What changed in this filing

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Item 1. Financial Statements

2023-08-09 compared with 2023-05-10 · 107 added, 88 removed, 768 unchanged (20% of the section changed)

4 unchanged sentences

(Dollars in thousands, except per share amounts)

March 31, September 30,

June 30, September 30,

Cash and cash equivalents (includes interest-earning deposits of $ 308,127 and $ 27,467 )

19 unchanged sentences

Common stock, $ .01 par value;

1,400,000,000 shares authorized, 136,144,725 and 138,858,884 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively

1,400,000,000 shares authorized, 136,158,569 and 138,858,884 shares issued and outstanding as of June 30, 2023 and September 30, 2022, respectively

Additional paid-in capital 1,167,979 1,190,213

9 unchanged sentences

(Dollars in thousands, except per share amounts)

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2023 2022 2023 2022

42 unchanged sentences

(Dollars in thousands)

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2023 2022 2023 2022

5 unchanged sentences

2,702 5,099 ( 135 ) 21,924

Comprehensive income $ 28,148 $ ( 30,958 ) $ 57,419 $ ( 15,793 )

Comprehensive income (loss) $ 239 $ ( 4,866 ) $ 57,658 $ ( 20,659 )

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(Dollars in thousands, except per share amounts)

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

Additional Unearned Total

17 unchanged sentences

Balance at March 31, 2023 $ 1,361 $ 1,168,059 $ ( 28,910 ) $ 50,167 $ ( 118,643 ) $ 1,072,034

For the Six Months Ended March 31, 2022

Net income 8,302 8,302

Other comprehensive loss, net of tax ( 8,063 ) ( 8,063 )

ESOP activity ( 155 ) 413 258

Stock-based compensation 75 75

Cash dividends to stockholders ($ 0.085 per share)

( 11,321 ) ( 11,321 )

Balance at June 30, 2023 $ 1,361 $ 1,167,979 $ ( 28,497 ) $ 47,148 $ ( 126,706 ) $ 1,061,285

For the Nine Months Ended June 30, 2022

Additional Unearned Total

17 unchanged sentences

Balance at March 31, 2022 $ 1,388 $ 1,189,999 $ ( 30,561 ) $ 89,833 $ ( 75,907 ) $ 1,174,752

Net income 21,152 21,152

Other comprehensive loss, net of tax ( 26,018 ) ( 26,018 )

ESOP activity ( 5 ) 413 408

Restricted stock activity, net ( 3 ) ( 3 )

Stock-based compensation 126 126

Cash dividends to stockholders ($ 0.285 per share)

( 38,677 ) ( 38,677 )

Balance at June 30, 2022 $ 1,388 $ 1,190,117 $ ( 30,148 ) $ 72,308 $ ( 101,925 ) $ 1,131,740

See accompanying notes to consolidated financial statements.

CAPITOL FEDERAL FINANCIAL, INC.

2 unchanged sentences

(Dollars in thousands)

For the Six Months Ended

For the Nine Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

32 unchanged sentences

(Dollars in thousands)

For the Six Months Ended

For the Nine Months Ended

CASH FLOWS FROM FINANCING ACTIVITIES:

6 unchanged sentences

Net cash provided by (used in) financing activities 617,590 ( 90,184 )

NET INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 11,013 102,157

NET INCREASE / (DECREASE) IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 280,215 ( 15,503 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

17 unchanged sentences

Interim results are not necessarily indicative of results for a full year.

Cash, Cash Equivalents and Restricted Cash - Cash, cash equivalents and restricted cash reported in the statement of cash flows consisted entirely of cash and cash equivalents of $ 60.2 million and $ 49.2 million at March 31, 2023 and September 30, 2022, respectively.

Cash, Cash Equivalents and Restricted Cash - Cash, cash equivalents and restricted cash reported in the statement of cash flows consisted entirely of cash and cash equivalents of $ 329.4 million and $ 49.2 million at June 30, 2023 and September 30, 2022, respectively.

At times, the Company holds restricted cash, which is reported in other assets on the consolidated balance sheet, related to collateral postings to/from the Bank's derivative counterparties associated with the Bank's interest rate swaps.

There was no restricted cash at March 31, 2023 or September 30, 2022.

There was no restricted cash at June 30, 2023 or September 30, 2022.

