Service cost benefits earned during the year $ — $ — Interest cost on projected benefit obligation 178 175 Expected return on plan assets (222 ) (202 ) Amortization of unrecognized net loss 119 166 Net pension cost $ 75 $ 139 For the year ended September 30, 2018 and 2017, the weighted average discount rate used in determining the actuarial net periodic pension cost was 4.00% and 3.75%, respectively. For the year ended September 30, 2018 and 2017, the weighted average discount rate used in determining the actuarial present value of the projected benefit obligation was 4.25% and 4.00%, respectively. The long-term rate-of-return-on-assets assumption was set based on historical returns earned by equities and fixed income securities, adjusted to reflect expectations of future returns as applied to the plan’s target allocation of asset classes. Equities and fixed income securities were assumed to earn rates of return in the ranges of 6-8% and 3-5%, respectively, with an assumed long-term inflation rate of 2.5% reflected within these ranges for the year ended September 30, 2018. When these overall return expectations are applied to the plan’s target allocation, the result is an expected rate of return of 5.0% to 7.0%. Accordingly, the expected long-term rate of return on assets was 7.00% for both 2018 and 2017. Current Asset Allocation The Plan’s weighted-average asset allocations at September 30, 2018 and 2017, by asset category are as follows: September 30, 2018 2017 Equity securities 64 % 68 % Debt securities (bond mutual funds) 36 % 32 % Other (money market fund) 0 % 0 % Total 100 % 100 % The target asset allocation set for the assets of the Plan are in equity securities ranging from 40 percent to 70 percent and in debt securities ranging from 30 percent to 60 percent. In general, the Plan assets are investment securities that are well-diversified in terms of industry, capitalization and asset class. The Plan assets are mostly a mix of U.S. Treasury security indexed funds, mutual funds indexed to the performance of Fortune 500 U.S. companies, debt securities held in bond funds, domestic and foreign common equity funds, and a money market fund. The Plan’s exposure to a concentration of credit risk is limited by the diversification of the investments into various investment options with multiple asset managers. Expected Contributions For the fiscal year ending September 30, 2019, the Company expects to contribute $67,299 to the Plan. Estimated Future Benefit Payments The following benefit payments are expected to be paid as follows (in thousands): October 1, 2018 through September 30, 2019 $ 207 October 1, 2019 through September 30, 2020 210 October 1, 2020 through September 30, 2021 211 October 1, 2021 through September 30, 2022 211 October 1, 2022 through September 30, 2023 215 October 1, 2023 through September 30, 2028 1,247 Total $ 2,301 Included in the funded status of the Plan at September 30, 2018 and 2017, are actuarial losses of $1,292,000 and $1,494,000, respectively. These amounts are included, net of related income tax effects of $363,000 and $597,000, respectively, in the accumulated other comprehensive loss component of stockholders’ equity. During the year ending September 30, 2019, approximately $105,000 of the actuarial losses is expected to be amortized into net periodic pension expense. The following table presents the Plan assets that are measured at fair value on a recurring basis by level within the fair value hierarchy under ASC Topic 820. Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. See Note R for further detail regarding fair value hierarchy. Fair Value Measurements at Reporting Date Using: Quoted Prices Significant in Active Markets Other Significant for Identical Observable Unobservable Total Assets (Level 1) Inputs (Level 2) Inputs (Level 3) (In thousands) At September 30, 2018 Investment Type Mutual Funds- Equity Large-Cap Value $ 468 $ 468 $ — $ — Large-Cap Core 480 480 — — Mid-Cap Core 198 198 — — Small-Cap Core 201 201 — — Non-U.S. Core 815 815 — — Mutual Funds- Fixed Income Intermediate-Term Core 1,241 1,241 — — Cash Equivalents Money Market — — — — Total Investment $ 3,403 $ 3,403 $ — $ — Fair Value Measurements at Reporting Date Using: Quoted Prices Significant in Active Markets Other Significant for Identical Observable Unobservable Total Assets (Level 1) Inputs (Level 2) Inputs (Level 3) (In thousands) At September 30, 2017 Investment Type Mutual Funds- Equity Large-Cap Value $ 462 $ 462 $ — $ — Large-Cap Core 482 482 — — Mid-Cap Core 224 224 — — Small-Cap Core 222 222 — — Non-U.S. Core 803 803 — — Mutual Funds- Fixed Income Intermediate-Term Core 1,033 1,033 — — Cash Equivalents Money Market 11 11 — — Total Investment $ 3,237 $ 3,237 $ — $ — Equity and debt securities are reported at fair value in the table above utilizing exchange quoted prices in active markets for identical instruments (Level 1 inputs). |
NONQUALIFIED COMPENSATION PLAN
NONQUALIFIED COMPENSATION PLAN | 12 Months Ended |
Sep. 30, 2018 | |
Postemployment Benefits [Abstract] | |
NONQUALIFIED COMPENSATION PLAN | NOTE N - NONQUALIFIED COMPENSATION PLAN The Company maintains a Supplemental Executive Retirement Plan (“SERP”) for the benefit of its senior officers. In addition, the Company also adopted voluntary Deferred Income and Emeritus Plans on behalf of its directors and those directors elected by the Board as “Director Emeritus.” The SERP provides the Company with the opportunity to supplement the retirement income of selected officers to achieve equitable wage replacement at retirement while the Deferred Income Plan provides participating directors with an opportunity to defer all or a portion of their fees into a tax deferred accumulation account for future retirement. The Director Emeritus Plan enables the Company to reward its directors for longevity of service in consideration of their availability and consultation. The SERP is based upon achieving retirement benefits equal to two percent multiplied by the number of service years multiplied by the final salary. In 2001, the Company adopted a New Director Emeritus Plan (the “New Plan”), which supplemented the prior Director Emeritus Plans. Under the New Plan, the directors will be entitled to a benefit upon attainment of his/her benefit age. The directors will receive an annual amount in monthly installments based on his/her total Board and Committee fees in the twelve months prior to attainment of his/her benefit age. The amount will be ten percent (10%) plus two and one-half percent (2 1/2%) for each year of service as a Director, with a minimum of fifty percent (50%), provided the Director has served for at least five (5) years, and a maximum of sixty percent (60%). The maximum benefit increases for any Director serving as Chairman of the Board to seventy-five percent (75%). The Company funds the plans through a modified endowment contract. Income recorded for the plans represents life insurance income as recorded based on the projected increases in cash surrender values of life insurance policies. As of September 30, 2018 and 2017, the Life Insurance Contracts had cash surrender values of approximately $11,843,000 and $11,550,000, respectively. The Company is recording benefit costs so that the cost of each participant’s retirement benefits is being expensed and accrued over the participant’s active employment so as to result in a liability at retirement date equal to the present value of the benefits expected to be provided. |
401(K) EMPLOYEE CONTRIBUTION PL
401(K) EMPLOYEE CONTRIBUTION PLAN | 12 Months Ended |
Sep. 30, 2018 | |
Defined Contribution Plan [Abstract] | |
401(K) EMPLOYEE CONTRIBUTION PLAN | NOTE O - 401(K) EMPLOYEE CONTRIBUTION PLAN The Company has a defined contribution 401(k) plan covering all employees, as defined under the plan document. Employees may contribute to the plan, as defined under the plan document, and the Company can make discretionary contributions. The Company contributed $163,000 and $145,000 to the plan for the years ended September 30, 2018 and 2017, respectively, and is included in compensation and employee benefits in the accompanying Consolidated Statements of Operations. |
COMMITMENTS
COMMITMENTS | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS | NOTE P - COMMITMENTS 1. Lease Commitments Approximate future minimum payments under non-cancelable operating leases are due as follows for the years indicated (in thousands): September 30, 2019 $ 696 September 30, 2020 700 September 30, 2021 705 September 30, 2022 595 September 30, 2023 602 Thereafter 2,130 Total $ 5,428 Total rental expense, included in occupancy expense, was approximately $803,000 and $732,000 for the years ended September 30, 2018 and 2017, respectively. 2. Contingencies The Company and its subsidiaries, from time to time, are a party to routine litigation that arises in the normal course of business. In the opinion of management, the resolution of this litigation, if any, would not have a material adverse effect on the Company’s consolidated financial position or results of operations. |
FINANCIAL INSTRUMENTS WITH OFF-
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK | 12 Months Ended |
Sep. 30, 2018 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK [Abstract] | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK | NOTE Q - FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK The Company may use derivative financial instruments, such as interest rate floors and collars, as part of its interest rate risk management. Interest rate caps and floors are agreements whereby one party agrees to pay or receive a floating rate of interest on a notional principal amount for a predetermined period of time if certain market interest rate thresholds are met. The Company considers the credit risk inherent in these contracts to be negligible. As of September 30, 2018 and 2017, the Company did not hold any interest rate floors or collars. The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the Consolidated Balance Sheets. The Company’s exposure to credit loss in the event of nonperformance by the other parties to the financial instrument for commitments to extend credits is represented by the contractual notional amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance-sheet instruments. At September 30, 2018 and 2017, the Company had outstanding commitments (substantially all of which expire within one year) to originate one-to four-family residential loans, construction loans, commercial real estate loans, commercial business loans and consumer loans. These commitments were comprised of fixed and variable rate loans. September 30, 2018 2017 (In thousands) Financial instruments whose contract amounts represent credit risk Letters of credit $ 1,939 $ 633 Unused lines of credit 54,127 64,220 Fixed rate loan commitments 4,397 2,429 Variable rate loan commitments 12,523 3,952 Total $ 72,986 $ 71,234 |
FAIR VALUE DISCLOSURES
FAIR VALUE DISCLOSURES | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE DISCLOSURES | NOTE R - FAIR VALUE DISCLOSURES The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The Company’s securities available-for-sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Company may be required to record at fair value other assets or liabilities on a non-recurring basis, such as held-to-maturity securities, mortgage servicing rights, loans receivable and other real estate owned, or OREO. These non-recurring fair value adjustments involve the application of lower-of-cost-or-market accounting or write-downs of individual assets. In accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), the Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1- Valuation is based upon quoted prices for identical instruments traded in active markets. Level 2- Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market. Level 3- Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. The results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. The Company bases its fair values on 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. ASC 820 requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The following is a description of valuation methodologies used for assets measured at fair value on a recurring basis. Securities available-for-sale The Company’s available-for-sale portfolio is carried at estimated fair value on a recurring basis, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income/loss in stockholders’ equity. The securities available-for-sale portfolio consists of U.S. government and government-sponsored enterprise obligations, municipal bonds, and mortgage-backed securities. The fair values of these securities are obtained from an independent nationally recognized pricing service. An independent pricing service provides prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities. The following table provides the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a recurring basis at September 30, 2018 and 2017: Fair Value at September 30, 2018 Total Level 1 Level 2 Level 3 (In thousands) Securities available for sale: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 1,495 $ — $ 1,495 $ — Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential 18,613 — 18,613 — Debt securities 2,361 — 2,361 — Total securities available for sale $ 22,469 $ — $ 22,469 $ — Fair Value at September 30, 2017 Total Level 1 Level 2 Level 3 (In thousands) Securities available for sale: Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential $ 9,326 $ — $ 9,326 $ — Debt securities 2,449 — 2,449 — Private label mortgage-backed securities-residential 40 — 40 — Total securities available for sale $ 11,815 $ — $ 11,815 $ — The following is a description of valuation methodologies used for assets measured at fair value on a non-recurring basis. Mortgage Servicing Rights Mortgage Servicing Rights (MSR’s) are carried at the lower of amortized cost or estimated fair value. The estimated fair value of MSRs is determined through a calculation of future cash flows, incorporating estimates of assumptions market participants would use in determining fair value including market discount rates, prepayment speeds, servicing income, servicing costs, default rates and other market driven data, including the market’s perception of future interest rate movements and, as such, are classified as Level 3. No valuation write-downs were made to MSR’s during the years ended September 30, 2018 and 2017. Impaired Loans Loans which meet certain criteria are evaluated individually for impairment. A loan is impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. All amounts due according to the contractual terms means that both the contractual interest and principal payments of a loan will be collected as scheduled in the loan agreement. Three impairment measurement methods are used, depending upon the collateral securing the asset: 1) the present value of expected future cash flows discounted at the loan’s effective interest rate; 2) the asset’s observable market price; or 3) the fair value of the collateral if the asset is collateral dependent. The regulatory agencies require this method for loans from which repayment is expected to be provided solely by the underlying collateral. The Company’s impaired loans are generally collateral dependent and, as such, are carried at the estimated fair value of the collateral less estimated selling and disposition costs. Fair value is estimated through current appraisals, and adjusted as necessary, by management, to reflect current market conditions and, as such, are generally classified as Level 3. Appraisals of collateral securing impaired loans are conducted by approved, qualified, and independent third-party appraisers. Such appraisals are ordered via the Bank’s credit administration department, independent from the lender who originated the loan, once the loan is deemed impaired, as described in the previous paragraph. Impaired loans are generally re-evaluated with an updated appraisal within one year of the last appraisal. However, the Company also obtains updated appraisals on performing construction loans that are approaching their maturity date to determine whether or not the fair value of the collateral securing the loan remains sufficient to cover the loan amount prior to considering an extension. The Company discounts the appraised “as is” value of the collateral for estimated selling and disposition costs and compares the resulting fair value of collateral to the outstanding loan amount. If the outstanding loan amount is greater than the discounted fair value, the Company requires a reduction in the outstanding loan balance or additional collateral before considering an extension to the loan. If the borrower is unwilling or unable to reduce the loan balance or increase the collateral securing the loan, it is deemed impaired and the difference between the loan amount and the fair value of collateral, net of estimated selling and disposition costs, is charged off through a reduction of the allowance for loan loss. Other Real Estate Owned Other real estate owned is carried at lower of cost or estimated fair value less disposal costs. The estimated fair value of the real estate is determined through current appraisals, and adjusted as necessary, by management, to reflect current market conditions. As such, other real estate owned