See additional discussion regarding the interest rate swaps in Note 5.

12 unchanged sentences

The two-class method is an earnings allocation that determines EPS for each class of common stock and participating security.

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2023 2022 2023 2022

12 unchanged sentences

The majority of the MBS and investment securities portfolios are composed of securities issued by United States Government-Sponsored Enterprises ("GSEs").

March 31, 2023

June 30, 2023

Gross Gross Estimated

18 unchanged sentences

The following tables summarize the estimated fair value and gross unrealized losses of those AFS securities on which an unrealized loss at the dates presented was reported and the continuous unrealized loss position for less than 12 months and equal to or greater than 12 months as of the dates presented.

March 31, 2023

June 30, 2023

Less Than 12 Months Equal to or Greater Than 12 Months

17 unchanged sentences

$ 342,869 $ 22,950 $ 1,185,108 $ 182,598

The unrealized losses at March 31, 2023 were a result of an increase in market yields from the time the securities were purchased.

The unrealized losses at June 30, 2023 were a result of an increase in market yields from the time the securities were purchased.

In general, as market yields rise, the fair value of securities will decrease;

as market yields fall, the fair value of securities will increase.

Management did not record an ACL on securities in an unrealized loss position at March 31, 2023 because scheduled coupon payments have been made, management anticipates that the entire principal balance will be collected as scheduled, and neither does the Company intend to sell the securities, nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount, which could be at maturity.

The amortized cost and estimated fair value of AFS debt securities as of March 31, 2023, by contractual maturity, are shown below.

Management did not record an ACL on securities in an unrealized loss position at June 30, 2023 because scheduled coupon payments have been made, management anticipates that the entire principal balance will be collected as scheduled, and neither does the Company intend to sell the securities, nor is it more likely than not that the Company will be required to sell the securities before the recovery of the remaining amortized cost amount, which could be at maturity.

The amortized cost and estimated fair value of AFS debt securities as of June 30, 2023, by contractual maturity, are shown below.

Actual principal repayments may differ from contractual maturities due to prepayment or early call privileges by the issuer.

11 unchanged sentences

The following table presents the taxable and non-taxable components of interest income on investment securities for the periods presented.

For the Three Months Ended For the Six Months Ended

March 31, March 31,

For the Three Months Ended For the Nine Months Ended

June 30, June 30,

2023 2022 2023 2022

4 unchanged sentences

The following table summarizes the carrying value of securities pledged as collateral for the obligations indicated below as of the dates presented.

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

(Dollars in thousands)

FHLB advances $ 576,765 $ 572,913

Public unit deposits 155,864 125,496

Federal Reserve Bank of Kansas City ("FRB of Kansas City") borrowings $ 693,853 $ 46,283

Public unit deposits 204,686 125,496

FHLB advances — 572,913

$ 898,539 $ 744,692

1 unchanged sentence

Loans receivable, net at the dates presented is summarized as follows:

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

(Dollars in thousands)

19 unchanged sentences

The Bank also originates consumer loans primarily secured by one- to four-family residential properties and originates and participates in commercial loans.

The Bank has a loan concentration in one- to four-family loans and geographic concentrations of these loans in Kansas, Missouri, and Texas.

The Bank has a concentration in one- to four-family loans and geographic concentrations of these loans in Kansas and Missouri.

One- to four-family loans - Full documentation to support an applicant's credit and income, and sufficient funds to cover all applicable fees and reserves at closing, are required on all loans.

6 unchanged sentences

Commercial loans - The Bank's commercial real estate and commercial construction loans are originated by the Bank or in participation with a lead bank.

The Bank has geographic concentrations of these loans in Kansas, Missouri and Texas.

When underwriting a commercial real estate or commercial construction loan, several factors are considered, such as the income producing potential of the property, cash equity provided by the borrower, the financial strength of the borrower, managerial expertise of the borrower or tenant, feasibility studies, lending experience with the borrower and the marketability of the property.

For commercial real estate and commercial construction participation loans, the Bank performs the same underwriting procedures as if the loan

was being originated by the Bank.

For commercial real estate and commercial

construction participation loans, the Bank performs the same underwriting procedures as if the loan was being originated by the Bank.

At the time of origination, loan-to-value ("LTV") ratios on commercial real estate loans generally do not exceed 85 % of the appraised value of the property securing the loans and the minimum debt service coverage ratio is generally 1.15 .

27 unchanged sentences

Loans classified as doubtful or loss are individually evaluated for loss.

At March 31, 2023 and September 30, 2022, there were no loans classified as doubtful, and all loans classified as loss were fully charged-off.

March 31, 2023

At June 30, 2023 and September 30, 2022, there were no loans classified as doubtful, and all loans classified as loss were fully charged-off.

The commercial special mention loans presented in the "Current Fiscal Year" column are related to three loans in a single commercial relationship where the borrower has experienced some performance issues, but is beginning to trend in a positive direction.

June 30, 2023

Current Fiscal Fiscal Fiscal Fiscal Revolving

69 unchanged sentences

All revolving lines of credit are presented separately, regardless of origination year.

March 31, 2023

June 30, 2023

Current Fiscal Fiscal Fiscal Fiscal Revolving

68 unchanged sentences

Delinquent and Nonaccrual Loans - The following tables present the amortized cost, at the dates indicated, by class, of loans 30 to 89 days delinquent, loans 90 or more days delinquent or in foreclosure, total delinquent loans, current loans, and total loans.

At March 31, 2023 and September 30, 2022, all loans 90 or more days delinquent were on nonaccrual status.

March 31, 2023

At June 30, 2023 and September 30, 2022, all loans 90 or more days delinquent were on nonaccrual status.

June 30, 2023

90 or More Days Total Total

25 unchanged sentences

$ 6,506 $ 9,175 $ 15,681 $ 7,464,898 $ 7,480,579

The amortized cost of mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of March 31, 2023 and September 30, 2022 was $ 1.9 million and $ 2.0 million, respectively, which is included in loans 90 or more days delinquent or in foreclosure in the tables above.

The carrying value of residential OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure was $ 160 thousand at March 31, 2023 and $ 328 thousand at September 30, 2022.

The following table presents the amortized cost at March 31, 2023 and September 30, 2022, by class, of loans classified as nonaccrual.

The amortized cost of mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as of June 30, 2023 and September 30, 2022 was $ 2.2 million and $ 2.0 million, respectively, which is included in loans 90 or more days delinquent or in foreclosure in the tables above.

There was no residential OREO held as of June 30, 2023.

The following table presents the amortized cost at June 30, 2023 and September 30, 2022, by class, of loans classified as nonaccrual.

Additionally, the amortized cost of nonaccrual loans that had no related ACL is presented, all of which were individually evaluated for loss and any identified losses have been charged off.

March 31, 2023 September 30, 2022

June 30, 2023 September 30, 2022

Nonaccrual Loans Nonaccrual Loans with No ACL Nonaccrual Loans Nonaccrual Loans with No ACL

12 unchanged sentences

Any increase in the amortized cost at the time of the restructuring was generally due to the capitalization of delinquent interest and/or escrow balances.

For the Three Months Ended For the Six Months Ended

March 31, 2023 March 31, 2023

For the Three Months Ended For the Nine Months Ended

June 30, 2023 June 30, 2023

Number Pre- Post- Number Pre- Post-

11 unchanged sentences

2 $ 148 $ 148 3 $ 387 $ 405

For the Three Months Ended For the Six Months Ended

March 31, 2022 March 31, 2022

For the Three Months Ended For the Nine Months Ended

June 30, 2022 June 30, 2022

Number Pre- Post- Number Pre- Post-

12 unchanged sentences

The following table provides information on TDRs that became delinquent during the periods presented within 12 months after being restructured.

For the Three Months Ended For the Six Months Ended

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022

For the Three Months Ended For the Nine Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

Number of Amortized Number of Amortized Number of Amortized Number of Amortized

11 unchanged sentences

Allowance for Credit Losses - The following is a summary of ACL activity, by loan portfolio segment, for the periods presented.

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

One- to Four-Family

7 unchanged sentences

Ending balance $ 2,155 $ 3,081 $ 239 $ 5,475 $ 16,685 $ 239 $ 22,399

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

One- to Four-Family

7 unchanged sentences

Ending balance $ 2,155 $ 3,081 $ 239 $ 5,475 $ 16,685 $ 239 $ 22,399

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

One- to Four-Family

7 unchanged sentences

Ending balance $ 1,904 $ 2,437 $ 224 $ 4,565 $ 11,490 $ 228 $ 16,283

For the Six Months Ended March 31, 2022

For the Nine Months Ended June 30, 2022

One- to Four-Family

8 unchanged sentences

The key assumptions in the Company's ACL model include the economic forecast, the forecast and reversion to mean time periods, and prepayment and curtailment assumptions.