is generally classified as Level 3. Valuation write-downs totaling $418,000 were made to seven properties held as other real estate owned during the year ended September 30, 2018. The properties were written down based on an updated appraisal of the real estate. The following tables provide the level of valuation assumptions used to determine the carrying value of our assets measured at fair value on a non-recurring basis at September 30, 2018 and 2017: Fair Value at September 30, 2018 Total Level 1 Level 2 Level 3 (In thousands) Impaired loans $ 464 $ — $ — $ 464 Other real estate owned 8,586 — — 8,586 Total $ 9,050 $ — $ — $ 9,050 Fair Value at September 30, 2017 Total Level 1 Level 2 Level 3 (In thousands) Impaired loans $ 909 $ — $ — $ 909 Other real estate owned 11,056 — — 11,056 Total $ 11,965 $ — $ — $ 11,965 Impaired loans reported for the period ended September 30, 2018 consisted of two loans with aggregate loan balances of $351,000 reduced by $90,000 in cumulative charge-offs. There were no specific loss reserves at September 30, 2018. The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Company has utilized Level 3 inputs to determine fair value: Quantitative Information about Level 3 Fair Value Measurements (Dollars in thousands) Fair Value Valuation September 30, 2018 Estimate Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 464 Appraisal of collateral (1) Appraisal adjustments (2) -10.2% to -32.0% (-21.3%) Other real estate owned $ 8,586 Appraisal of collateral (1) Liquidation expenses (2) -5.6% to -48.5% (-15.4%) Quantitative Information about Level 3 Fair Value Measurements (Dollars in thousands) Fair Value Valuation September 30, 2017 Estimate Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 909 Appraisal of collateral (1) Appraisal adjustments (2) -7.9% to -35.2% (-22.3%) Other real estate owned $ 11,056 Appraisal of collateral (1) Liquidation expenses (2) -8.0% to -55.4% (-25.0%) (1) Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable. (2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate fair value: Cash and interest earning deposits with banks: The carrying amounts are a reasonable estimate of fair value. Held to maturity securities: The fair values of Company’s held to maturity securities are obtained from an independent nationally recognized pricing service. The Company’s independent pricing service provides prices which are categorized as Level 2, as quoted prices in active markets for identical assets are generally not available for the securities. Federal Home Loan Bank Stock: FHLB stock is carried at cost. The carrying value approximates fair value based upon the redemption price provision of FHLB stock. Loans receivable: Fair value for the loan portfolio, excluding impaired loans, is estimated based on discounted cash flow analysis using interest rates currently offered for loans with similar terms to borrowers of similar credit quality. Bank owned life insurance: The carrying amounts are based on the cash surrender values of the individual policies, which is a reasonable estimate of fair value. Deposits: The fair value of savings deposits with no stated maturity, such as money market deposit accounts, interest-bearing checking accounts and savings accounts, is equal to the amount payable on demand. The fair value of certificates of deposit including retirement accounts is based on the discounted value of contractual cash flows. The discount rate is equivalent to the rate currently offered by the Bank for deposits of similar size, type and maturity. Accrued interest receivable and payable: For these short-term instruments, the carrying amount is a reasonable estimate of fair value. Federal Home Loan Bank of New York advances: The fair value of borrowings is based on the discounted value of contractual cash flows. The discount rate is equivalent to the rate currently offered by the Federal Home Loan Bank of New York for borrowings of similar maturity and terms. The fair value of commitments to extend credit is estimated based on the amount of unamortized deferred loan commitment fees. The fair value of letters of credit is based on the amount of unearned fees plus the estimated cost to terminate the letters of credit. Fair values of unrecognized financial instruments including commitments to extend credit and the fair value of letters of credit are considered immaterial. The following presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments carried at cost or amortized cost as of September 30, 2018 and September 30, 2017. This table excludes financial instruments for which the carrying amount approximates fair value, which includes cash and cash equivalents, FHLB stock, bank owned life insurance, accrued interest receivable, interest and non-interest bearing demand, savings deposits, and accrued interest payable. For short-term financial assets such as cash and cash equivalents, the carrying amount is a reasonable estimate of fair value due to the relatively short time between the origination of the instrument and its expected realization. For financial liabilities such as interest-bearing demand, NOW, and money market savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. Carrying Fair Fair Value Measurement Placement Amount Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2018 Financial instruments - assets Investment securities held-to-maturity $ 33,645 $ 32,151 $ — $ 32,151 $ — Loans 508,430 505,479 — — 505,479 Financial instruments - liabilities Certificates of deposit 130,343 130,813 — 130,813 — Borrowings 35,524 34,863 — 34,863 — September 30, 2017 Financial instruments - assets Investment securities held-to-maturity $ 51,368 $ 51,241 $ — $ 51,241 $ — Loans 470,693 473,538 — — 473,538 Financial instruments - liabilities Certificates of deposit 128,028 128,750 — 128,750 — Borrowings 31,905 31,865 — 31,865 — |
REGULATORY CAPITAL
REGULATORY CAPITAL | 12 Months Ended |
Sep. 30, 2018 | |
Regulatory Capital Requirements [Abstract] | |
REGULATORY CAPITAL | NOTE S - REGULATORY CAPITAL The Company and Bank are required to maintain minimum amounts of capital to total “risk-weighted” assets, as defined by the banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Bank’s assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. The federal banking agencies have substantially amended the regulatory risk-based capital rules applicable to the Bank. The amendments implemented the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act. The amended rules included new minimum risk-based capital and leverage ratios, which became effective in January 2017, with certain requirements to be phased in beginning in 2018. The rule includes a new common equity Tier 1 capital (“CET1”) to risk-weighted assets ratio of 4.5% of risk-weighted assets, which is in addition to the Tier 1 and Total risk-based capital requirements. The interim final rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% and requires a minimum leverage ratio of 4.0%. The required minimum ratio of total capital to risk-weighted assets will remain 8.0%. The new risk-based capital requirements (except for the capital conservation buffer) became effective for the Company and the Bank on January 1, 2015. The amended rules also established a “capital conservation buffer” of 2.5% beginning in January 2016 (phased in over four years at 0.625% per year) above the new regulatory minimum capital ratios, and would result in the following phased-in minimum ratios when fully implemented: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement phased in at 0.625% of risk-weighted assets and will increase each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that could be utilized for such actions. As of September 30, 2018, the most recent notification from the Federal Deposit Insurance Corporation 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 Bank’s category. The following table sets forth the Company’s and the Bank’s actual and required capital levels under those measures: To be well- capitalized under Required for capital prompt corrective At September 30, 2018 adequacy purposes effective action provisions Company Bank September 30, 2018 January 1, 2019 Bank Tier 1 leverage ratio 8.55% 8.61% ≥ 4.00% ≥ 4.00% ≥ 5.00% CET1 11.44% 11.53% ≥ 6.375% (1) ≥ 7.00% (2) ≥ 6.50% Tier 1 risk-based capital ratio 11.44% 11.53% ≥ 7.875% (1) ≥ 8.50% (2) ≥ 8.00% Total risk-based capital ratio 12.35% 12.44% ≥ 9.875% (1) ≥ 10.50% (2) ≥ 10.00% (1) Includes 1.875% capital conservation buffer (2) Includes 2.50% capital conservation buffer To be well- capitalized under Required for capital prompt corrective At September 30, 2017 adequacy purposes effective action provisions Company Bank September 30, 2017 January 1, 2019 Bank Tier 1 leverage ratio 8.45% 8.41% ≥ 4.00% ≥ 4.00% ≥ 5.00% CET1 11.80% 11.75% ≥ 5.75% (3) ≥ 7.00% (4) ≥ 6.50% Tier 1 risk-based capital ratio 11.80% 11.75% ≥ 7.25% (3) ≥ 8.50% (4) ≥ 8.00% Total risk-based capital ratio 12.62% 12.57% ≥ 9.25% (3) ≥ 10.50% (4) ≥ 10.00% (3) Includes 1.25% capital conservation buffer (4) Includes 2.50% capital conservation buffer |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Financial Statement Presentation | 1. Basis of Financial Statement Presentation The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (US GAAP) and predominant practices within the banking industry. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, the Bank, and its wholly-owned subsidiaries MagBank Investment Company, Magyar Service Corporation, and Hungaria Urban Renewal, LLC. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The Company has evaluated subsequent events and transactions occurring subsequent to the consolidated balance sheet date of September 30, 2018, for items that should potentially be recognized or disclosed in these consolidated financial statements. The evaluation was conducted through the date these consolidated financial statements were available to be issued. In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The principal estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses and the deferred tax asset. The evaluation of the adequacy of the allowance for loan losses includes an analysis of the individual loans and overall risk characteristics and size of the different loan portfolios, and takes into consideration current economic and market conditions, the capability of specific borrowers to pay specific loan obligations, as well as current loan collateral values. However, actual losses on specific loans, which also are encompassed in the analysis, may vary from estimated losses. The Company records income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities: (i) are recognized for the expected future tax consequences of events that have been recognized in the financial statements or tax returns; (ii) are attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases; and (iii) are measured using enacted tax rates expected to apply in the years when those temporary differences are expected to be recovered or settled. Where applicable, deferred tax assets are reduced by a valuation allowance for any portions determined not likely to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income tax expense in the period of enactment. The valuation allowance is adjusted, by a charge or credit to income tax expense, as changes in facts and circumstances warrant. |
Cash and Cash Equivalents | 2. Cash and Cash Equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, time deposits with original maturities less than three months and overnight deposits. |
Investment Securities | 3. Investment Securities The Company classifies its investment securities into one of three portfolios: held to maturity, available for sale or trading. Investments in debt securities that the Company has the positive intent and ability to hold to maturity are classified as held to maturity securities and reported at amortized cost. Debt and equity securities that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and reported at fair value, with unrealized holding gains and losses included in earnings. Debt securities not classified as either trading securities or as held to maturity securities are classified as available for sale securities and reported at fair value, with unrealized holding gains or losses, net of deferred income taxes, reported in the accumulated other comprehensive income (“AOCI”) component of stockholders’ equity. Equity securities, with certain exceptions, are measured at fair value with changes in fair value recognized in net income. If the fair value of a security is less than its amortized cost, the security is deemed to be impaired. Management evaluates all securities with unrealized losses quarterly to determine if such impairments are “temporary” or “other-than-temporary” in accordance with applicable accounting guidance. The Company accounts for temporary impairments based upon security classification as either available for sale, held to maturity or trading. Temporary impairments on “available for sale” securities are recognized, on a tax-effected basis, through AOCI with offsetting entries adjusting the carrying value of the security and the balance of deferred taxes. Conversely, the Company does not adjust the carrying value of “held to maturity” securities for temporary impairments, although information concerning the amount and duration of impairments on held to maturity securities is generally disclosed in periodic consolidated financial statements. The carrying value of securities held in a trading portfolio is adjusted to their fair value through earnings on a daily basis. However, the Company maintained no securities in trading portfolios at or during the periods presented in these consolidated financial statements. The Company accounts for other-than-temporary impairments based upon several considerations. First, other-than-temporary impairments on securities that the Company has decided to sell as of the close of a fiscal period, or will, more likely than not, be required to sell prior to the full recovery of the their fair value to a level equal to or exceeding their amortized cost, are recognized in operations. If neither of these criteria apply, then the other-than-temporary impairment is separated into credit-related and noncredit-related components. The credit-related impairment generally represents the amount by which the present value of the cash flows that are expected to be collected on an other-than-temporarily impaired security fall below its amortized cost while the noncredit-related component represents the remaining portion of the impairment not otherwise designated as credit-related. The Company recognizes credit-related, other-than-temporary impairments in earnings, while noncredit-related, other-than-temporary impairments on debt securities are recognized, net of deferred taxes, in AOCI. Federal law requires a member institution of the Federal Home Loan Bank (“FHLB”) system to purchase and hold restricted stock of its district FHLB according to a predetermined formula. This stock is restricted in that it may only be sold to the FHLB and all sales must be at par. Accordingly, the FHLB restricted stock is carried at cost, less any applicable impairment charges. Premiums and discounts on all securities are amortized or accreted to maturity by use of the level-yield method considering the impact of principal amortization and prepayments on mortgage-backed securities. Gain or loss on sales of securities is recognized on the specific identification method. |