Management also considered certain qualitative factors when evaluating the adequacy of the ACL at March 31, 2023.

The key assumptions utilized in estimating the Company's ACL at March 31, 2023 are discussed below.

• Economic Forecast - Management considered several economic forecasts provided by a third party and selected an economic forecast that was the most appropriate considering the facts and circumstances at March 31, 2023.

The forecasted economic indices applied to the model at March 31, 2023 were the national unemployment rate, changes in commercial real estate price index, changes in home values, and changes in the U.S.

Management also considered certain qualitative factors when evaluating the adequacy of the ACL at June 30, 2023.

The key assumptions utilized in estimating the Company's ACL at June 30, 2023 are discussed below.

The forecasted economic indices applied to the model at June 30, 2023 were the national unemployment rate, changes in commercial real estate price index, changes in home values, and changes in the U.S.

gross domestic product.

The economic index most impactful to all loan pools within the model at March 31, 2023 was the national unemployment rate.

The forecasted national unemployment rate in the economic scenario selected by management at March 31, 2023 had the national unemployment rate gradually increasing to 3.8 % by March 31, 2024 which was the end of our four quarter forecast time period.

• Forecast and reversion to mean time periods - The forecasted time period and the reversion to mean time period were each four quarters for all of the economic indices at March 31, 2023.

• Prepayment and curtailment assumptions - The assumptions used at March 31, 2023 were generally based on actual historical prepayment and curtailment speeds for each respective loan pool in the model.

The economic index most impactful to all loan pools within the model at June 30, 2023 was the national unemployment rate.

The forecasted national unemployment rate in the economic scenario selected by management at June 30, 2023 had the national unemployment rate gradually increasing to 4.0 % by June 30, 2024 which was the end of our four quarter forecast time period.

• Forecast and reversion to mean time periods - The forecasted time period and the reversion to mean time period were each four quarters for all of the economic indices at June 30, 2023.

• Prepayment and curtailment assumptions - The assumptions used at June 30, 2023 were generally based on actual historical prepayment and curtailment speeds for each respective loan pool in the model.

During the current year, there was a slowdown in portfolio prepayment speeds which reduced the projected prepayment speeds used in the model for generally all loan categories.

• Qualitative factors - The qualitative factors applied by management at March 31, 2023 included the following:

• Qualitative factors - The qualitative factors applied by management at June 30, 2023 included the following:

◦ The economic uncertainties related to the unemployment rate, the labor force composition, and the labor participation rate that are not captured in the economic forecasts;

◦ Other management considerations related to commercial real estate loans that were not captured via the model assumptions, such as the balance and trending of large dollar commercial real estate loans.

◦ Other management considerations related to commercial real estate loans that were not captured via the model assumptions.

Reserve for Off-Balance Sheet Credit Exposures - The following is a summary of the changes in reserve for off-balance sheet credit exposures during the periods indicated.

At March 31, 2023 and September 30, 2022, the Bank's off-balance sheet credit exposures totaled $ 1.02 billion and $ 992.6 million, respectively.

For the Three Months Ended For the Six Months Ended

March 31, 2023 March 31, 2022 March 31, 2023 March 31, 2022

At June 30, 2023 and September 30, 2022, the Bank's off-balance sheet credit exposures totaled $ 909.7 million and $ 992.6 million, respectively.

For the Three Months Ended For the Nine Months Ended

June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022

(Dollars in thousands)

Beginning balance $ 5,768 $ 3,672 $ 4,751 $ 5,743

Provision for credit losses 177 ( 951 ) 1,017 ( 2,071 )

(Release)/provision for credit losses ( 1,196 ) 141 ( 179 ) ( 1,930 )

Ending balance $ 4,572 $ 3,813 $ 4,572 $ 3,813

BORROWED FUNDS

FHLB Borrowings and Interest Rate Swaps - At March 31, 2023 and September 30, 2022, the Bank had entered into interest rate swap agreements with an aggregate notional amount of $ 365.0 million in order to hedge the variable cash flows associated with $ 365.0 million of adjustable-rate FHLB advances.