Loans and Allowance for Loan Losses | 4. Loans and Allowance for Loan Losses Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, adjusted for net deferred loan fees and costs, and reduced by an allowance for loan losses. Interest on loans is accrued and credited to operations based upon the principal amounts outstanding. The allowance for loan losses is established through a provision for possible loan losses charged to operations. Loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely. Income recognition of interest is discontinued when, in the opinion of management, the collectability of such interest becomes doubtful. A loan is generally classified as non-accrual when the scheduled payment(s) due on the loan is delinquent for more than three months. Loan origination fees and certain direct origination costs are deferred and amortized over the life of the related loans as an adjustment to the yield on loans receivable using the effective interest method. Management uses a ten point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than three months past due are considered Substandard. Any portion of a loan that has been charged off is placed in the Loss category. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Bank’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. The Asset Review Committee performs monthly reviews of all commercial relationships internally rated 6 (“Watch”) or worse. Confirmation of the appropriate risk grade is performed by an external loan review company that semi-annually reviews and assesses loans within the portfolio. Generally, the external consultant reviews commercial relationships greater than $500,000 and/or criticized relationships greater than $250,000. Detailed reviews, including plans for resolution, are performed on loans classified as Substandard on a monthly basis. The allowance for loan losses is maintained at an amount management deems adequate to cover estimated losses. In determining the level to be maintained, management evaluates many factors, including current economic trends, industry experience, historical loss experience, industry loan concentrations, the borrowers’ ability to repay and repayment performance, and estimated collateral values. In the opinion of management, the present allowance is adequate to absorb reasonable, foreseeable loan losses. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary based on changes in economic conditions or any of the other factors used in management’s determination. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for losses on loans. Such agencies may require the Company to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Charge-offs to the allowance are made when the loan is transferred to other real estate owned or other determination of a confirmed loss. Recoveries on loans previously charged off are also recorded through the allowance. A loan is considered impaired when, based upon current information and events, it is probable that a creditor will be unable to collect all amounts due including principal and interest, according to the contractual terms of the loan agreement. The Company measures impaired loans based on the present value of expected future cash flows discounted at the loan’s effective interest rate or as a practical expedient, at the loan’s current observable market price, or the fair value of the collateral if the loan is collateral dependent. The amount by which the recorded investment of an impaired loan exceeds the measurement value is recognized by creating a valuation allowance through a charge to the provision for loan losses. Impairment criteria generally do not apply to those smaller-balance homogeneous loans that are collectively evaluated for impairment which, for the Company, includes one- to four-family first mortgage loans and consumer loans, other than those modified in a troubled debt restructuring. The Company records cash receipts on impaired loans that are non-performing as a reduction to principal before applying amounts to interest or late charges unless specifically directed by the Bankruptcy Court to apply payments otherwise. The Company may continue to recognize interest income on impaired loans where there is no confirmed loss. |
Premises and Equipment | 5. Premises and Equipment Premises and equipment are carried at cost less accumulated depreciation, and include capitalized expenditures for new facilities, major betterments and renewals. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method based upon the estimated useful lives of the related assets for financial reporting purposes and using the mandated methods by asset type for income tax purposes. Leasehold improvements are depreciated using the straight-line method based upon the initial term of the lease. The Company accounts for the impairment of long-lived assets in accordance with US GAAP, which requires recognition and measurement for the impairment of long-lived assets to be held and used or to be disposed of by sale. The Company had no impaired long-lived assets at September 30, 2018 and 2017. |
Revenue recognition | 6. Revenue recognition The Company recognizes revenue in the consolidated statements of income as it is earned and when collectability is reasonably assured. The primary source of revenue is interest income from interest earning assets, which is recognized on the accrual basis of accounting using the effective interest method. The recognition of revenues from interest earning assets is based upon formulas from underlying loan agreements, securities contracts, or other similar contracts. Non-interest income is recognized on the accrual basis of accounting as services are provided or as transactions occur. Non-interest income includes earnings on bank-owned life insurance, deposit accounts, merchant services, ATM and debit card fees, mortgage banking activities, and other miscellaneous services and transactions. |
Other Real Estate Owned | 7. Other Real Estate Owned Real estate acquired through foreclosure, or a deed-in-lieu of foreclosure, is recorded at fair value less estimated selling costs at the date of acquisition or transfer, and subsequently at the lower of its net cost or fair value less estimated selling costs. Adjustments to the carrying value at the date of acquisition or transfer are charged to the allowance for loan losses. The carrying value of the individual properties is subsequently adjusted to the extent it exceeds estimated fair value less estimated selling costs, at which time a provision for losses on such real estate is charged to operations. Operating expenses of holding real estate, net of related income, are charged against income as incurred. Gains on sales of real estate are recognized, normally at closing, when down payment and certain other requirements are met; otherwise such gains are deferred and recognized on the installment method of accounting. Losses on the disposition of real estate, including expenses incurred in connection with the disposition, are charged to operations. |
Pension and Postretirement Plans | 8. Pension and Postretirement Plans The Company sponsors qualified defined benefit pension plan and supplemental executive retirement plan (SERP). The qualified defined benefit pension plan is funded with trust assets invested in a diversified portfolio of debt and equity securities. Accounting for pensions and other postretirement benefits involves estimating the cost of benefits to be provided well into the future and attributing that cost over the time period each employee works. This involves extensive use of assumptions about inflation, investment returns, mortality, turnover, and discount rates. Among other factors, changes in interest rates, investment returns and the market value of plan assets can (i) affect the level of plan funding; (ii) cause volatility in the net periodic pension cost; and (iii) increase our future contribution requirements. A significant decrease in investment returns or the market value of plan assets or a significant decrease in interest rates could increase our net periodic pension costs and adversely affect our results of operations. A significant increase in our contribution requirements with respect to our qualified defined benefit pension plan could have an adverse impact on our cash flow. Changes in the key actuarial assumptions would impact net periodic benefit expense and the projected benefit obligation for our defined benefit and other postretirement benefit plan. See Note M, “Pension Plan,” and Note N, “Non-Qualified Compensation Plan” for information on these plans and the assumptions used. |
Income Taxes | 9. Income Taxes The Company and its subsidiaries file consolidated federal and individual state income tax returns. Income taxes are allocated based on the contribution of their respective income or loss to the consolidated income tax return. The Company records income taxes on the basis of reported income using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. To the extent that current available evidence about the future raises doubt about the realization of a deferred tax asset, a valuation allowance is established. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company follows the provisions of Financial Accounting Standards Board Accounting Standards Codification Topic 740, which provides clarification on accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return, and also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. The Company recorded additional tax expense for the year ended September 30, 2018 due to higher income from operations and the write-down of its net deferred tax asset due to the enactment of the Tax Cuts and Jobs Act on December 22, 2017, which lowered the Company’s federal income tax rate from 34% to 21%. The Company recognized additional tax expense in its tax provision for the year ended September 30, 2018 related to adjustment of our net deferred tax asset to reflect the new corporate tax rate. See Note L, “Income Taxes” for information on the Company’s income tax expense and deferred tax asset for the years ended September 30, 2018 and 2017. At September 30, 2018 and 2017, no significant income tax uncertainties have been included in the Company’s Consolidated Balance Sheets. The Company’s policy is to recognize interest and penalties on unrecognized tax benefits in income tax expense in the Consolidated Statements of Operations. No interest and penalties were recorded during the years ended September 30, 2018 and 2017. The tax years subject to examination by the taxing authorities are the years ended September 30, 2013 and forward. |
Advertising Costs | 10. Advertising Costs The Company expenses advertising costs as incurred. |
Earnings Per Share | 11. Earnings Per Share Basic income per share is calculated by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding for the period. The weighted average common shares outstanding include shares held by the Magyar Bancorp, MHC and shares allocated to the Employee Stock Ownership Plan. Diluted income per share is calculated by adjusting the weighted average common shares outstanding to reflect the potential dilution that could occur using the treasury stock method if securities or other contracts to issue common stock, such as stock options and unvested restricted stock, were exercised and converted into common stock. The resulting shares issued would share in the earnings of the Company. Shares issued and shares reacquired during the period are weighted for the portion of the period that they were outstanding. In periods of loss, dilution is not calculated and diluted loss per share is equal to basic loss per share. The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted earnings per share (EPS) calculations. All stock options were anti-dilutive at September 30, 2018 and 2017. For the Years Ended September 30, 2018 2017 Weighted Per Weighted Per average share average share Income shares Amount Income shares Amount (In thousands, except share and per share data) Basic EPS Net income available to common shareholders $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 Effect of dilutive securities Options and grants — — — — — — Diluted EPS Net income available to common shareholders plus assumed conversion $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 |
Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) | 12. Comprehensive Income (Loss) and Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) includes net income as well as certain other items which result in a change to equity during the period. The other items allocated to comprehensive income (loss), as well as the related income tax effects, for the years ended September 30, 2018 and 2017 were as follows: September 30, 2018 2017 Tax Net of Tax Net of Before Tax (Benefit) Tax Before Tax (Benefit) Tax Amount Expense Amount Amount Expense Amount (In thousands) Unrealized holding (losses) gains arising during period on: Available-for-sale investments $ (586 ) $ 161 $ (425 ) $ (218 ) $ 79 $ (139 ) Less reclassification adjustment for: Net unrealized gains on securities reclassified available-for-sale 104 (32 ) 72 — — — Net gains realized on securities available-for-sale (a) (b) (107 ) 33 (74 ) — — — Defined benefit pension plan 202 (57 ) 145 490 (196 ) 294 Other comprehensive income (loss), net $ (387 ) $ 105 $ (282 ) $ 272 $ (117 ) $ 155 (a) Realized gains on securities transactions included in gains on sales of investment securities in the accompanying Consolidated Statements of Operations (b) Tax effect included in income tax expense in the accompanying Consolidated Statements of Operations The components of accumulated other comprehensive loss at September 30, 2018 and 2017 were as follows: September 30, 2018 2017 (In thousands) Available-for-sale investments $ (544 ) $ (106 ) Defined benefit pension plan (930 ) (898 ) Total accumulated other comprehensive loss $ (1,474 ) $ (1,004 ) |
Bank-Owned Life Insurance | 13. Bank-Owned Life Insurance The Company has purchased Bank-Owned Life Insurance policies (“BOLI”). BOLI involves the purchasing of life insurance by the Company on directors and executive officers. The proceeds are used to help defray the costs of non-qualified compensation plans. The Company is the owner and beneficiary of the policies. BOLI is recorded on the Consolidated Balance Sheets at its cash surrender value and changes in the cash surrender value are recorded in other income in the Consolidated Statement of Operations. |
Off-Balance Sheet Credit Related Financial Instruments | 14. Off-Balance Sheet Credit Related Financial Instruments In the ordinary course of business, the Company has entered into commitments to extend credit, including commitments under commercial lines of credit. Such financial instruments are recorded when they are funded. The Company does not engage in the use of derivative financial instruments. See Note Q, “Financial Instruments With Off-Balance Risk”. |
Segment Reporting | 15. Segment Reporting The Company acts as an independent, community, financial services provider, and offers traditional banking and related financial services to individual, business and government customers. The Company offers a full array of commercial and retail financial services, including the taking of time, savings and demand deposits; the making of commercial, consumer and home equity loans; and the provision of other financial services. Management does not separately allocate expenses, including the cost of funding loan demand, between the commercial and retail operations of the Company. As such, discrete financial information is not available and segment reporting would not be meaningful. |
New Accounting Pronouncements | 16. New Accounting Pronouncements In connection with the preparation of quarterly and annual reports in accordance with the Securities and Exchange Commission’s (“SEC”) Securities Exchange Act of 1934, SEC Staff Accounting Bulletin Topic 11.M requires the disclosure of the impact that recently issued accounting standards will have on financial statements when they are adopted in the future. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Topic 606 Revenue Recognition Based on our evaluation under the current guidance, we estimated that substantially all of our interest income and non-interest income will not be impacted by the adoption of ASU 2014-09 because either the revenue from those contracts with customers is covered by other guidance in US GAAP or the revenue recognition outcomes anticipated with the adoption of ASU 2014-09 will likely be similar to our current revenue recognition practices. The Company evaluated certain noninterest revenue streams, including, deposit related fees, service and interchange fees, and merchant income to determine the potential impact of the guidance on the Company’s consolidated financial statements. The Company expects additional financial statement disclosures of non-interest income revenue streams with the adoption of this ASU. In addition, we are reviewing our business processes, systems and controls to support recognition and disclosures under the new standard. The Company is expected to use the modified retrospective method for transition in which the cumulative effect will be recognized at the date of adoption with no restatement of comparative periods presented. The adoption of the ASU is not expected to have a material effect on the Company’s consolidated financial statements. In January 2016, FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01, among other things, (i) requires equity investments, with certain exceptions, to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (iv) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (v) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vi) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or the accompanying notes to the financial statements; and (vii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale. In addition, the amendments in this ASU require an entity to disclose the fair value of its financial instruments using the exit price notion. Exit price is 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. For public entities, the guidance is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. The Company has updated the fair value disclosure on Note R “Fair Value Disclosures” in this report to reflect adoption of this standard, to include using the exit price notion in the fair value disclosure of financial instruments. The Company`s adoption of the ASU did not have a significant impact on the Company's consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses In August 2017, the FASB issued the ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In February 2018, the FASB issued ASU 2018-02, Income Statement- Reporting Comprehensive Income (Topic 220) – Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The Company adopted the provisions of ASU 2018-02 effective September 30, 2018 and elected to record a reclassification adjustment of $188,000 from AOCI to retained earnings in the consolidated statements of stockholders’ equity for stranded tax effects resulting from enactment of the Tax Act. |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of reconciliation of the numerators and denominators of basic and diluted earnings per share | The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted earnings per share (EPS) calculations. All stock options were anti-dilutive at September 30, 2018 and 2017. For the Years Ended September 30, 2018 2017 Weighted Per Weighted Per average share average share Income shares Amount Income shares Amount (In thousands, except share and per share data) Basic EPS Net income available to common shareholders $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 Effect of dilutive securities Options and grants — — — — — — Diluted EPS Net income available to common shareholders plus assumed conversion $ 2,030 5,820,746 $ 0.35 $ 1,423 5,820,746 $ 0.24 |
Schedule of other items allocated to comprehensive income (loss) | Comprehensive income (loss) includes net income as well as certain other items which result in a change to equity during the period. The other items allocated to comprehensive income (loss), as well as the related income tax effects, for the years ended September 30, 2018 and 2017 were as follows: September 30, 2018 2017 Tax Net of Tax Net of Before Tax (Benefit) Tax Before Tax (Benefit) Tax Amount Expense Amount Amount Expense Amount (In thousands) Unrealized holding (losses) gains arising during period on: Available-for-sale investments $ (586 ) $ 161 $ (425 ) $ (218 ) $ 79 $ (139 ) Less reclassification adjustment for: Net unrealized gains on securities reclassified available-for-sale 104 (32 ) 72 — — — Net gains realized on securities available-for-sale (a) (b) (107 ) 33 (74 ) — — — Defined benefit pension plan 202 (57 ) 145 490 (196 ) 294 Other comprehensive income (loss), net $ (387 ) $ 105 $ (282 ) $ 272 $ (117 ) $ 155 (a) Realized gains on securities transactions included in gains on sales of investment securities in the accompanying Consolidated Statements of Operations (b) Tax effect included in income tax expense in the accompanying Consolidated Statements of Operations |
Schedule of components of accumulated other comprehensive loss | The components of accumulated other comprehensive loss at September 30, 2018 and 2017 were as follows: September 30, 2018 2017 (In thousands) Available-for-sale investments $ (544 ) $ (106 ) Defined benefit pension plan (930 ) (898 ) Total accumulated other comprehensive loss $ (1,474 ) $ (1,004 ) |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Share-based Compensation [Abstract] | |
Schedule of entity's stock option activity and related information | The following is a summary of the status of the Company’s stock option activity and related information for its option plan for the year ended September 30, 2017 and 2018. Weighted Weighted Average Aggregate Number of Average Remaining Intrinsic Stock Options Exercise Price Contractual Life Value Balance at September 30, 2016 188,276 $ 14.61 0.4 years $ — Granted — — Exercised — — Forfeited — — Expired (188,276 ) 14.61 Balance at September 30, 2017 — $ — $ — $ — Granted — — Exercised — — Forfeited — — Expired — — Balance at September 30, 2018 — $ — $ — $ — Exercisable at September 30, 2018 — $ — $ — $ — |
Schedule of the components of the ESOP shares | The following table presents the components of the ESOP shares as of September 30, 2018: Unreleased shares at September 30, 2017 52,092 Shares released for allocation during the year ended September 30, 2018 (12,445 ) Unreleased shares at September 30, 2018 39,647 Total released shares 178,216 Total ESOP shares 217,863 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule amortized cost, gross unrealized gians or losses and fair values of investment securities available for sale and held to maturity | The amortized cost, gross unrealized gains or losses and fair value of the Company’s investment securities available-for-sale and held-to-maturity are as follows: September 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available-for-sale: Obligations of U.S. government agencies: Mortgage backed securities - residential $ 1,463 $ 40 $ (8 ) $ 1,495 Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential 19,262 13 (662 ) 18,613 Debt securities 2,500 — (139 ) 2,361 Total securities available for sale $ 23,225 $ 53 $ (809 ) $ 22,469 September 30, 2018 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities held-to-maturity: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 568 $ — $ (93 ) $ 475 Mortgage-backed securities - commercial 904 — (9 ) 895 Obligations of U.S. government-sponsored enterprises: Mortgage backed securities - residential 26,316 4 (867 ) 25,453 Debt securities 2,464 — (142 ) 2,322 Private label mortgage-backed securities - residential 393 1 — 394 Corporate securities 3,000 — (388 ) 2,612 Total securities held to maturity $ 33,645 $ 5 $ (1,499 ) $ 32,151 At September 30, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities available-for-sale: Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential $ 9,442 $ 9 $ (125 ) $ 9,326 Debt securities 2,500 — (51 ) 2,449 Private label mortgage-backed securities-residential 40 — — 40 Total securities available-for-sale $ 11,982 $ 9 $ (176 ) $ 11,815 At September 30, 2017 Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value (In thousands) Securities held-to-maturity: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 3,466 $ 123 $ (96 ) $ 3,493 Mortgage-backed securities - commercial 968 — (10 ) 958 Obligations of U.S. government-sponsored enterprises: Mortgage backed securities - residential 39,016 349 (251 ) 39,114 Debt securities 4,461 — (24 ) 4,437 Private label mortgage-backed securities - residential 457 — (2 ) 455 Corporate securities 3,000 — (216 ) 2,784 Total securities held-to-maturity $ 51,368 $ 472 $ (599 ) $ 51,241 |
Schedule of maturities of the debt securities and mortgage-backed securities available-for-sale and held to maturity | The amortized cost and fair value of the Company’s securities available-for-sale at September 30, 2018 are summarized in the following table: September 30, 2018 (In thousands) Amortized Fair Cost Value Due within 1 year $ — $ — Due after 1 but within 5 years 1,500 1,411 Due after 5 but within 10 years 1,000 950 Due after 10 years — — Total debt securities 2,500 2,361 Mortgage-backed securities: Residential (1) 20,725 20,108 Commercial — — Total $ 23,225 $ 22,469 (1) Available-for-sale mortgage-backed securities – residential include an amortized cost of $1.5 million and a fair value of $1.5 million for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $19.3 million and a fair value of $18.6 million. There were no residential mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises. The maturities of the debt securities and the mortgage-backed securities held to maturity at September 30, 2018 are summarized in the following table: September 30, 2018 Amortized Fair Cost Value (In thousands) Due within 1 year $ — $ — Due after 1 but within 5 years 1,499 1,446 Due after 5 but within 10 years 3,000 2,612 Due after 10 years 965 876 Total debt securities 5,464 4,934 Mortgage backed securities: Residential (1) 27,277 26,322 Commercial (2) 904 895 Total $ 33,645 $ 32,151 (1) Held-to-maturity mortgage-backed securities – residential include an amortized cost of $568,000 and a fair value of $475,000 for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $26.3 million and a fair value of $25.5 million. Also included are mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises with an amortized cost of $393,000 and a fair value of $394,000. (2) Held-to-maturity mortgage-backed securities – commercial include an amortized cost of $904,000 and a fair value of $895,000 for obligations of U.S. government agencies issued by the Small Business Administration. |
Schedule of securities with unrealized losses | Details of securities with unrealized losses at September 30, 2018 and 2017 are as follows: September 30, 2018 Less Than 12 Months 12 Months Or Greater Total Number of Fair Unrealized Fair Unrealized Fair Unrealized Securities Value Losses Value Losses Value Losses (Dollars in thousands) Obligations of U.S. government agencies: Mortgage-backed securities - residential 3 $ 532 $ (8 ) $ 475 $ (93 ) $ 1,007 $ (101 ) Mortgage-backed securities - commercial 1 — — 895 (9 ) 895 (9 ) Obligations of U.S. government-sponsored enterprises Mortgage-backed securities - residential 34 11,336 (312 ) 30,605 (1,217 ) 41,941 (1,529 ) Debt securities 4 — — 4,683 (281 ) 4,683 (281 ) Private label mortgage-backed securities residential 1 — — 104 — 104 — Corporate securities 1 — — 2,612 (388 ) 2,612 (388 ) Total 44 $ 11,868 $ (320 ) $ 39,374 $ (1,988 ) $ 51,242 $ (2,308 ) September 30, 2017 Less Than 12 Months 12 Months Or Greater Total Number of Fair Unrealized Fair Unrealized Fair Unrealized Securities Value Losses Value Losses Value Losses (Dollars in thousands) Obligations of U.S. government agencies: Mortgage-backed securities- residential 2 $ — $ — $ 605 $ (96 ) $ 605 $ (96 ) Mortgage-backed securities - commercial 1 958 (10 ) — — 958 (10 ) Obligations of U.S. government-sponsored enterprises Mortgage backed securities- residential 20 6,582 (92 ) 21,713 (284 ) 28,295 (376 ) Debt securities 5 4,890 (71 ) 1,996 (4 ) 6,886 (75 ) Private label mortgage-backed securities- residential 2 — — 193 (2 ) 193 (2 ) Corporate securities 1 — — 2,784 (216 ) 2,784 (216 ) Total 31 $ 12,430 $ (173 ) $ 27,291 $ (602 ) $ 39,721 $ (775 ) |
LOANS RECEIVABLE, NET (Tables)
LOANS RECEIVABLE, NET (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Loans Receivable, Net [Abstract] | |
Schedule of net Loans | Loans receivable are comprised of the following: September 30, September 30, 2018 2017 (In thousands) One-to four-family residential $ 185,287 $ 178,336 Commercial real estate 219,347 207,118 Construction 30,412 22,622 Home equity lines of credit 17,982 18,536 Commercial business 53,320 41,113 Other 6,150 6,266 Total loans receivable 512,498 473,991 Net deferred loan costs 132 177 Allowance for loan losses (4,200 ) (3,475 ) Total loans receivable, net $ 508,430 $ 470,693 |
Schedule of impaired loans | The following tables present impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not necessary for the periods presented: Impaired Loans Impaired Loans with with No Specific Specific Allowance Allowance Total Impaired Loans Unpaid At and for the year ended Recorded Related Recorded Recorded Principal September 30, 2018 Investment Allowance Investment Investment Balance (In thousands) One-to four-family residential $ — $ — $ 1,132 $ 1,132 $ 1,132 Commercial real estate — — 3,961 3,961 3,961 Home equity lines of credit — — 58 58 58 Commercial business — — 710 710 801 Total impaired loans $ — $ — $ 5,861 $ 5,861 $ 5,952 Impaired Loans Impaired Loans with with No Specific Specific Allowance Allowance Total Impaired Loans Unpaid At and for the year ended Recorded Related Recorded Recorded Principal September 30, 2017 Investment Allowance Investment Investment Balance (In thousands) One-to four-family residential $ — $ — $ 3,124 $ 3,124 $ 3,436 Commercial real estate — — 4,088 4,088 4,110 Commercial business — — 243 243 243 Total impaired loans $ — $ — $ 7,455 $ 7,455 $ 7,789 |
Schedule of loan portfolio summarized by Bank's internal risk rating system | The following tables present the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful within the Bank’s internal risk rating system for the periods presented: Special Pass Mention Substandard Doubtful Total (In thousands) September 30, 2018 One-to four-family residential $ 185,118 $ — $ 169 $ — $ 185,287 Commercial real estate 217,935 753 659 — 219,347 Construction 30,412 — — — 30,412 Home equity lines of credit 17,924 — 58 — 17,982 Commercial business 52,845 — 475 — 53,320 Other 6,150 — — — 6,150 Total $ 510,384 $ 753 $ 1,361 $ — $ 512,498 Special Pass Mention Substandard Doubtful Total (In thousands) September 30, 2017 One-to four-family residential $ 176,285 $ 127 $ 1,924 $ — $ 178,336 Commercial real estate 204,435 — 2,683 — 207,118 Construction 20,194 — 2,428 — 22,622 Home equity lines of credit 18,536 — — — 18,536 Commercial business 40,820 293 — — 41,113 Other 6,266 — — — 6,266 Total $ 466,536 $ 420 $ 7,035 $ — $ 473,991 |
Schedule of aging analysis of past due loans, segregated by class of loans | The following tables present the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans for the periods presented: 30-59 60-89 Days Days 90 Days + Total Non- Total Current Past Due Past Due Past Due Past Due Accrual Loans (In thousands) September 30, 2018 One-to four-family residential $ 185,132 $ 17 $ — $ 138 $ 155 $ 138 $ 185,287 Commercial real estate 218,892 — — 455 455 455 219,347 Construction 30,412 — — — — — 30,412 Home equity lines of credit 17,892 — — 90 90 90 17,982 Commercial business 52,845 252 — 223 475 223 53,320 Other 6,150 — — — — — 6,150 Total $ 511,323 $ 269 $ — $ 906 $ 1,175 $ 906 $ 512,498 30-59 60-89 Days Days 90 Days + Total Non- Total Current Past Due Past Due Past Due Past Due Accrual Loans (In thousands) September 30, 2017 One-to four-family residential $ 176,546 $ — $ 127 $ 1,663 $ 1,790 $ 1,663 $ 178,336 Commercial real estate 206,218 418 — 482 900 482 207,118 Construction 22,622 — — — — — 22,622 Home equity lines of credit 18,344 — 192 — 192 — 18,536 Commercial business 40,420 400 80 213 693 213 41,113 Other 6,266 — — — — — 6,266 Total $ 470,416 $ 818 $ 399 $ 2,358 $ 3,575 $ 2,358 $ 473,991 |
Schedule of activity in the allowance for loan losses by portfolio segment | The following tables summarize the activity in the allowance for loan losses by loan category for the years ended September 30, 2018 and 2017: One-to Four- Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Balance-September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 Charge-offs (213 ) — — — (170 ) (3 ) — (386 ) Recoveries 87 23 3 — 1 — — 114 Provision 226 240 — 52 364 22 93 997 Balance-September 30, 2018 $ 687 $ 1,540 $ 493 $ 109 $ 1,151 $ 25 $ 195 $ 4,200 One-to Four- Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Balance-September 30, 2016 $ 542 $ 1,075 $ 361 $ 71 $ 976 $ 9 $ 22 $ 3,056 Charge-offs (295 ) (23 ) — — (672 ) — — (990 ) Recoveries 36 — 12 14 4 — — 66 Provision 304 225 117 (28 ) 648 (3 ) 80 1,343 Balance-September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 The following tables summarize the ALL by loan category, segregated into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment as of September 30, 2018 and September 30, 2017: One-to-Four Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Allowance for Loan Losses: Balance - September 30, 2018 $ 687 $ 1,540 $ 493 $ 109 $ 1,151 $ 25 $ 195 $ 4,200 Individually evaluated for impairment — — — — — — — — Collectively evaluated for impairment 687 1,540 493 109 1,151 25 195 4,200 Loans receivable: Balance - September 30, 2018 $ 185,287 $ 219,347 $ 30,412 $ 17,982 $ 53,320 $ 6,150 $ — $ 512,498 Individually evaluated for impairment 1,132 3,961 — 58 710 — — 5,861 Collectively evaluated for impairment 184,155 215,386 30,412 17,924 52,610 6,150 — 506,637 One-to- Four Home Equity Family Commercial Lines of Commercial Residential Real Estate Construction Credit Business Other Unallocated Total (In thousands) Allowance for Loan Losses: Balance - September 30, 2017 $ 587 $ 1,277 $ 490 $ 57 $ 956 $ 6 $ 102 $ 3,475 Individually evaluated for impairment — — — — — — — — Collectively evaluated for impairment 587 1,277 490 57 956 6 102 3,475 Loans receivable: Balance - September 30, 2017 $ 178,336 $ 207,118 $ 22,622 $ 18,536 $ 41,113 $ 6,266 $ — $ 473,991 Individually evaluated for impairment 3,124 4,088 — — 243 — — 7,455 Collectively evaluated for impairment 175,212 203,030 22,622 18,536 40,870 6,266 — 466,536 |
Schedule of troubled debt restructurings | There was one TDR during the year ended September , 2017, and there were no TDRs during the year ended September 30, 2018. The following table summarizes the TDRs during the year ended , 2017: Year Ended September 30, 2017 Number of Investment Before Investment After Loans TDR Modification TDR Modification (Dollars in thousands) One-to four-family residential 1 $ 182 $ 182 Total 1 $ 182 $ 182 |
ACCRUED INTEREST RECEIVABLE (Ta
ACCRUED INTEREST RECEIVABLE (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Interest Receivable and Other Assets [Abstract] | |
ACCRUED INTEREST RECEIVABLE | The following is a summary of accrued interest receivable: September 30, 2018 2017 (In thousands) Loans $ 2,026 $ 1,767 Investment securities 59 57 Mortgage-backed securities 96 105 Total accrued interest receivable $ 2,181 $ 1,929 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PREMISES AND EQUIPMENT | Premises and equipment consist of the following: Estimated September 30, Useful Lives 2018 2017 (Dollars in thousands) Land Indefinite $ 3,811 $ 3,811 Buildings and improvements 10-40 years 22,514 22,453 Furniture, fixtures and equipment 5-10 years 3,288 3,065 29,613 29,329 Less accumulated depreciation (12,623 ) (11,762 ) Premises and equipment, net $ 16,990 $ 17,567 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Deposits [Abstract] | |
Schedule of deposits by type of account | A summary of deposits by type of account follows: September 30, 2018 2017 (In thousands) Demand accounts $ 104,745 $ 98,728 Savings accounts 81,373 107,362 NOW accounts 46,336 43,556 Money market accounts 167,340 137,527 Certificate of deposit 112,014 108,740 Retirement accounts 18,329 19,288 Total deposits $ 530,137 $ 515,201 |