At March 31, 2023 and September 30, 2022, the interest rate swap agreements had an average remaining term to maturity of 2.6 years and 3.1 years, respectively.

FHLB Borrowings and Interest Rate Swaps - As of June 30, 2023 and September 30, 2022, the Bank held interest rate swap agreements with an aggregate notional amount of $ 365.0 million in order to hedge the variable cash flows associated with $ 365.0 million of adjustable-rate FHLB advances.

At June 30, 2023 and September 30, 2022, the interest rate swap agreements had an average remaining term to maturity of 2.3 years and 3.1 years, respectively.

The interest rate swaps were designated as cash flow hedges and involved the receipt of variable amounts from a counterparty in exchange for the Bank making fixed-rate payments over the life of the interest rate swap agreements.

At both March 31, 2023 and September 30, 2022, the interest rate swaps were in a gain position with a total fair value of $ 8.8 million and $ 12.5 million respectively, which was reported in other assets on the consolidated balance sheet.

During the three and six month periods ended March 31, 2023, $ 1.3 million and $ 2.1 million, respectively, was reclassified from AOCI as a decrease to interest expense.

During the three and six month periods ended March 31, 2022, $ 1.7 million and $ 3.5 million was reclassified from AOCI as an increase to interest expense.

At March 31, 2023, the Company estimated that $ 7.2 million of interest expense associated with the interest rate swaps would be reclassified from AOCI as a decrease to interest expense on FHLB borrowings during the next 12 months.

At June 30, 2023 and September 30, 2022, the interest rate swaps were in a gain position with a total fair value of $ 12.4 million and $ 12.5 million respectively, which was reported in other assets on the consolidated balance sheet.

During the three and nine month periods ended June 30, 2023, $ 1.7 million and $ 3.7 million, respectively, was reclassified from AOCI as a decrease to interest expense.

During the three and nine month periods ended June 30, 2022, $ 1.3 million and $ 4.8 million was reclassified from AOCI as an increase to interest expense.

At June 30, 2023, the Company estimated that $ 8.9 million of interest expense associated with the interest rate swaps would be reclassified from AOCI as a decrease to interest expense on FHLB borrowings during the next 12 months.

The Bank has minimum collateral posting thresholds with its derivative counterparties and posts collateral on a daily basis.

The Bank held cash collateral of $ 9.6 million and $ 12.1 million at March 31, 2023 and September 30, 2022, respectively.

During the current six month period, the Bank utilized a leverage strategy (the "leverage strategy") to increase earnings.

The leverage strategy involved borrowing up to $ 2.60 billion either on the Bank's line of credit with FHLB or by entering into short-term FHLB advances, depending on the rates offered by FHLB, with all of the balance being paid down at quarter end, or earlier if the strategy was not profitable.

The Bank held cash collateral of $ 13.1 million and $ 12.1 million at June 30, 2023 and September 30, 2022, respectively.

During the current nine month period, the Bank utilized a leverage strategy (the "leverage strategy") to increase earnings.

The leverage strategy involved borrowing on the Bank's FHLB line of credit or by entering into short-term FHLB advances, depending on the rates offered by FHLB, with all of the balance being paid down at quarter end, or earlier if the strategy was not profitable.

The proceeds of the borrowings, net of the required FHLB stock holdings, were deposited at the FRB of Kansas City.

20 unchanged sentences

If the price provided by the independent source varies by more than a predetermined percentage from the price received from the third party pricing service, then the variance is researched by management.

The Company did not have to adjust prices obtained from the third party pricing service when determining the fair value of its securities during the six months ended March 31, 2023 or during fiscal year 2022.

The Company did not have to adjust prices obtained from the third party pricing service when determining the fair value of its securities during the nine months ended June 30, 2023 or during fiscal year 2022.

The Company's major security types, based on the nature and risks of the securities, are:

9 unchanged sentences

On a quarterly basis, management corroborates the estimated fair values by internally calculating the estimated fair value using a discounted cash flow analysis with independent observable market-based inputs from a third party.

No adjustments were made to the estimated fair values obtained from the counterparty during the six months ended March 31, 2023 or during fiscal year 2022.