Schedule of contractual maturities of certificates of deposit | At September 30, 2018, certificates of deposit (including retirement accounts and brokered certificate deposit accounts) have contractual maturities as follows (in thousands): Year Ending September 30, 2019 $ 65,984 2020 39,334 2021 13,979 2022 3,381 2023 and after 7,665 Total $ 130,343 |
BORROWINGS (Tables)
BORROWINGS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of maturities of FHLBNY advances | Long term FHLBNY advances as of September 30, 2018 mature as follows (in thousands): Year Ending September 30, 2019 $ 8,940 2020 10,294 2021 2,500 2022 7,731 2023 3,650 Thereafter 2,409 Total $ 35,524 |
Schedule of short-term arrangements with the FHLBNY | Information concerning short-term borrowings with the FHLBNY is summarized as follows: September 30, 2018 2017 (Dollars in thousands) Balance at end of year $ — $ — Weighted average balance during the year $ 3,418 $ 966 Maximum month-end balance during the year $ 25,175 $ 11,150 Average interest rate during the year 2.16 % 1.00 % |
SERVICING POLICY (Tables)
SERVICING POLICY (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Transfers and Servicing [Abstract] | |
Schedule of activity in mortgage servicing rights | Activity in mortgage servicing rights during the years ended September 30, 2018 and 2017 are summarized as follows: September 30, 2018 2017 (In thousands) Beginning balance $ 69 $ 97 Origination of mortgage servicing rights — — Amortization (24 ) (28 ) Ending balance $ 45 $ 69 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense | The income tax expense is comprised of the following components for the years ended September 30, 2018 and 2017: September 30, 2018 2017 (In thousands) Income tax expense at the statutory federal tax rate of 24% for the year ended September 30, 2018 and 34% for the year ended September 30, 2017 $ 839 $ 822 State tax expense 240 141 Reduction of deferred tax asset from tax legislation 410 — Other (18 ) 31 Income tax expense $ 1,471 $ 994 |
Schedule of reconciliation of income tax at the statutory rate to effective tax rate | A reconciliation of income tax at the statutory tax rate to the effective income tax expense for the years ended September 30, 2018 and 2017 is as follows: September 30, 2018 2017 (In thousands) Income tax expense at statutory rate $ 839 $ 822 Increase (decrease) resulting from: State income taxes, net of federal income tax benefit 244 141 Tax-exempt income, net (70 ) (95 ) Nondeductible expenses 32 4 Employee stock ownership plan 5 7 Increase (decrease) in valuation allowance — 115 Increase due to change in tax law 410 — Other, net 11 — Total income tax expense $ 1,471 $ 994 |
Schedule of major sources of temporary differences and their deferred tax effect | The major sources of temporary differences and their deferred tax effect at September 30, 2018 and 2017 are as follows: September 30, 2018 2017 (In thousands) Allowance for loan losses $ 1,181 $ 1,388 Deferred loan fees — 1 Net operating losses — 431 Alternative minimum tax credit — 311 Unrealized loss, minimum pension liability 363 597 Net unrealized loss, investment securities available-for-sale 213 61 OREO 410 382 Straight line rent 125 177 Gross deferred tax asset 2,292 3,348 Depreciation (964 ) (1,370 ) Discount accretion on investments (87 ) (119 ) Employee benefits (66 ) (39 ) Deferred loan fees (19 ) — Mortgage servicing rights (13 ) (28 ) Gross deferred tax liability (1,149 ) (1,556 ) Net deferred tax asset, included in other assets $ 1,143 $ 1,792 |
PENSION PLAN (Tables)
PENSION PLAN (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Schedule of plan's funded status and amounts recognized | The following table sets forth the Plan’s funded status and amounts recognized in the Company’s Consolidated Balance Sheets at September 30, 2018 and September 30, 2017. September 30, 2018 2017 (In thousands) Actuarial present value of benefit obligations $ 4,390 $ 4,550 Change in benefit obligations Projected benefit obligation, beginning $ 4,550 $ 4,779 Interest cost 178 175 Actuarial (gain) loss (149 ) (214 ) Annuity payments and lump sum distributions (189 ) (190 ) Projected benefit obligation, end $ 4,390 $ 4,550 Change in plan assets Fair value of assets, beginning $ 3,237 $ 2,951 Actual return on plan assets 155 312 Employer contributions 200 164 Annuity payments and lump sum distributions (189 ) (190 ) Fair value of assets, end $ 3,403 $ 3,237 Funded status included with other liabilities $ (987 ) $ (1,313 ) |
Schedule of net pension costs | Net pension cost for the years ended September 30, 2018 and 2017 included the following components: September 30, 2018 2017 (In thousands) Service cost benefits earned during the year $ — $ — Interest cost on projected benefit obligation 178 175 Expected return on plan assets (222 ) (202 ) Amortization of unrecognized net loss 119 166 Net pension cost $ 75 $ 139 |
Schedule of weighted-average asset allocations by asset category | The Plan’s weighted-average asset allocations at September 30, 2018 and 2017, by asset category are as follows: September 30, 2018 2017 Equity securities 64 % 68 % Debt securities (bond mutual funds) 36 % 32 % Other (money market fund) 0 % 0 % Total 100 % 100 % |
Schedule of expected benefit payments | The following benefit payments are expected to be paid as follows (in thousands): October 1, 2018 through September 30, 2019 $ 207 October 1, 2019 through September 30, 2020 210 October 1, 2020 through September 30, 2021 211 October 1, 2021 through September 30, 2022 211 October 1, 2022 through September 30, 2023 215 October 1, 2023 through September 30, 2028 1,247 Total $ 2,301 |
Schedule of plan assets that are measured at fair value | The following table presents the Plan assets that are measured at fair value on a recurring basis by level within the fair value hierarchy under ASC Topic 820. Financial assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. See Note R for further detail regarding fair value hierarchy. Fair Value Measurements at Reporting Date Using: Quoted Prices Significant in Active Markets Other Significant for Identical Observable Unobservable Total Assets (Level 1) Inputs (Level 2) Inputs (Level 3) (In thousands) At September 30, 2018 Investment Type Mutual Funds- Equity Large-Cap Value $ 468 $ 468 $ — $ — Large-Cap Core 480 480 — — Mid-Cap Core 198 198 — — Small-Cap Core 201 201 — — Non-U.S. Core 815 815 — — Mutual Funds- Fixed Income Intermediate-Term Core 1,241 1,241 — — Cash Equivalents Money Market — — — — Total Investment $ 3,403 $ 3,403 $ — $ — Fair Value Measurements at Reporting Date Using: Quoted Prices Significant in Active Markets Other Significant for Identical Observable Unobservable Total Assets (Level 1) Inputs (Level 2) Inputs (Level 3) (In thousands) At September 30, 2017 Investment Type Mutual Funds- Equity Large-Cap Value $ 462 $ 462 $ — $ — Large-Cap Core 482 482 — — Mid-Cap Core 224 224 — — Small-Cap Core 222 222 — — Non-U.S. Core 803 803 — — Mutual Funds- Fixed Income Intermediate-Term Core 1,033 1,033 — — Cash Equivalents Money Market 11 11 — — Total Investment $ 3,237 $ 3,237 $ — $ — |
COMMITMENTS (Tables)
COMMITMENTS (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments Tables | |
Schedule of future minimum payments of operating leases | Approximate future minimum payments under non-cancelable operating leases are due as follows for the years indicated (in thousands): September 30, 2019 $ 696 September 30, 2020 700 September 30, 2021 705 September 30, 2022 595 September 30, 2023 602 Thereafter 2,130 Total $ 5,428 |
FINANCIAL INSTRUMENTS WITH OF_2
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK [Abstract] | |
Schedule of fair value, off-balance sheet financial instruments | These commitments were comprised of fixed and variable rate loans. September 30, 2018 2017 (In thousands) Financial instruments whose contract amounts represent credit risk Letters of credit $ 1,939 $ 633 Unused lines of credit 54,127 64,220 Fixed rate loan commitments 4,397 2,429 Variable rate loan commitments 12,523 3,952 Total $ 72,986 $ 71,234 |
FAIR VALUE DISCLOSURES (Tables)
FAIR VALUE DISCLOSURES (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | The following table provides the level of valuation assumptions used to determine the carrying value of the Company’s assets measured at fair value on a recurring basis at September 30, 2018 and 2017: Fair Value at September 30, 2018 Total Level 1 Level 2 Level 3 (In thousands) Securities available for sale: Obligations of U.S. government agencies: Mortgage-backed securities - residential $ 1,495 $ — $ 1,495 $ — Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential 18,613 — 18,613 — Debt securities 2,361 — 2,361 — Total securities available for sale $ 22,469 $ — $ 22,469 $ — Fair Value at September 30, 2017 Total Level 1 Level 2 Level 3 (In thousands) Securities available for sale: Obligations of U.S. government-sponsored enterprises: Mortgage-backed securities-residential $ 9,326 $ — $ 9,326 $ — Debt securities 2,449 — 2,449 — Private label mortgage-backed securities-residential 40 — 40 — Total securities available for sale $ 11,815 $ — $ 11,815 $ — |
Schedule of assets measured at fair value on a non-recurring basis | The following tables provide the level of valuation assumptions used to determine the carrying value of our assets measured at fair value on a non-recurring basis at September 30, 2018 and 2017: Fair Value at September 30, 2018 Total Level 1 Level 2 Level 3 (In thousands) Impaired loans $ 464 $ — $ — $ 464 Other real estate owned 8,586 — — 8,586 Total $ 9,050 $ — $ — $ 9,050 Fair Value at September 30, 2017 Total Level 1 Level 2 Level 3 (In thousands) Impaired loans $ 909 $ — $ — $ 909 Other real estate owned 11,056 — — 11,056 Total $ 11,965 $ — $ — $ 11,965 |
Schedule of quantitative information about assets measured at fair value on a nonrecurring bassis for which Level 3 inputs were used to determine fair value | The following table presents additional quantitative information about assets measured at fair value on a nonrecurring basis and for which Company has utilized Level 3 inputs to determine fair value: Quantitative Information about Level 3 Fair Value Measurements (Dollars in thousands) Fair Value Valuation September 30, 2018 Estimate Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 464 Appraisal of collateral (1) Appraisal adjustments (2) -10.2% to -32.0% (-21.3%) Other real estate owned $ 8,586 Appraisal of collateral (1) Liquidation expenses (2) -5.6% to -48.5% (-15.4%) Quantitative Information about Level 3 Fair Value Measurements (Dollars in thousands) Fair Value Valuation September 30, 2017 Estimate Techniques Unobservable Input Range (Weighted Average) Impaired loans $ 909 Appraisal of collateral (1) Appraisal adjustments (2) -7.9% to -35.2% (-22.3%) Other real estate owned $ 11,056 Appraisal of collateral (1) Liquidation expenses (2) -8.0% to -55.4% (-25.0%) (1) Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable. (2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. |
Schedule of the carrying amount, fair value, and placement in the fair value hierarchy of financial instruments carried at cost or amortized cost | For financial liabilities such as interest-bearing demand, NOW, and money market savings deposits, the carrying amount is a reasonable estimate of fair value due to these products having no stated maturity. Carrying Fair Fair Value Measurement Placement Amount Value (Level 1) (Level 2) (Level 3) (In thousands) September 30, 2018 Financial instruments - assets Investment securities held-to-maturity $ 33,645 $ 32,151 $ — $ 32,151 $ — Loans 508,430 505,479 — — 505,479 Financial instruments - liabilities Certificates of deposit 130,343 130,813 — 130,813 — Borrowings 35,524 34,863 — 34,863 — September 30, 2017 Financial instruments - assets Investment securities held-to-maturity $ 51,368 $ 51,241 $ — $ 51,241 $ — Loans 470,693 473,538 — — 473,538 Financial instruments - liabilities Certificates of deposit 128,028 128,750 — 128,750 — Borrowings 31,905 31,865 — 31,865 — |
REGULATORY CAPITAL (Tables)
REGULATORY CAPITAL (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Regulatory Capital Requirements [Abstract] | |
Schedule of regulatory capital compliance | The following table sets forth the Company’s and the Bank’s actual and required capital levels under those measures: To be well- capitalized under Required for capital prompt corrective At September 30, 2018 adequacy purposes effective action provisions Company Bank September 30, 2018 January 1, 2019 Bank Tier 1 leverage ratio 8.55% 8.61% ≥ 4.00% ≥ 4.00% ≥ 5.00% CET1 11.44% 11.53% ≥ 6.375% (1) ≥ 7.00% (2) ≥ 6.50% Tier 1 risk-based capital ratio 11.44% 11.53% ≥ 7.875% (1) ≥ 8.50% (2) ≥ 8.00% Total risk-based capital ratio 12.35% 12.44% ≥ 9.875% (1) ≥ 10.50% (2) ≥ 10.00% (1) Includes 1.875% capital conservation buffer (2) Includes 2.50% capital conservation buffer To be well- capitalized under Required for capital prompt corrective At September 30, 2017 adequacy purposes effective action provisions Company Bank September 30, 2017 January 1, 2019 Bank Tier 1 leverage ratio 8.45% 8.41% ≥ 4.00% ≥ 4.00% ≥ 5.00% CET1 11.80% 11.75% ≥ 5.75% (3) ≥ 7.00% (4) ≥ 6.50% Tier 1 risk-based capital ratio 11.80% 11.75% ≥ 7.25% (3) ≥ 8.50% (4) ≥ 8.00% Total risk-based capital ratio 12.62% 12.57% ≥ 9.25% (3) ≥ 10.50% (4) ≥ 10.00% (3) Includes 1.25% capital conservation buffer (4) Includes 2.50% capital conservation buffer |
ORGANIZATION (Details)
ORGANIZATION (Details) - shares | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Common stock, shares outstanding | 5,820,746 | 5,820,746 | 5,820,746 |
Treasury stock, shares | 102,996 | 102,996 | |
Magyar Bancorp, MHC [Member] | |||
Ownership of subsidiaries | 100.00% | ||
Ownership of Maygar Bancorp, Inc. (percentage) | 54.00% | ||
Common stock, shares outstanding | 3,200,450 | ||
Treasury Stock [Member] | |||
Ownership of Maygar Bancorp, Inc. (percentage) | 1.80% | ||
Treasury stock, shares | 102,996 | ||
Hungaria Urban Renewal [Member] | |||
Ownership of subsidiaries | 100.00% | ||
Magyar Bank [Member] | |||
Ownership of Maygar Bancorp, Inc. (percentage) | 44.20% | ||
Common stock, shares outstanding | 2,620,296 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||
Commercial relationships | $ 500,000 | |
Criticized relationships | $ 250,000 | |
U.S. statutory rate | 24.00% | 34.00% |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Basic EPS | ||
Net income available to common shareholders | $ 2,030 | $ 1,423 |
Weighted average number of common shares outstanding - basic | 5,820,746 | 5,820,746 |
Basic earnings (loss) per share | $ 0.35 | $ 0.24 |
Effect of dilutive securities | ||
Options and grants | ||
Diluted EPS | ||
Net income available to common shareholders plus assumed conversion | $ 2,030 | $ 1,423 |
Weighted average number of common shares and common share equivalents - diluted | 5,820,746 | 5,820,746 |
Diluted earnings (loss) per share | $ 0.35 | $ 0.24 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Other Items Allocated to Comprehensive Income/Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Unrealized holding (losses) gains arising during period on: | |||
Available-for-sale investments before tax | $ (586) | $ (218) | |
Tax benefit (expense) | 161 | 79 | |
Available-for-sale investments after tax | (425) | (139) | |
Less reclassification adjustment for net unrealized gains on securities reclassified available-for-sale before tax | 104 | ||
Tax benefit (expense) | (32) | ||
Less reclassification adjustment for net unrealized gains on securities reclassified available-for-sale after tax | 72 | ||
Less reclassification adjustment for net gains realized on available-for-sale investments before tax | [1],[2] | (107) | |
Tax benefit (expense) | [1],[2] | 33 | |
Less reclassification adjustment for net gains realized on available-for-sale investments after tax | [1],[2] | (74) | |
Defined benefit pension plan before tax | 202 | 490 | |
Tax benefit (expense) | (57) | (196) | |
Defined benefit pension plan after tax | 145 | 294 | |
Other comprehensive loss, net before tax | (387) | 272 | |
Tax benefit (expense), Total | 105 | (117) | |
Other comprehensive gain (loss), net | $ (282) | $ 155 | |
[1] | Realized gains on securities transactions included in gains on sales of investment securities in the accompanying Consolidated Statements of Operations | ||
[2] | Tax effect included in income tax expense in the accompanying Consolidated Statements of Operations |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Schedule of Components of Accumulated Other Comprehensive Loss) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Accounting Policies [Abstract] | ||
Available-for-sale investments | $ (544) | $ (106) |
Defined benefit pension plan | (930) | (898) |
Total accumulated other comprehensive loss | $ (1,474) | $ (1,004) |
STOCK-BASED COMPENSATION (Narra
STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Stock option expenses | $ 0 | $ 0 |
Stock award expenses | 0 | 0 |
Cost of shares repurchased by ESOP trust | $ 2,300 | |
Average cost of shares repurchased (per share) | $ 10.58 | |
Description of loan with respect to employee stock ownership plan | The ESOP trust purchased 217,863 shares of common stock in the open market using proceeds of a loan from the Company. The total cost of shares purchased by the ESOP trust was $2.3 million, reflecting an average cost per share of $10.58. The Bank will make cash contributions to the ESOP on an annual basis sufficient to enable the ESOP to make the required loan payments to the Company. The loan bears a variable interest rate that adjusts annually to Prime Rate (4.50% at January 1, 2018) with principal and interest payable annually in equal installments over thirty years. The loan is secured by shares of the Company's stock. | |
Interest rate of loan with respect to employee stock ownership plan | 4.50% | |
Fair value of unreleased shares | $ 482,000 | |
ESOP compensation expense | $ 157 | $ 154 |
Total ESOP shares | 217,863 | |
Stock Option [Member] | ||
Vesting period | 5 years | |
Expiration period | 10 years |
STOCK-BASED COMPENSATION (Sched
STOCK-BASED COMPENSATION (Schedule of Stock Option Activity And Related Information For Its Option Plan) (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Number of Stock Options | ||
Balance at the beginning of period | 188,276 | 188,276 |
Options granted | ||
Options exercised | ||
Options forfeited | ||
Balance at the end of period | 188,276 | |
Exercisable at the end of period | ||
Options, Weighted Average Exercise Price | ||
Weighted average price at the beginning of period | $ 14.61 | $ 14.61 |
Options granted | ||
Options exercised | ||
Options forfeited | ||
Weighted average price at the end of period | 14.61 | $ 14.61 |
Exercisable at the end of period | ||
Weighted Average Remaining Contractual Life of Stock options outstanding at the beginning of period (in years) | 0 years | 4 months 24 days |
Weighted Average Remaining Contractual Life of Stock options outstanding at the end of period (in years) | 0 years | |
Aggregate Intrinsic Value of Stock options Outstanding at the beginning of period | ||
Aggregate Intrinsic Value of Stock options Outstanding at the end of period | ||
Aggregate Intrinsic Value of Stock options Exercisable at the end of period |
STOCK-BASED COMPENSATION (Sch_2
STOCK-BASED COMPENSATION (Schedule of Components of the ESOP Shares) (Details) | Sep. 30, 2018shares |
Share-based Compensation [Abstract] | |
Unreleased shares, beginning | 52,092 |
Shares released for allocation during the year | (12,445) |
Unreleased shares, ending | 39,647 |
Total released shares | 178,216 |
Total ESOP shares | 217,863 |
INVESTMENT SECURITIES (Narrativ
INVESTMENT SECURITIES (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Investments, Debt and Equity Securities [Abstract] | ||
Securities pledged to secure public deposits, fair value | $ 25,000 | $ 21,800 |
INVESTMENT SECURITIES (Schedule
INVESTMENT SECURITIES (Schedule of the Unamortized Cost, Gross Unrealized Gains or Losses and Fair Value of Investment Securities Available-For-Sale and Held-To-Maturity) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Securities available-for-sale: | ||
Amortized Cost | $ 23,225 | $ 11,982 |
Gross Unrealized Gains | 53 | 9 |
Gross Unrealized Losses | (809) | (176) |
Fair Value | 22,469 | 11,815 |
Securities held-to-maturity: | ||
Amortized Cost | 33,645 | 51,368 |
Gross Unrealized Gains | 5 | 472 |
Gross Unrealized Losses | (1,499) | (599) |
Fair Value | 32,151 | 51,241 |
Obligations of U.S. government agencies Mortgage backed securities - residential [Member] | ||
Securities available-for-sale: | ||
Amortized Cost | 1,463 | |
Gross Unrealized Gains | 40 | |
Gross Unrealized Losses | (8) | |
Fair Value | 1,495 | |
Securities held-to-maturity: | ||
Amortized Cost | 568 | 3,466 |
Gross Unrealized Gains | 123 | |
Gross Unrealized Losses | (93) | (96) |
Fair Value | 475 | 3,493 |
Obligations of U.S. government agencies Mortgage backed securities -commercial [Member] | ||
Securities held-to-maturity: | ||
Amortized Cost | 904 | 968 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (9) | (10) |
Fair Value | 895 | 958 |
Obligations of U.S. government-sponsored enterprises Mortgage backed securities - residential [Member] | ||
Securities available-for-sale: | ||
Amortized Cost | 19,262 | 9,442 |
Gross Unrealized Gains | 13 | 9 |
Gross Unrealized Losses | (662) | (125) |
Fair Value | 18,613 | 9,326 |
Securities held-to-maturity: | ||
Amortized Cost | 26,316 | 39,016 |
Gross Unrealized Gains | 4 | 349 |
Gross Unrealized Losses | (867) | (251) |
Fair Value | 25,453 | 39,114 |
Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Securities available-for-sale: | ||
Amortized Cost | 2,500 | 2,500 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (139) | (51) |
Fair Value | 2,361 | 2,449 |
Securities held-to-maturity: | ||
Amortized Cost | 2,464 | 4,461 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (142) | (24) |
Fair Value | 2,322 | 4,437 |
Private label mortgage-backed securities-residential [Member] | ||
Securities available-for-sale: | ||
Amortized Cost | 40 | |
Gross Unrealized Gains | ||
Gross Unrealized Losses | ||
Fair Value | 40 | |
Securities held-to-maturity: | ||
Amortized Cost | 393 | 457 |
Gross Unrealized Gains | 1 | |
Gross Unrealized Losses | (2) | |
Fair Value | 394 | 455 |
Corporate securities [Member] | ||
Securities held-to-maturity: | ||
Amortized Cost | 3,000 | 3,000 |
Gross Unrealized Gains | ||
Gross Unrealized Losses | (388) | (216) |
Fair Value | $ 2,612 | $ 2,784 |
INVESTMENT SECURITIES (Schedu_2
INVESTMENT SECURITIES (Schedule of Amortized Cost and Fair Value of Securities Available-For-Sale) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | |
Available for Sale Securities, Amortized Cost | |||
Due within 1 year | |||
Due after 1 but within 5 years | 1,500 | ||
Due after 5 but within 10 years | 1,000 | ||
Due after 10 years | |||
Total debt securities | 2,500 | ||
Mortgage Backed Securities, Residential | [1] | 20,725 | |
Mortgage Backed Securities, Commercial | |||
Amortized Cost | 23,225 | $ 11,982 | |
Available for Sale Securities, Fair Value | |||
Due within 1 year | |||
Due after 1 but within 5 years | 1,411 | ||
Due after 5 but within 10 years | 950 | ||
Due after 10 years | |||
Total debt securities | 2,361 | ||
Mortgage Backed Securities, Residential | [1] | 20,108 | |
Mortgage Backed Securities, Commercial | |||
Fair Value | $ 22,469 | $ 11,815 | |
[1] | Available-for-sale mortgage-backed securities residential include an amortized cost of $1.5 million and a fair value of $1.5 million for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $19.3 million and a fair value of $18.6 million. There were no residential mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises. |
INVESTMENT SECURITIES (Schedu_3
INVESTMENT SECURITIES (Schedule of Securities With Unrealized Losses) (Details) $ in Thousands | Sep. 30, 2018USD ($)N | Sep. 30, 2017USD ($)N |
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 44 | 31 |
Less than 12 Months, Fair Value | $ 11,868 | $ 12,430 |
Less than 12 Months, Unrealized Losses | (320) | (173) |
12 Months or Longer, Fair Value | 39,374 | 27,291 |
12 Months or Longer, Unrealized Losses | (1,988) | (602) |
Total, Fair Value | 51,242 | 39,721 |
Total, Unrealized Losses | $ (2,308) | $ (775) |
Obligations of U.S. government agencies Mortgage backed securities - residential [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 3 | 2 |
Less than 12 Months, Fair Value | $ 532 | |
Less than 12 Months, Unrealized Losses | (8) | |
12 Months or Longer, Fair Value | 475 | 605 |
12 Months or Longer, Unrealized Losses | (93) | (96) |
Total, Fair Value | 1,007 | 605 |
Total, Unrealized Losses | $ (101) | $ (96) |
Obligations of U.S. government agencies Mortgage backed securities -commercial [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 1 | 1 |
Less than 12 Months, Fair Value | $ 958 | |
Less than 12 Months, Unrealized Losses | (10) | |
12 Months or Longer, Fair Value | 895 | |
12 Months or Longer, Unrealized Losses | (9) | |
Total, Fair Value | 895 | 958 |
Total, Unrealized Losses | $ (9) | $ (10) |
Obligations of U.S. government-sponsored enterprises Mortgage backed securities - residential [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 34 | 20 |
Less than 12 Months, Fair Value | $ 11,336 | $ 6,582 |
Less than 12 Months, Unrealized Losses | (312) | (92) |
12 Months or Longer, Fair Value | 30,605 | 21,713 |
12 Months or Longer, Unrealized Losses | (1,217) | (284) |
Total, Fair Value | 41,941 | 28,295 |
Total, Unrealized Losses | $ (1,529) | $ (376) |
Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 4 | 5 |
Less than 12 Months, Fair Value | $ 4,890 | |
Less than 12 Months, Unrealized Losses | (71) | |
12 Months or Longer, Fair Value | 4,683 | 1,996 |
12 Months or Longer, Unrealized Losses | (281) | (4) |
Total, Fair Value | 4,683 | 6,886 |
Total, Unrealized Losses | $ (281) | $ (75) |
Private label mortgage-backed securities-residential [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 1 | 2 |
Less than 12 Months, Fair Value | ||
Less than 12 Months, Unrealized Losses | ||
12 Months or Longer, Fair Value | 104 | 193 |
12 Months or Longer, Unrealized Losses | (2) | |
Total, Fair Value | 104 | 193 |
Total, Unrealized Losses | $ (2) | |
Corporate securities [Member] | ||
Available For Sale and Held To Maturity Securities | ||
Number of Securities | N | 1 | 1 |
Less than 12 Months, Fair Value | ||
Less than 12 Months, Unrealized Losses | ||
12 Months or Longer, Fair Value | 2,612 | 2,784 |
12 Months or Longer, Unrealized Losses | (388) | (216) |
Total, Fair Value | 2,612 | 2,784 |
Total, Unrealized Losses | $ (388) | $ (216) |
INVESTMENT SECURITIES (Schedu_4
INVESTMENT SECURITIES (Schedule of Maturities of the Debt Securities and the Mortgage-Backed Securities Held-To-Maturity) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 | |
Held to Maturity Securities, Amortized Cost | |||
Due within 1 year | |||
Due after 1 but within 5 years | 1,499 | ||
Due after 5 but within 10 years | 3,000 | ||
Due after 10 years | 965 | ||
Total debt securities | 5,464 | ||
Mortgage Backed Securities, Residential | [1] | 27,277 | |
Mortgage Backed Securities, Commercial | [2] | 904 | |
Amortized cost | 33,645 | $ 51,368 | |
Held to Maturity Securities, Fair Value | |||
Due within 1 year | |||
Due after 1 but within 5 years | 1,446 | ||
Due after 5 but within 10 years | 2,612 | ||
Due after 10 years | 876 | ||
Total debt securities | 4,934 | ||
Mortgage Backed Securities, Residential | [1] | 26,322 | |
Mortgage Backed Securities, Commercial | [2] | 895 | |
Fair value | $ 32,151 | $ 51,241 | |
[1] | Held-to-maturity mortgage-backed securities - residential include an amortized cost of $568,000 and a fair value of $475,000 for obligations of U.S. government agencies issued by the Government National Mortgage Association and obligations of U.S. government-sponsored enterprises issued by Federal National Mortgage Association and Federal Home Loan Mortgage Corporation which had an amortized cost of $26.3 million and a fair value of $25.5 million. Also included are mortgage backed securities issued by non-U.S. government agencies and government-sponsored enterprises with an amortized cost of $393,000 and a fair value of $394,000. | ||
[2] | Held-to-maturity mortgage-backed securities commercial include an amortized cost of $904,000 and a fair value of $895,000 for obligations of U.S. government agencies issued by the Small Business Administration. |
LOANS RECEIVABLE, NET (Narrativ
LOANS RECEIVABLE, NET (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Loans Receivable, Net [Abstract] | ||
Loans receivable from directors, executives, affiliates | $ 2,800 | $ 2,900 |
Principal Additions - loans receivable-related parties | 137 | |
Principal Repayments - loans receivable-related parties | 231 | 305 |
Value of loans serviced on behalf of others | 41,400 | 38,700 |
Mortgage Servicing Rights | 45 | 69 |
Escrow balance held for loans serviced on behalf of others | 78 | 97 |
Average Recorded Investment | 6,100 | 8,600 |
Interest Income not recognized on non-accrual loans | 40 | 106 |
Interest-only mortgage loans | 6,100 | |
Loans pledged as collateral against Federal Home Loan Bank of New York borrowings | 172,400 | 177,600 |
Troubled Debt Restructurings Loans | 4,700 | |
Delinquent loans | 1,200 | |
Interest income | $ 238 | $ 253 |
LOANS RECEIVABLE, NET (Schedule
LOANS RECEIVABLE, NET (Schedule of Loans Receivable, Net) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | $ 512,498 | $ 473,991 |
Net deferred loan costs | 132 | 177 |
Allowance for loan losses | (4,200) | (3,475) |
Total loans receivable, net | 508,430 | 470,693 |
One-to four-family residential [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 185,287 | 178,336 |
Allowance for loan losses | (687) | (587) |
Commercial real estate [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 219,347 | 207,118 |
Allowance for loan losses | (1,540) | (1,277) |
Construction [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 30,412 | 22,622 |
Allowance for loan losses | (493) | (490) |
Home equity lines of credit [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 17,982 | 18,536 |
Allowance for loan losses | (109) | (57) |
Commercial business [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 53,320 | 41,113 |
Allowance for loan losses | (1,151) | (956) |
Other [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans and Leases Receivable, Gross | 6,150 | 6,266 |
Allowance for loan losses | $ (25) | $ (6) |
LOANS RECEIVABLE, NET (Schedu_2
LOANS RECEIVABLE, NET (Schedule of Impaired Loans by Class) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment With Specific Allowance | ||
Related Allowance | ||
Recorded Investment With No Specific Allowance | 5,861 | 7,455 |
Total Recorded Investment | 5,861 | 7,455 |
Total Unpaid Contractual Principal Balance | 5,952 | 7,789 |
One-to four-family residential [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment With Specific Allowance | ||
Related Allowance | ||
Recorded Investment With No Specific Allowance | 1,132 | 3,124 |
Total Recorded Investment | 1,132 | 3,124 |
Total Unpaid Contractual Principal Balance | 1,132 | 3,436 |
Commercial real estate [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment With Specific Allowance | ||
Related Allowance | ||
Recorded Investment With No Specific Allowance | 3,961 | 4,088 |
Total Recorded Investment | 3,961 | 4,088 |
Total Unpaid Contractual Principal Balance | 3,961 | 4,110 |
Home equity lines of credit [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment With Specific Allowance | ||
Related Allowance | ||
Recorded Investment With No Specific Allowance | 58 | |
Total Recorded Investment | 58 | |
Total Unpaid Contractual Principal Balance | 58 | |
Commercial business [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Recorded Investment With Specific Allowance | ||
Related Allowance | ||
Recorded Investment With No Specific Allowance | 710 | 243 |
Total Recorded Investment | 710 | 243 |
Total Unpaid Contractual Principal Balance | $ 801 | $ 243 |
LOANS RECEIVABLE, NET (Schedu_3
LOANS RECEIVABLE, NET (Schedule of Classes of the Loan Portfolio Summarized by Bank's Internal Risk Rating System) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Loans and Leases Receivable, Gross | $ 512,498 | $ 473,991 |
Pass [Member] | ||
Loans and Leases Receivable, Gross | 510,384 | 466,536 |
Special Mention [Member] | ||
Loans and Leases Receivable, Gross | 753 | 420 |
Substandard [Member] | ||
Loans and Leases Receivable, Gross | 1,361 | 7,035 |
Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Other [Member] | ||
Loans and Leases Receivable, Gross | 6,150 | 6,266 |
Other [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 6,150 | 6,266 |
Other [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | ||
Other [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | ||
Other [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Commercial business [Member] | ||
Loans and Leases Receivable, Gross | 53,320 | 41,113 |
Commercial business [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 52,845 | 40,820 |
Commercial business [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | 293 | |
Commercial business [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | 475 | |
Commercial business [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Home equity lines of credit [Member] | ||
Loans and Leases Receivable, Gross | 17,982 | 18,536 |
Home equity lines of credit [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 17,924 | 18,536 |
Home equity lines of credit [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | ||
Home equity lines of credit [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | 58 | |
Home equity lines of credit [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Construction [Member] | ||
Loans and Leases Receivable, Gross | 30,412 | 22,622 |
Construction [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 30,412 | 20,194 |
Construction [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | ||
Construction [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | 2,428 | |
Construction [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Commercial real estate [Member] | ||
Loans and Leases Receivable, Gross | 219,347 | 207,118 |
Commercial real estate [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 217,935 | 204,435 |
Commercial real estate [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | 753 | |
Commercial real estate [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | 659 | 2,683 |
Commercial real estate [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
One-to four-family residential [Member] | ||
Loans and Leases Receivable, Gross | 185,287 | 178,336 |
One-to four-family residential [Member] | Pass [Member] | ||
Loans and Leases Receivable, Gross | 185,118 | 176,285 |
One-to four-family residential [Member] | Special Mention [Member] | ||
Loans and Leases Receivable, Gross | 127 | |
One-to four-family residential [Member] | Substandard [Member] | ||
Loans and Leases Receivable, Gross | 169 | 1,924 |
One-to four-family residential [Member] | Doubtful [Member] | ||
Loans and Leases Receivable, Gross | ||
Unallocated [Member] | ||
Loans and Leases Receivable, Gross |
LOANS RECEIVABLE, NET (Schedu_4
LOANS RECEIVABLE, NET (Schedule of Classes of the Loan Portfolio Summarized by Aging Categories) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | $ 511,323 | $ 470,416 |
Total Past Due | 1,175 | 3,575 |
Non - Accrual | 906 | 2,358 |
Total loans receivable | 512,498 | 473,991 |
Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 269 | 818 |
Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 399 | |
Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 906 | 2,358 |
One-to four-family residential [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 185,132 | 176,546 |
Total Past Due | 155 | 1,790 |
Non - Accrual | 138 | 1,663 |
Total loans receivable | 185,287 | 178,336 |
One-to four-family residential [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 17 | |
One-to four-family residential [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 127 | |
One-to four-family residential [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 138 | 1,663 |
Commercial real estate [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 218,892 | 206,218 |
Total Past Due | 455 | 900 |
Non - Accrual | 455 | 482 |
Total loans receivable | 219,347 | 207,118 |
Commercial real estate [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 418 | |
Commercial real estate [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Commercial real estate [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 455 | 482 |
Construction [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 30,412 | 22,622 |
Total Past Due | ||
Non - Accrual | ||
Total loans receivable | 30,412 | 22,622 |
Construction [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Construction [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Construction [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Home equity lines of credit [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 17,892 | 18,344 |
Total Past Due | 90 | 192 |
Non - Accrual | 90 | |
Total loans receivable | 17,982 | 18,536 |
Home equity lines of credit [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Home equity lines of credit [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 192 | |
Home equity lines of credit [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 90 | |
Commercial business [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 52,845 | 40,420 |
Total Past Due | 475 | 693 |
Non - Accrual | 223 | 213 |
Total loans receivable | 53,320 | 41,113 |
Commercial business [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 252 | 400 |
Commercial business [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 80 | |
Commercial business [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 223 | 213 |
Other [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 6,150 | 6,266 |
Total Past Due | ||
Non - Accrual | ||
Total loans receivable | 6,150 | 6,266 |
Other [Member] | Financing Receivables, 30 to 59 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Other [Member] | Financing Receivables, 60 to 89 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | ||
Other [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member] | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due |
LOANS RECEIVABLE, NET (Schedu_5
LOANS RECEIVABLE, NET (Schedule of Activity in the Allowance for Loan Losses by Loan Category) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | $ 3,475 | $ 3,056 |
Charge-offs | (386) | (990) |
Recoveries | 114 | 66 |
Provision | 997 | 1,343 |
Balance at the end of period | 4,200 | 3,475 |
One-to four-family residential [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 587 | 542 |
Charge-offs | (213) | (295) |
Recoveries | 87 | 36 |
Provision | 226 | 304 |
Balance at the end of period | 687 | 587 |
Commercial real estate [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 1,277 | 1,075 |
Charge-offs | (23) | |
Recoveries | 23 | |
Provision | 240 | 225 |
Balance at the end of period | 1,540 | 1,277 |
Construction [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 490 | 361 |
Charge-offs | ||
Recoveries | 3 | 12 |
Provision | 117 | |
Balance at the end of period | 493 | 490 |
Home equity lines of credit [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 57 | 71 |
Charge-offs | ||
Recoveries | 14 | |
Provision | 52 | (28) |
Balance at the end of period | 109 | 57 |
Commercial business [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 956 | 976 |
Charge-offs | (170) | (672) |
Recoveries | 1 | 4 |
Provision | 364 | 648 |
Balance at the end of period | 1,151 | 956 |
Other [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 6 | 9 |
Charge-offs | (3) | |
Recoveries | ||
Provision | 22 | (3) |
Balance at the end of period | 25 | 6 |
Unallocated [Member] | ||
Activity in the allowance for loan losses by loan category: | ||
Balance at beginning of period | 102 | 22 |
Charge-offs | ||
Recoveries | ||
Provision | 93 | 80 |
Balance at the end of period | $ 195 | $ 102 |
LOANS RECEIVABLE, NET (Schedu_6
LOANS RECEIVABLE, NET (Schedule of ALL by Loan Category) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | $ 4,200 | $ 3,475 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 4,200 | 3,475 |
Balance - Loans receivable | 512,498 | 473,991 |
Loan balance individually evaluated for impairment | 5,861 | 7,455 |
Loan balance collectively evaluated for impairment | 506,637 | 466,536 |
One-to four-family residential [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 687 | 587 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 687 | 587 |
Balance - Loans receivable | 185,287 | 178,336 |
Loan balance individually evaluated for impairment | 1,132 | 3,124 |
Loan balance collectively evaluated for impairment | 184,155 | 175,212 |
Commercial real estate [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 1,540 | 1,277 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 1,540 | 1,277 |
Balance - Loans receivable | 219,347 | 207,118 |
Loan balance individually evaluated for impairment | 3,961 | 4,088 |
Loan balance collectively evaluated for impairment | 215,386 | 203,030 |
Construction [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 493 | 490 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 493 | 490 |
Balance - Loans receivable | 30,412 | 22,622 |
Loan balance individually evaluated for impairment | ||
Loan balance collectively evaluated for impairment | 30,412 | 22,622 |
Home equity lines of credit [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 109 | 57 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 109 | 57 |
Balance - Loans receivable | 17,982 | 18,536 |
Loan balance individually evaluated for impairment | 58 | |
Loan balance collectively evaluated for impairment | 17,924 | 18,536 |
Commercial business [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 1,151 | 956 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 1,151 | 956 |
Balance - Loans receivable | 53,320 | 41,113 |
Loan balance individually evaluated for impairment | 710 | 243 |
Loan balance collectively evaluated for impairment | 52,610 | 40,870 |
Other [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 25 | 6 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 25 | 6 |
Balance - Loans receivable | 6,150 | 6,266 |
Loan balance individually evaluated for impairment | ||
Loan balance collectively evaluated for impairment | 6,150 | 6,266 |
Unallocated [Member] | ||
Allowance for Loan Losses: | ||
Balance - Allowance for loans losses | 195 | 102 |
Individually evaluated for impairment | ||
Collectively evaluated for impairment | 195 | 102 |
Balance - Loans receivable | ||
Loan balance individually evaluated for impairment | ||
Loan balance collectively evaluated for impairment |
LOANS RECEIVABLE, NET (Schedu_7
LOANS RECEIVABLE, NET (Schedule of Troubled Debt Restructuring) (Details) $ in Thousands | 12 Months Ended |
Sep. 30, 2017USD ($)N | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | 1 |
Investment Before TDR Modification | $ 182 |
Investment After TDR Modification | $ 182 |
One-to four-family residential [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | 1 |
Investment Before TDR Modification | $ 182 |
Investment After TDR Modification | $ 182 |
Commercial real estate [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | |
Investment Before TDR Modification | |
Investment After TDR Modification | |
Construction [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | |
Investment Before TDR Modification | |
Investment After TDR Modification | |
Home equity lines of credit [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | |
Investment Before TDR Modification | |
Investment After TDR Modification | |
Commercial business [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | |
Investment Before TDR Modification | |
Investment After TDR Modification | |
Other [Member] | |
Financing Receivable, Modifications [Line Items] | |
Number of Loans | N | |
Investment Before TDR Modification | |
Investment After TDR Modification |
ACCRUED INTEREST RECEIVABLE (De
ACCRUED INTEREST RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Accrued interest receivable | $ 2,181 | $ 1,929 |
Loans [Member] | ||
Accrued interest receivable | 2,026 | 1,767 |
Investment Securities [Member] | ||
Accrued interest receivable | 59 | 57 |
Mortgage-backed Securities [Member] | ||
Accrued interest receivable | $ 96 | $ 105 |
PREMISES AND EQUIPMENT (Narrati
PREMISES AND EQUIPMENT (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Depreciation expense | $ 861 | $ 816 |
Premises and equipment, net | 16,990 | 17,567 |
Hungaria Urban Renewal [Member] | Land [Member] | ||
Premises and equipment, net | 3,100 | 3,100 |
Hungaria Urban Renewal [Member] | Buildings and Improvements [Member] | ||
Premises and equipment, net | 9,300 | 9,700 |
Hungaria Urban Renewal [Member] | Furniture, Fixtures and Equipment [Member] | ||
Premises and equipment, net | $ 0 | $ 0 |
PREMISES AND EQUIPMENT (Schedul
PREMISES AND EQUIPMENT (Schedule of Premises and Equipment) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property, Plant and Equipment, Gross | $ 29,613 | $ 29,329 |
Less accumulated depreciation | (12,623) | (11,762) |
Premises and equipment, net | 16,990 | 17,567 |
Buildings and Improvements [Member] | ||
Property, Plant and Equipment, Gross | $ 22,514 | 22,453 |
Buildings and Improvements [Member] | Minimum [Member] | ||
Estimated Useful Lives | 10 years | |
Buildings and Improvements [Member] | Maximum [Member] | ||
Estimated Useful Lives | 40 years | |
Furniture, Fixtures and Equipment [Member] | ||
Property, Plant and Equipment, Gross | $ 3,288 | 3,065 |
Furniture, Fixtures and Equipment [Member] | Minimum [Member] | ||
Estimated Useful Lives | 5 years | |
Furniture, Fixtures and Equipment [Member] | Maximum [Member] | ||
Estimated Useful Lives | 10 years | |
Land [Member] | ||
Property, Plant and Equipment, Gross | $ 3,811 | $ 3,811 |
OTHER REAL ESTATE OWNED (Detail
OTHER REAL ESTATE OWNED (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
OTHER REAL ESTATE OWNED [Abstract]. | ||
Other real estate owned ("OREO") | $ 8,586 | $ 11,056 |
Write-downs on other real estate owned | $ 418 | $ 218 |
DEPOSITS (Narrative) (Details)
DEPOSITS (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Deposits [Abstract] | ||
Aggregate of deposit accounts with a minimum denomination of $250,000 | $ 26,660 | $ 227,200 |
Aggregated of certificate deposits with balance greater than $250,000 | $ 35,600 | $ 31,500 |
DEPOSITS (Schedule of Deposits
DEPOSITS (Schedule of Deposits by Type of Account) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Deposits [Abstract] | ||
Demand accounts | $ 104,745 | $ 98,728 |
Savings accounts | 81,373 | 107,362 |
NOW accounts | 46,336 | 43,556 |
Money market accounts | 167,340 | 137,527 |
Certificates of deposit | 112,014 | 108,740 |
Retirement accounts | 18,329 | 19,288 |
Total deposits | $ 530,137 | $ 515,201 |
DEPOSITS (Schedule of Contractu
DEPOSITS (Schedule of Contractual Maturities of Certificate of Deposit) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Year Ending September 30, | |
2,019 | $ 65,984 |
2,020 | 39,334 |
2,021 | 13,979 |
2,022 | 3,381 |
2023 and after | 7,665 |
Total | $ 130,343 |
BORROWINGS (Narrative) (Details
BORROWINGS (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Federal Home Loan Bank of New York Advances [Abstract] | ||
Federal Home Loan Bank of New York advances | $ 35,524 | $ 31,905 |
Weighted average interest rate | 2.09% | 2.00% |
Available credit from FHLBNY | $ 78,700 | $ 92,600 |
BORROWINGS (Schedule of Long Te
BORROWINGS (Schedule of Long Term FHLBNY Advances) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Year Ending September 30, | ||
2,019 | $ 8,940 | |
2,020 | 10,294 | |
2,021 | 2,500 | |
2,022 | 7,731 | |
2,023 | 3,650 | |
Thereafter | 2,409 | |
Total | $ 35,524 | $ 31,905 |
BORROWINGS (Schedule of Short-T
BORROWINGS (Schedule of Short-Term Arrangements With the FHLBNY) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | ||
Balance at end of year | ||
Weighted average balance during the year | 3,418 | 966 |
Maximum month-end balance during the year | $ 25,175 | $ 11,150 |
Average interest rate during the year | 2.16% | 1.00% |
SERVICING POLICY (Narrative) (D
SERVICING POLICY (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | ||
Loans sold with servicing retained | $ 8,700 | $ 4,700 |
Loans sold, servicing released | 0 | 0 |
Value of loans sold still being serviced | 8,500 | 10,100 |
SBA Loans being serviced | $ 26,500 | $ 22,400 |
SERVICING POLICY (Schedule of A
SERVICING POLICY (Schedule of Activity in Mortgage Servicing Rights) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Transfers and Servicing [Abstract] | ||
Mortgage servicing rights, beginning balance | $ 69 | $ 97 |
Origination of mortgage servicing rights | ||
Amortization | (24) | (28) |
Mortgage servicing rights, ending balance | $ 45 | $ 69 |
INCOME TAXES (Narrative) (Detai
INCOME TAXES (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Change in federal corporate tax rate | 21.00% | |
Expenses | $ 410 |
INCOME TAXES (Schedule of Recon
INCOME TAXES (Schedule of Reconciliation of Income Tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal tax rate (as a percent) | 24.00% | 34.00% |
Income tax expense at the statutory federal tax rate of 24% for the year ended September 30, 2018 and 34% for the year ended September 30, 2017 | $ 839 | $ 822 |
State tax expense | 240 | 141 |
Reduction of deferred tax asset from tax legislation | 410 | |
Other | (18) | 31 |
Income tax expense | $ 1,471 | $ 994 |
INCOME TAXES (Schedule of Rec_2
INCOME TAXES (Schedule of Reconciliation of Income Tax) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of income tax | ||
Income tax expense at statutory rate | $ 839 | $ 822 |
Increase (decrease) resulting from: | ||
State income taxes, net of federal income tax benefit | 244 | 141 |
Tax-exempt income, net | (70) | (95) |
Nondeductible expenses | 32 | 4 |
Employee stock ownership plan | 5 | 7 |
Increase (decrease) in valuation allowance | 115 | |
Increase due to change in tax law | 410 | |
Other, net | 11 | |
Income tax expense | $ 1,471 | $ 994 |
INCOME TAXES (Schedule of Major
INCOME TAXES (Schedule of Major Sources of Temporary Differences and Their Deferred Tax Effect) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Temporary Differences and Deferred Tax Effect | ||
Allowance for loan losses | $ 1,181 | $ 1,388 |
Deferred loan fees | 1 | |
Net operating losses | 431 | |
Alternative minimum tax credit | 311 | |
Unrealized loss, minimum pension liability | 363 | 597 |
Net unrealized loss, investment securities available-for-sale | 213 | 61 |
OREO | 410 | 382 |
Straight line rent | 125 | 177 |
Gross deferred tax asset | 2,292 | 3,348 |
Depreciation | (964) | (1,370) |
Discount accretion on investments | (87) | (119) |
Employee benefits | (66) | (39) |
Deferred loan fees | (19) | |
Mortgage servicing rights | (13) | (28) |
Gross deferred tax liability | (1,149) | (1,556) |
Net deferred tax asset, included in other assets | $ 1,143 | $ 1,792 |
PENSION PLAN (Narrative) (Detai
PENSION PLAN (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Long-term investment objective, equities | 65.00% | |
Long-term investment objective, debt | 35.00% | |
Funding guidelines, description | Asset rebalancing is performed at least annually, with interim adjustments made when the investment mix varies more than 5% from the target (i.e., a 10% target range). | |
Weighted average discount rate | 4.25% | 4.00% |
Expected long-term rate of return on assets | 7.00% | 7.00% |
Inflation rate | 2.50% | |
Expected contributions | $ 67 | |
Actuarial losses | 1,292 | $ 1,494 |
Acturial losses, income tax effects | 363 | $ 597 |
Acturial losses expected to be amortized within next year | $ 105 | |
Maximum [Member] | ||
Expected long-term rate of return on assets | 7.00% | |
Minimum [Member] | ||
Expected long-term rate of return on assets | 5.00% | |
Equity Securities [Member] | Maximum [Member] | ||
Expected long-term rate of return on assets | 8.00% | |
Target asset allocation | 70.00% | |
Equity Securities [Member] | Minimum [Member] | ||
Expected long-term rate of return on assets | 6.00% | |
Target asset allocation | 40.00% | |
Fixed Income Securities [Member] | Maximum [Member] | ||
Expected long-term rate of return on assets | 5.00% | |
Fixed Income Securities [Member] | Minimum [Member] | ||
Expected long-term rate of return on assets | 3.00% | |
Debt Securities [Member] | Maximum [Member] | ||
Target asset allocation | 60.00% | |
Debt Securities [Member] | Minimum [Member] | ||
Target asset allocation | 30.00% |
PENSION PLAN (Schedule of Plan'
PENSION PLAN (Schedule of Plan's Funded Status and Amounts Recognized) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Retirement Benefits [Abstract] | |||||
Actuarial present value of benefit obligations | $ 4,550 | $ 4,779 | $ 4,390 | $ 4,550 | |
Change in benefit obligations | |||||
Projected benefit obligation, beginning | 4,550 | 4,779 | |||
Interest cost | 178 | 175 | |||
Actuarial (gain) loss | (149) | (214) | |||
Annuity payments and lump sum distributions | (189) | [1] | (190) | ||
Projected benefit obligation, end | 4,390 | 4,550 | |||
Change in plan assets | |||||
Fair value of assets, beginning | 3,237 | 2,951 | |||
Actual return on plan assets | 155 | 312 | |||
Employer contributions | 200 | 164 | |||
Annuity payments and lump sum distributions | (189) | (190) | |||
Fair value of assets, end | $ 3,403 | $ 3,237 | |||
Funded status included with other liabilities | $ (987) | $ (1,313) | |||
[1] | In January 2018, the Company adopted ASU 2018-02, as a result, the Company made a policy election to release income tax effects, as a result of the Tax Act, from AOCI to retained earnings. |
PENSION PLAN (Schedule of Net P
PENSION PLAN (Schedule of Net Pension Cost) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Retirement Benefits [Abstract] | ||
Service cost benefits earned during the year | ||
Interest cost on projected benefit obligation | 178 | 175 |
Expected return on plan assets | (222) | (202) |
Amortization of unrecognized net loss | 119 | 166 |
Net pension cost | $ 75 | $ 139 |
PENSION PLAN (Schedule of Pensi
PENSION PLAN (Schedule of Pension Plan Weighted-Average Asset Allocations) (Details) | Sep. 30, 2018 | Sep. 30, 2017 |
Weighted average asset allocation (percentage) | 100.00% | 100.00% |
Equity Securities [Member] | ||
Weighted average asset allocation (percentage) | 64.00% | 68.00% |
Debt Securities [Member] | ||
Weighted average asset allocation (percentage) | 36.00% | 32.00% |
Money Market Funds [Member] | ||
Weighted average asset allocation (percentage) | 0.00% | 0.00% |
PENSION PLAN (Schedule of Expec
PENSION PLAN (Schedule of Expected Benefit Payments) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Estimated Future Benefit Payments | |
October 1, 2018 through September 30, 2019 | $ 207 |
October 1, 2019 through September 30, 2020 | 210 |
October 1, 2020 through September 30, 2021 | 211 |
October 1, 2021 through September 30, 2022 | 211 |
October 1, 2022 through September 30, 2023 | 215 |
October 1, 2023 through September 30, 2028 | 1,247 |
Total | $ 2,301 |
PENSION PLAN (Schedule of Fair
PENSION PLAN (Schedule of Fair Value Measurements of Plan Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Investments | $ 3,403 | $ 3,237 |
Large-Cap Value [Member] | ||
Investments | 468 | 462 |
Large-Cap Core [Member] | ||
Investments | 480 | 482 |
Mid-Cap Core [Member] | ||
Investments | 198 | 224 |
Small-Cap Core [Member] | ||
Investments | 201 | 222 |
Non-U.S. Core [Member] | ||
Investments | 201 | 803 |
Intermediate-Term Core [Member] | ||
Investments | 1,241 | 1,033 |
Money Market Funds [Member] | ||
Investments | 11 | |
Fair Value, Inputs, Level 1 [Member] | ||
Investments | 3,403 | 3,237 |
Fair Value, Inputs, Level 1 [Member] | Large-Cap Value [Member] | ||
Investments | 468 | 462 |
Fair Value, Inputs, Level 1 [Member] | Large-Cap Core [Member] | ||
Investments | 480 | 482 |
Fair Value, Inputs, Level 1 [Member] | Mid-Cap Core [Member] | ||
Investments | 198 | 224 |
Fair Value, Inputs, Level 1 [Member] | Small-Cap Core [Member] | ||
Investments | 201 | 222 |
Fair Value, Inputs, Level 1 [Member] | Non-U.S. Core [Member] | ||
Investments | 201 | 803 |
Fair Value, Inputs, Level 1 [Member] | Intermediate-Term Core [Member] | ||
Investments | 1,241 | 1,033 |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | ||
Investments | 11 | |
Fair Value, Inputs, Level 2 [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Large-Cap Value [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Large-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Mid-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Small-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Non-U.S. Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Intermediate-Term Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 2 [Member] | Money Market Funds [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Large-Cap Value [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Large-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Mid-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Small-Cap Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Non-U.S. Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Intermediate-Term Core [Member] | ||
Investments | ||
Fair Value, Inputs, Level 3 [Member] | Money Market Funds [Member] | ||
Investments |
NONQUALIFIED COMPENSATION PLAN
NONQUALIFIED COMPENSATION PLAN (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Postemployment Benefits [Abstract] | ||
Life Insurance Contracts, Value | $ 11,843 | $ 11,550 |
401(K) EMPLOYEE CONTRIBUTION _2
401(K) EMPLOYEE CONTRIBUTION PLAN (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Defined Contribution Plan [Abstract] | ||
Employer's contribution to the plan | $ 163 | $ 145 |
COMMITMENTS (Narrative) (Detail
COMMITMENTS (Narrative) (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rental Expense | $ 803 | $ 732 |
COMMITMENTS (Schedule of Lease
COMMITMENTS (Schedule of Lease Commitments) (Details) $ in Thousands | Sep. 30, 2018USD ($) |
September 30 | |
September 30, 2019 | $ 696 |
September 30, 2020 | 700 |
September 30, 2021 | 705 |
September 30, 2022 | 595 |
September 30, 2023 | 602 |
Thereafter | 2,130 |
Total | $ 5,428 |
FINANCIAL INSTRUMENTS WITH OF_3
FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK (Schedule of Financial Instruments Whose Contract Amounts Representing Credit Risk) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments - contract amounts | $ 72,986 | $ 71,234 |
Standby Letters of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments - contract amounts | 1,939 | 633 |
Unused lines of Credit [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments - contract amounts | 54,127 | 64,220 |
Loan Origination Commitments [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments - contract amounts | 4,397 | 2,429 |
Loan Origination Commitments One [Member] | ||
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments - contract amounts | $ 12,523 | $ 3,952 |
FAIR VALUE DISCLOSURES (Narrati
FAIR VALUE DISCLOSURES (Narrative) (Details) $ in Thousands | 12 Months Ended | |
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Total Unpaid Contractual Principal Balance | $ 5,952 | $ 7,789 |
Impaired Loans [Member] | ||
Number of impaired loans | 2 | |
Total Unpaid Contractual Principal Balance | $ 351 | |
Cumulative write-down of impaired loans | 90 | |
Other Real Estate Owned [Member] | ||
Cumulative write-down of impaired loans | $ 418 |
FAIR VALUE DISCLOSURES (Schedul
FAIR VALUE DISCLOSURES (Schedule of Assets Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fair value measured on recurring basis: | ||
Securities available for sale | $ 22,469 | $ 11,815 |
Obligations of U.S. government-sponsored enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 18,613 | 9,326 |
Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 2,361 | 2,449 |
Private label mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 40 | |
Fair Value, Measurements, Recurring [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 22,469 | 11,815 |
Fair Value, Measurements, Recurring [Member] | Obligations of U.S. government enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 1,495 | |
Fair Value, Measurements, Recurring [Member] | Obligations of U.S. government-sponsored enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 18,613 | 9,326 |
Fair Value, Measurements, Recurring [Member] | Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 2,361 | 2,449 |
Fair Value, Measurements, Recurring [Member] | Private label mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 40 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Obligations of U.S. government enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Obligations of U.S. government-sponsored enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Private label mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 22,469 | 11,815 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. government enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 1,495 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. government-sponsored enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 18,613 | 9,326 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 2,361 | 2,449 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Private label mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | 40 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Obligations of U.S. government enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Obligations of U.S. government-sponsored enterprises Mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Obligations of U.S. government-sponsored enterprises Debt securities [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Private label mortgage-backed securities-residential [Member] | ||
Fair value measured on recurring basis: | ||
Securities available for sale |
FAIR VALUE DISCLOSURES (Sched_2
FAIR VALUE DISCLOSURES (Schedule of Assets Measured at Fair Value on a Non-Recurring Basis) (Details) - Fair Value Measured on a Nonrecurring Basis [Member] - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | $ 464 | $ 909 |
Other real estate owned | 8,586 | 11,056 |
Total | 9,050 | 11,965 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | ||
Other real estate owned | ||
Total | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | ||
Other real estate owned | ||
Total | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans | 464 | 909 |
Other real estate owned | 8,586 | 11,056 |
Total | $ 9,050 | $ 11,965 |
FAIR VALUE DISCLOSURES (Sched_3
FAIR VALUE DISCLOSURES (Schedule of Additional Quantitative Information About Assets Measured at Fair Value) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Fair Value Measured on a Nonrecurring Basis [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value estimate | $ 9,050 | $ 11,965 | |
Impaired Loans [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Valuation techniques and Unobservable Input | [1],[2] | Appraisal of collateral; Appraisal adjustments | Appraisal of collateral; Appraisal adjustments |
Impaired Loans [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value estimate | $ 464 | $ 909 | |
Impaired Loans [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (10.20%) | (7.90%) | |
Impaired Loans [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (32.00%) | (35.20%) | |
Impaired Loans [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Weighted Average [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (21.30%) | (22.30%) | |
Other Real Estate Owned [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Valuation techniques and Unobservable Input | [1],[2] | Appraisal of collateral; Liquidation expenses | Appraisal of collateral; Liquidation expenses |
Other Real Estate Owned [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value estimate | $ 8,586 | $ 11,056 | |
Other Real Estate Owned [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Minimum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (5.60%) | (8.00%) | |
Other Real Estate Owned [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Maximum [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (48.50%) | (55.40%) | |
Other Real Estate Owned [Member] | Fair Value Measured on a Nonrecurring Basis [Member] | Weighted Average [Member] | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Fair value input- appraisal of collateral | (15.40%) | (25.00%) | |
[1] | Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal. | ||
[2] | Fair value is generally determined through independent appraisals for the underlying collateral, which generally include various level 3 inputs which are not identifiable. |
FAIR VALUE DISCLOSURES (Sched_4
FAIR VALUE DISCLOSURES (Schedule of the Carrying Amount, Fair Value, and Placement in the Fair Value Hierarchy of Financial Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Financial instruments - assets | ||
Investment securities held-to-maturity | $ 33,645 | $ 51,368 |
Fair Value, Inputs, Level 1 [Member] | ||
Financial instruments - assets | ||
Investment securities held-to-maturity | ||
Loans | ||
Financial instruments - liabilities | ||
Certificates of deposit | ||
Borrowings | ||
Fair Value, Inputs, Level 2 [Member] | ||
Financial instruments - assets | ||
Investment securities held-to-maturity | 32,151 | 51,241 |
Loans | ||
Financial instruments - liabilities | ||
Certificates of deposit | 130,813 | 128,750 |
Borrowings | 34,863 | 31,865 |
Fair Value, Inputs, Level 3 [Member] | ||
Financial instruments - assets | ||
Investment securities held-to-maturity | ||
Loans | 505,479 | 473,538 |
Financial instruments - liabilities | ||
Certificates of deposit | ||
Borrowings | ||
Reported Value [Member] | ||
Financial instruments - assets | ||
Investment securities held-to-maturity | 33,645 | 51,368 |
Loans | 508,430 | 470,693 |
Financial instruments - liabilities | ||
Certificates of deposit | 130,343 | 128,028 |
Borrowings | 35,524 | 31,905 |
Fair Value [Member] | ||
Financial instruments - assets | ||
Investment securities held-to-maturity | 32,151 | 51,241 |
Loans | 505,479 | 473,538 |
Financial instruments - liabilities | ||
Certificates of deposit | 130,813 | 128,750 |
Borrowings | $ 34,863 | $ 31,865 |
REGULATORY CAPITAL (Details)
REGULATORY CAPITAL (Details) | Jan. 01, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Magyar Bank [Member] | ||||||
Tier 1 leverage ratio | ||||||
Tier 1 leverage ratio (to average assets) ratio | 8.61% | 8.41% | ||||
Required amount of Tier 1 Capital for adequacy purposes effective, ratio | 4.00% | 4.00% | ||||
Minimum Tier 1 Capital required to be well-capitalized, ratio | 5.00% | 5.00% | ||||
Common Equity Tier 1 Capital (to risk-weighted assets) ratio | 11.53% | 11.75% | ||||
Required amount of common equity Tier 1 Capital for adequacy purposes effective, ratio | 6.375% | [1] | 5.75% | [2] | ||
Minimum common equity Tier 1 Capital required to be well-capitalized, ratio | 6.50% | 6.50% | ||||
Tier 1 risk-based capital ratio | ||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) ratio | 11.53% | 11.75% | ||||
Required amount of Tier 1 Capital for adequacy purposes effective, ratio | 7.875% | [1] | 7.25% | [2] | ||
Minimum Tier 1 Capital required to be well-capitalized, ratio | 8.00% | 8.00% | ||||
Total risk-based capital ratio | ||||||
Total risk-based capital ratio (to risk-weighted assets) ratio | 12.44% | 12.57% | ||||
Required amount of capital for adequacy purposes effective, ratio | 9.875% | [1] | 9.25% | [2] | ||
Minimum Capital required to be well-capitalized, ratio | 10.00% | 10.00% | ||||
Magyar Bank [Member] | Subsequent Event [Member] | ||||||
Tier 1 leverage ratio | ||||||
Required amount of Tier 1 Capital for adequacy purposes effective, ratio | 4.00% | |||||
Required amount of common equity Tier 1 Capital for adequacy purposes effective, ratio | [3] | 7.00% | ||||
Tier 1 risk-based capital ratio | ||||||
Required amount of Tier 1 Capital for adequacy purposes effective, ratio | [3] | 8.50% | ||||
Total risk-based capital ratio | ||||||
Required amount of capital for adequacy purposes effective, ratio | [3] | 10.50% | ||||
Magyar Bancorp, Inc. [Member] | ||||||
Tier 1 leverage ratio | ||||||
Tier 1 leverage ratio (to average assets) ratio | 8.55% | 8.45% | ||||
Common Equity Tier 1 Capital (to risk-weighted assets) ratio | 11.44% | 11.80% | ||||
Tier 1 risk-based capital ratio | ||||||
Tier 1 risk-based capital ratio (to risk-weighted assets) ratio | 11.44% | 11.80% | ||||
Total risk-based capital ratio | ||||||
Total risk-based capital ratio (to risk-weighted assets) ratio | 12.35% | 12.62% | ||||
[1] | Includes 1.875% capital conservation buffer | |||||
[2] | Includes 1.25% capital conservation buffer | |||||
[3] | Includes 2.50% capital conservation buffer |