No adjustments were made to the estimated fair values obtained from the counterparty during the nine months ended June 30, 2023 or during fiscal year 2022.

The following tables provide the level of valuation assumption used to determine the carrying value of the Company's financial instruments measured at fair value on a recurring basis at the dates presented.

The Company did no t have any Level 3 financial instruments measured at fair value on a recurring basis at March 31, 2023 or September 30, 2022.

March 31, 2023

The Company did no t have any Level 3 financial instruments measured at fair value on a recurring basis at June 30, 2023 or September 30, 2022.

June 30, 2023

Quoted Prices Significant Significant

29 unchanged sentences

Those collateral dependent assets that are evaluated on an individual basis are considered financial assets measured at fair value on a non-recurring basis.

The fair value of collateral dependent loans/loans individually evaluated for loss on a non-recurring basis during the six months ended March 31, 2023 and 2022 that were still held in the portfolio as of March 31, 2023 and 2022 was $ 3.6 million and $ 4.2 million, respectively.

The fair value of collateral dependent loans/loans individually evaluated for loss on a non-recurring basis during the nine months ended June 30, 2023 and 2022 that were still held in the portfolio as of June 30, 2023 and 2022 was $ 3.9 million and $ 4.3 million, respectively.

Fair values of collateral dependent loans/loans individually evaluated for loss cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the loan and, as such, are classified as Level 3.

4 unchanged sentences

Adjustments to appraised or book values are generally based on assumptions not observable in the marketplace.

The primary significant unobservable inputs for commercial loans individually evaluated during the six months ended March 31, 2023 and March 31, 2022 were downward adjustments to the book value of the

The primary significant unobservable inputs for commercial loans individually evaluated during the nine months ended June 30, 2023 and June 30, 2022 were downward adjustments to the book value of the

collateral for lack of marketability.

During the six months ended March 31, 2023, the adjustments ranged from 8 % to 100 %, with a weighted average of 21 %.

During the six months ended March 31, 2022, the adjustments ranged from 9 % to 56 %, with a weighted average of 21 %.

During the nine months ended June 30, 2023, the adjustments ranged from 8 % to 100 %, with a weighted average of 21 %.

During the nine months ended June 30, 2022, the adjustments ranged from 9 % to 56 %, with a weighted average of 21 %.

The basis utilized in calculating the weighted averages for these adjustments was the original unadjusted value of each collateral item.

4 unchanged sentences

Fair values of foreclosed property cannot be determined with precision and may not be realized in an actual sale of the property and, as such, are classified as Level 3.

The fair value of OREO measured on a non-recurring basis during the six months ended March 31, 2023 that was still held in the portfolio as of March 31, 2023 was $ 93 thousand.

There was no OREO measured on a non-recurring basis during the six months ended March 31, 2022.

The carrying value of the properties equaled the fair value of the properties at March 31, 2023 and 2022.

There was no OREO measured on a non-recurring basis during the nine months ended June 30, 2023.

The fair value of OREO measured on a non-recurring basis during the nine months ended June 30, 2022 that was still held in the portfolio as of June 30, 2022 was $ 258 thousand.

The carrying value of the properties equaled the fair value of the properties at June 30, 2023 and 2022.

Fair Value Disclosures - The Company estimated fair value amounts using available market information and a variety of valuation methodologies as of the dates presented.

2 unchanged sentences

The carrying amounts and estimated fair values of the Company's financial instruments by fair value hierarchy, at the dates presented, were as follows:

March 31, 2023

June 30, 2023

Carrying Estimated Fair Value

21 unchanged sentences

The following tables present the changes in the components of AOCI, net of tax, for the periods indicated.

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Unrealized Unrealized

9 unchanged sentences

Ending balance $ ( 136,057 ) $ 9,351 $ ( 126,706 )

For the Six Months Ended March 31, 2023

For the Nine Months Ended June 30, 2023

Unrealized Unrealized

9 unchanged sentences

Ending balance $ ( 136,057 ) $ 9,351 $ ( 126,706 )

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Unrealized Unrealized

9 unchanged sentences

Ending balance $ ( 102,893 ) $ 968 $ ( 101,925 )

For the Six Months Ended March 31, 2022

For the Nine Months Ended June 30, 2022

Unrealized Unrealized

10 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements