What changed in this filing

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Item 1. Financial Statements

2025-08-08 compared with 2025-05-09 · 152 added, 149 removed, 1037 unchanged (22% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2025 and September 30, 2024

June 30, 2025 and September 30, 2024

(Dollars in thousands, except per share amounts)

38 unchanged sentences

CONSOLIDATED BALANCE SHEETS (continued)

March 31, 2025 and September 30, 2024

June 30, 2025 and September 30, 2024

(Dollars in thousands, except per share amounts)

7 unchanged sentences

50,000,000 shares authorized;

7,903,489 shares issued and outstanding - March 31, 2025 7,960,127 shares issued and outstanding - September 30, 2024

7,876,853 shares issued and outstanding - June 30, 2025 7,960,127 shares issued and outstanding - September 30, 2024

27,226 29,862

8 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

For the three and six months ended March 31, 2025 and 2024

For the three and nine months ended June 30, 2025 and 2024

(Dollars in thousands, except per share amounts)

Three Months Ended March 31, Six Months Ended

Three Months Ended June 30, Nine Months Ended

2025 2024 2025 2024

12 unchanged sentences

Provision for credit losses - loans 351 264 640 810

(Recapture of) provision for credit losses - investment securities ( 5 ) 3 ( 10 ) ( 7 )

Recapture of credit losses - investment securities ( 4 ) ( 12 ) ( 14 ) ( 20 )

Provision for (recapture of) credit losses - unfunded commitments 93 ( 8 ) 87 ( 130 )

Total provision for credit losses - net 246 81 272 417

Total provision for (recapture of) credit losses - net 440 244 713 660

Net interest income after provision for (recapture of) credit losses 17,182 15,737 51,092 46,960

1 unchanged sentence

Net recoveries on investment securities 2 2 9 9

Gain on sale of investment securities available for sale, net 24 — 24 —

Service charges on deposits 966 1,014 2,924 3,024

3 unchanged sentences

Escrow fees 32 18 66 51

Servicing income on loans sold 39 19 101 37

Other, net 241 215 624 652

4 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (continued)

For the three and six months ended March 31, 2025 and 2024

For the three and nine months ended June 30, 2025 and 2024

(Dollars in thousands, except per share amounts)

Three Months Ended March 31, Six Months Ended

Three Months Ended June 30, Nine Months Ended

2025 2024 2025 2024

2 unchanged sentences

Premises and equipment 973 1,011 2,998 3,065

Gain on sales/dispositions of premises and equipment, net — ( 3 ) — ( 3 )

Advertising 182 211 552 556

25 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three and six months ended March 31, 2025 and 2024

For the three and nine months ended June 30, 2025 and 2024

(Dollars in thousands)

Three Months Ended March 31 Six Months Ended

Three Months Ended June 30 Nine Months Ended

2025 2024 2025 2024

12 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the three and six months ended March 31, 2025 and 2024

For the three and nine months ended June 30, 2025 and 2024

(Dollars in thousands, except per share amounts)

4 unchanged sentences

Earnings Total

Balance, December 31, 2023 8,120,708 $ 34,869 $ 203,327 $ ( 827 ) $ 237,369

Balance, March 31, 2024 8,023,121 $ 32,338 $ 207,086 $ ( 745 ) $ 238,679

Net income — — 5,924 — 5,924

5 unchanged sentences

Stock-based compensation expense — 105 — — 105

Balance, June 30, 2024 7,953,421 $ 30,681 $ 211,087 $ ( 545 ) $ 241,223

Balance, March 31, 2025 7,903,489 $ 28,028 $ 225,166 $ ( 670 ) $ 252,524

Balance, December 31, 2024 7,954,673 $ 29,593 $ 220,398 $ ( 792 ) $ 249,199

Net income — — 7,100 — 7,100

Other comprehensive income — — — 122 122

Other comprehensive loss — — — ( 105 ) ( 105 )

Repurchase of common stock, net of tax ( 34,236 ) ( 1,053 ) — — ( 1,053 )

Restricted stock grant forfeitures ( 1,380 ) ( 11 ) — — ( 11 )

Exercise of stock options 7,600 130 — — 130

2 unchanged sentences

Stock-based compensation expense — 121 — — 121

Balance, March 31, 2025 7,903,489 $ 28,028 $ 225,166 $ ( 670 ) $ 252,524

Balance, June 30, 2025 7,876,853 $ 27,226 $ 230,213 $ ( 775 ) $ 256,664

Common Stock Accumulated

12 unchanged sentences

Adoption of Accounting Standards Update ("ASU") 2016-13, net of tax — — ( 488 ) — ( 488 )

Balance, March 31, 2024 8,023,121 $ 32,338 $ 207,086 $ ( 745 ) $ 238,679

Balance, June 30, 2024 7,953,421 $ 30,681 $ 211,087 $ ( 545 ) $ 241,223

Balance, September 30, 2024 7,960,127 $ 29,862 $ 215,531 $ 20 $ 245,413

7 unchanged sentences

Stock-based compensation expense — 404 — — 404

Balance, March 31, 2025 7,903,489 $ 28,028 $ 225,166 $ ( 670 ) $ 252,524

Balance, June 30, 2025 7,876,853 $ 27,226 $ 230,213 $ ( 775 ) $ 256,664

See notes to unaudited consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended March 31, 2025 and 2024

For the nine months ended June 30, 2025 and 2024

(Dollars in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

Cash flows from operating activities

3 unchanged sentences

Depreciation 1,131 1,088

Deferred income taxes ( 73 ) —

Accretion of discount on purchased loans ( 92 ) ( 29 )

1 unchanged sentence

Stock-based compensation expense 393 316

Gain on sale of investment securities available for sale, net ( 24 ) —

Net recoveries on investment securities ( 9 ) ( 9 )

2 unchanged sentences

Gain on sales of loans, net ( 303 ) ( 188 )

Gain on sales/dispositions of premises and equipment, net — ( 3 )

Loans originated for sale ( 14,059 ) ( 10,330 )

7 unchanged sentences

Net decrease in CDs held for investment 1,747 4,730

Proceeds from sale of investment securities available for sale 13,494 —

Purchase of investment securities held to maturity ( 5,413 ) ( 1,919 )

4 unchanged sentences

Redemption of FHLB stock — 1,565

Decrease (increase) in loans receivable, net 1,059 ( 57,610 )

Increase in loans receivable, net ( 20,744 ) ( 96,118 )

Purchases of premises and equipment ( 1,135 ) ( 1,010 )

Net cash provided by (used in) investing activities 20,109 ( 13,506 )

Proceeds from sales of premises and equipment — 8

Net cash used in investing activities ( 3,924 ) ( 28,676 )

S ee notes to unaudited consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

For the six months ended March 31, 2025 and 2024

For the nine months ended June 30, 2025 and 2024

(Dollars in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

Cash flows from financing activities

4 unchanged sentences

Payment of dividends ( 6,033 ) ( 5,739 )

Net cash (used in) provided by financing activities ( 2,924 ) 56,159

Net cash provided by financing activities 12,747 42,464

Net increase in cash and cash equivalents 28,899 30,192

20 unchanged sentences

The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024 (“2024 Form 10-K”).

The unaudited consolidated results of operations for the six months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2025.

The unaudited consolidated results of operations for the nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2025.

(b) Principles of Consolidation:

5 unchanged sentences

Actual results could differ from those estimates.

(e) Certain prior period amounts have been reclassified to conform to the March 31, 2025 presentation with no change to previously reported net income or total shareholders’ equity.

(e) Certain prior period amounts have been reclassified to conform to the June 30, 2025 presentation with no change to previously reported net income or total shareholders’ equity.

(2) INVESTMENT SECURITIES

Held to maturity and available for sale investment securities have been classified according to management’s intent and were as follows as of March 31, 2025 and September 30, 2024 (dollars in thousands):

Held to maturity and available for sale investment securities have been classified according to management’s intent and were as follows as of June 30, 2025 and September 30, 2024 (dollars in thousands):

Losses Estimated

Fair Value Allowance for Credit Losses

March 31, 2025

June 30, 2025

Held to Maturity

7 unchanged sentences

Total $ 141,570 $ 221 $ ( 6,169 ) $ 135,622 $ 46

March 31, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

June 30, 2025 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Available for Sale

18 unchanged sentences

Total $ 72,231 $ 551 $ ( 525 ) $ 72,257

Held to maturity and available for sale investment securities with unrealized losses were as follows as of March 31, 2025 (dollars in thousands):

Held to maturity and available for sale investment securities with unrealized losses were as follows as of June 30, 2025 (dollars in thousands):

Less Than 12 Months 12 Months or Longer Total

6 unchanged sentences

Private label residential 1,303 ( 5 ) 3 15,011 ( 1,004 ) 14 16,314 ( 1,009 )

Bank issued trust preferred securities

$ 15,763 $ ( 77 ) 14 $ 96,518 $ ( 6,092 ) 68 $ 112,281 $ ( 6,169 )

$ 13,564 $ ( 65 ) 14 $ 98,560 $ ( 6,795 ) 74 $ 112,124 $ ( 6,860 )

Available for sale

21 unchanged sentences

$ 13,330 $ ( 118 ) 5 $ 25,751 $ ( 407 ) 23 $ 39,081 $ ( 525 )

During the six months ended March 31, 2025, the Company recorded a $ 2,000 net realized loss on 13 held to maturity investment securities, all of which had been recognized previously as a credit loss.

During the six months ended March 31, 2024, the Company had no net realized losses on held to maturity investment securities.

The recorded amount of investment securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $ 202.44 million and $ 208.81 million at March 31, 2025 and September 30, 2024, respectively.

The contractual maturities of investment securities at March 31, 2025 were as follows (dollars in thousands).

During the nine months ended June 30, 2025, the Company recorded a $ 3,000 net realized loss on 13 held to maturity investment securities, all of which had been recognized previously as a credit loss.

During the nine months ended June 30,

2024, the Company recorded a $ 1,000 net realized loss on 14 held to maturity investment securities all of which had been recognized previously as credit losses.

The recorded amount of investment securities pledged as collateral for public fund deposits, federal treasury tax and loan deposits, FHLB collateral and other non-profit organization deposits totaled $ 207.83 million and $ 208.81 million at June 30, 2025 and September 30, 2024, respectively.

The contractual maturities of investment securities at June 30, 2025 were as follows (dollars in thousands).

Expected maturities may differ from scheduled maturities due to the prepayment of principal or call provisions.

11 unchanged sentences

The Company assesses each available for sale investment security that is in an unrealized loss position to determine whether the decline in fair value below the amortized cost basis results from a credit loss or other factors.

The Company did not record an ACL on any available for sale investment securities at March 31, 2025 or September 30, 2024.

The Company did not record an ACL on any available for sale investment securities at June 30, 2025 or September 30, 2024.

As of both dates, the Company considered the unrealized losses across the classes of major security-type to be related to fluctuations in market conditions, primarily interest rates, and not reflective of a deterioration in credit value.

12 unchanged sentences

The calculation is completed on a quarterly basis using the default studies provided by an industry leading source.

At March 31, 2025 and September 30, 2024, the ACL on the held to maturity securities portfolio totaled $ 50,000 and $ 60,000 , respectively.

The following tables set forth information for the three and six months ended March 31, 2025 and 2024, respectively, regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

At June 30, 2025 and September 30, 2024, the ACL on the held to maturity securities portfolio totaled $ 46,000 and $ 60,000 , respectively.

The following tables set forth information for the three and nine months ended June 30, 2025 and 2024, respectively, regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance

4 unchanged sentences

Total $ 50 $ ( 4 ) $ 46 $ 85 $ ( 13 ) * $ 72

Six Months Ended March 31, 2025 Six Months Ended March 31, 2024

*Amount differs from Income Statement due to rounding.

Nine Months Ended June 30, 2025 Nine Months Ended June 30, 2024

Beginning Allowance Provision for (Recapture of) Credit Losses Ending Allowance Beginning Allowance Impact of Adopting CECL (ASU 2016-13) Provision for (Recapture of) Credit Losses Ending Allowance

6 unchanged sentences

Changes in the ACL are recorded through the provision for (recapture of) credit losses on the consolidated income statement.

Accrued interest receivable on held to maturity investment securities totaled $ 635,000 at March 31, 2025 and is included in accrued interest receivable on the consolidated balance sheet.

Accrued interest receivable on held to maturity investment securities totaled $ 698,000 at June 30, 2025 and is included in accrued interest receivable on the consolidated balance sheet.

This amount is excluded from the estimate of expected credit losses.

1 unchanged sentence

When held to maturity investment securities are placed on non-accrual status, unpaid interest credited to income is reversed.

The Company had $ 41,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at March 31, 2025.

The Company had $ 38,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at June 30, 2025.

The Company monitors the credit quality of investment securities held to maturity using credit ratings from Moody's, S&P and Fitch.

The Company monitors the credit ratings on a quarterly basis.

The following tables set forth the Company's held to maturity investment securities at March 31, 2025 and September 30, 2024 by credit quality indicator:

The following tables set forth the Company's held to maturity investment securities at June 30, 2025 and September 30, 2024, by credit quality indicator:

Credit Ratings

As of March 31, 2025 AAA/AA/A BBB/BB/B Unrated Total

As of June 30, 2025 AAA/AA/A BBB/BB/B Unrated Total

Held to Maturity

21 unchanged sentences

The amounts written off due to credit loss remain and continue to be recovered on a cash basis.

The following table presents a roll forward of the credit loss component of held to maturity investment securities that have been written down for OTTI with the credit loss component recognized in earnings for the six months ended March 31, 2025 and 2024 (dollars in thousands):

Six Months Ended

The following table presents a roll forward of the credit loss component of held to maturity investment securities that have been written down for OTTI with the credit loss component recognized in earnings for the nine months ended June 30, 2025 and 2024 (dollars in thousands):

Nine Months Ended

Beginning balance of credit loss $ 803 $ 816

15 unchanged sentences

Based on this assessment, the Company determined that it is not "more likely than not" that the Company's fair value is less than its carrying amount, and, therefore, goodwill was determined not to be impaired at May 31, 2025.

As of March 31, 2025, management believes that there have been no events or changes in the circumstances since May 31, 2024 that would indicate a potential impairment of goodwill.

As of June 30, 2025, management believes that there have been no events or changes in the circumstances since May 31, 2025 that would indicate a potential impairment of goodwill.

No assurances can be given, however, that the Company will not record an impairment loss on goodwill in the future.

4 unchanged sentences

CDI is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life.

As of March 31, 2025, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

As of June 30, 2025, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI.

(4) LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES

Loans receivable by portfolio segment consisted of the following at March 31, 2025 and September 30, 2024 (dollars in thousands):

Loans receivable by portfolio segment consisted of the following at June 30, 2025 and September 30, 2024 (dollars in thousands):

2025 September 30,

26 unchanged sentences

__________________

(1) Does not include one- to four-family loans held for sale totaling $ 1.2 million and $ 0 at March 31, 2025 and September 30, 2024, respectively.

Loans receivable at March 31, 2025 and September 30, 2024 are reported net of unamortized discounts totaling $ 131,000 and $ 155,000 , respectively.

(1) Does not include one- to four-family loans held for sale totaling $ 1.76 million and $ 0 at June 30, 2025 and September 30, 2024, respectively.

Loans receivable at June 30, 2025 and September 30, 2024, are reported net of unamortized discounts totaling $ 63,000 and $ 155,000 , respectively.

Credit Quality Indicators

14 unchanged sentences

Loans in this classification have the weaknesses of substandard loans with the additional characteristic that the weaknesses make the collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss.

At March 31, 2025 and September 30, 2024, there was one loan classified as doubtful which is supported by an SBA guarantee of the remaining balance.

At June 30, 2025 and September 30, 2024, there was one loan classified as doubtful which is supported by an SBA guarantee of the remaining balance.

Loans in this classification are considered uncollectible and of such little value that continuance as an asset is not warranted.

This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future.

At March 31, 2025 and September 30, 2024, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at March 31, 2025 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):

At June 30, 2025 and September 30, 2024, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at June 30, 2025, by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):

Term Loans Amortized Cost Basis by Origination Fiscal Year

2 unchanged sentences

Pass $ 6,854 $ 23,038 $ 79,736 $ 105,353 $ 45,490 $ 50,458 $ — $ 310,929

Watch — — 1,781 — — — — 1,781

Special Mention — — — 4,864 — — — 4,864

2 unchanged sentences

Pass $ 12,807 $ 13,131 $ 35,324 $ 39,219 $ 22,970 $ 64,281 $ 1,196 $ 188,928

Watch — — — — — 1,786 — 1,786

Substandard — — — — 9,704 — — 9,704

44 unchanged sentences

Pass $ 6,859 $ 13,771 $ 17,969 $ 28,520 $ 6,257 $ 9,835 $ 41,208 $ 124,419

Watch — — — — 22 — — 22

Special Mention — — — 199 315 211 — 725

15 unchanged sentences

(1) Net of construction LIP

The following table sets forth the Company's loan portfolio at September 30, 2024 by risk attribute and year of origination as well

as gross charges offs in the year ending September 30, 2024:

The following table sets forth the Company's loan portfolio at September 30, 2024, by risk attribute and year of origination as well as gross charges offs in the year ending September 30, 2024:

Term Loans Amortized Cost Basis by Origination Fiscal Year

88 unchanged sentences

In addition, regulatory agencies, as integral part of their examination process, periodically review the Company's ACL and may require the Company to make adjustments to the ACL based on their judgment about information available to them at the time of their examinations.

The following tables set forth information for the three and six months ended March 31, 2025 and 2024 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2025

The following tables set forth information for the three months ended June 30, 2025 and 2024, regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended June 30, 2025

Allowance Provision for

16 unchanged sentences

Total $ 17,525 $ 351 $ — $ 2 $ 17,878

Six Months Ended March 31, 2025

Three Months Ended June 30, 2024

Allowance Provision for

(Recapture of) Credit Losses Charge-

(Recapture of) Loan Losses Charge-

Offs Recoveries Ending

14 unchanged sentences

Total $ 16,818 $ 264 $ ( 81 ) $ 45 $ 17,046

Three Months Ended March 31, 2024

The following tables set forth information for the nine months ended June 30, 2025 and 2024, regarding activity in the ACL by portfolio segment (dollars in thousands):

Nine Months Ended June 30, 2025

Allowance Provision for

(Recapture of) Loan Losses Charge-

(Recapture of) Credit Losses Charge-

Offs Recoveries Ending

14 unchanged sentences

Total $ 17,478 $ 640 $ ( 245 ) $ 5 $ 17,878

Six Months Ended March 31, 2024

Nine Months Ended June 30, 2024

Allowance Impact of Adopting CECL (ASU 2016-13) Provision for

22 unchanged sentences

A loan is generally not removed from non-accrual until all delinquent principal, interest and late fees have been brought current and the borrower demonstrates repayment ability over a period of not less than six months and all taxes are current.

The following tables present an analysis of loans by aging category and portfolio segment at March 31, 2025 and September 30, 2024 (dollars in thousands):

The following tables present an analysis of loans by aging category and portfolio segment at June 30, 2025 and September 30, 2024 (dollars in thousands):

Past Due 60-89

3 unchanged sentences

Past Due Current Total

March 31, 2025

June 30, 2025

Mortgage loans:

50 unchanged sentences

(2) Net of construction LIP.

At March 31, 2025, the Company had $ 1.38 million of non-accrual loans with an ACL of $ 423,000 and $ 946,000 of non-accrual loans with no ACL.

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of March 31, 2025 (in thousands):

At June 30, 2025, the Company had $ 523,000 of non-accrual loans with an ACL of $ 308,000 and $ 3.32 million of non-accrual loans with no ACL.

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of June 30, 2025 (in thousands):

Recorded Investment Related ACL

23 unchanged sentences

These methods incorporate the post-modification of loan terms, as well as defaults and charge-offs associated with historical modified loans.

The following tables present the amortized cost basis of loans at March 31, 2025 that were both experiencing financial difficulty and modified during the six months ended March 31, 2025, by loan class and modification type (dollars in thousands):

The following tables present the amortized cost basis of loans at June 30, 2025 that were both experiencing financial difficulty and modified during the nine months ended June 30, 2025, by loan class and modification type (dollars in thousands):

Combination - Term Extension and Collateral Addition

March 31, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

June 30, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 256 0.20 % Loan extended three months and secured a deed of trust on a land parcel

Combination - Term Extension and Payment Modification

March 31, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

June 30, 2025 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 2 — % Loan extended seven months , monthly payment reduced with principal payments due at time of change in terms and 1.5 months after signing

There were no modified loans to borrowers experiencing financial difficulty at March 31, 2024.

At March 31, 2025, the Company has operating leases for two retail bank branch offices and an administrative office.

The loans above are performing according to modified terms.

There were no modified loans to borrowers experiencing financial difficulty at June 30, 2024.

At June 30, 2025, the Company has operating leases for two retail bank branch offices and an administrative office.

The Company's leases have remaining lease terms of two to seven years , and include options to extend the leases for up to five years .

Lease extensions are not certain, and the Company evaluates each lease based on the specific circumstances for the location to determine the probability of exercising the extensions in the calculation of ROU assets and lease liabilities.

The components of lease cost (included in the premises and equipment expense category in the consolidated statements of income) are as follows for the three and six months ended March 31, 2025 and 2024 (dollars in thousands):

Three Months Ended March 31, Six Months Ended March 31,

The components of lease cost (included in the premises and equipment expense category in the consolidated statements of income) are as follows for the three and nine months ended June 30, 2025 and 2024 (dollars in thousands):

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

2 unchanged sentences

Total lease cost $ 87 $ 98 $ 284 $ 283

The following table provides supplemental information related to operating leases at or for the three and six months ended March 31, 2025 and 2024 (dollars in thousands):

At or For the Three Months Ended March 31, 2025 At or For the Six Months Ended March 31, 2025

The following tables provide supplemental information related to operating leases at or for the three and nine months ended June 30, 2025 and 2024 (dollars in thousands):

At or For the Three Months Ended June 30, 2025 At or For the Nine Months Ended June 30, 2025

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Weighted average discount rate-operating leases 2.35 % 2.35 %

At or For the Three Months Ended March 31, 2024 At or For the Six Months Ended March 31, 2024

At or For the Three Months Ended June 30, 2024 At or For the Nine Months Ended June 30, 2024

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

As an alternative, the weighted average discount rate used to estimate the present value of future lease payments in calculating the value of the ROU asset and lease liability was determined by utilizing the FHLB fixed-rate credit advance borrowing rate for the term correlating to the remaining term of each lease.

Maturities of operating lease liabilities at March 31, 2025 for future fiscal years are as follows (dollars in thousands):

Maturities of operating lease liabilities at June 30, 2025 for future fiscal years are as follows (dollars in thousands):

Remainder of Fiscal 2025 $ 85

12 unchanged sentences

Common stock equivalents arise from the assumed conversion of outstanding stock options.

Information regarding the calculation of basic and diluted net income per common share for the three and six months ended March 31, 2025 and 2024 is as follows (dollars in thousands, except per share amounts):

Three Months Ended March 31, Six Months Ended March 31,

Information regarding the calculation of basic and diluted net income per common share for the three and nine months ended June 30, 2025 and 2024 is as follows (dollars in thousands, except per share amounts):

Three Months Ended June 30, Nine Months Ended June 30,

2025 2024 2025 2024

10 unchanged sentences

____________________________________________

(1) For the three and six months ended March 31, 2025, average options to purchase 126,540 and 111,213 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

For the three and six months ended March 31, 2024, average options to purchase 244,030 and 229,232 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

(1) For the three and nine months ended June 30, 2025, average options to purchase 137,720 and 120,049 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

For the three and nine months ended June 30, 2024, average options to purchase 240,820 and 233,081 shares of common stock, respectively, were outstanding but not included in the computation of diluted net income per common share because their effect would have been anti-dilutive.

(7) ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The changes in accumulated other comprehensive income (loss) ("AOCI") by component during the three and six months ended March 31, 2025 and 2024 are as follows (dollars in thousands):

Three Months Ended March 31, 2025

Changes in fair value of available for sale securities (1) Total (1)

Balance of AOCI at the beginning of period $ ( 792 ) $ ( 792 )

Other comprehensive income 122 122

Balance of AOCI at the end of period $ ( 670 ) $ ( 670 )

__________________________

(1) All amounts are net of income taxes.

Six Months Ended March 31, 2025

Changes in fair value of available for sale securities (1) Total (1)

The changes in accumulated other comprehensive income (loss) ("AOCI") by component during the three and nine months ended June 30, 2025 and 2024, are as follows (dollars in thousands):

Three Months Ended June 30, 2025 Nine Months Ended June 30, 2025

Changes in fair value of available for sale securities (1) Total Changes in fair value of available for sale securities (1) Total

Balance of AOCI at the beginning of period $ ( 670 ) $ ( 670 ) $ 20 $ 20

3 unchanged sentences

(1) All amounts are net of income taxes.

Three Months Ended March 31, 2024

Changes in fair value of available for sale securities (1) Total (1)

Balance of AOCI at the beginning of period $ ( 827 ) $ ( 827 )

Other comprehensive income 82 82

Balance of AOCI at the end of period $ ( 745 ) $ ( 745 )

__________________________

(1) All amounts are net of income taxes.

Six Months Ended March 31, 2024

Changes in fair value of available for sale securities (1) Changes in OTTI on held to maturity securities (1) Total (1)

Three Months Ended June 30, 2024 Nine Months Ended June 30, 2024

Changes in fair value of available for sale securities (1) Total Changes in fair value of available for sale securities (1) Accretion of other-than-temporary impairment on held to maturity securities (1) Total

Balance of AOCI at the beginning of period $ ( 745 ) $ ( 745 ) $ ( 1,075 ) $ ( 9 ) $ ( 1,084 )

10 unchanged sentences

Restricted stock awards typically vest in equal annual installments over a three - or five-year period beginning on the first anniversary of the grant date.

At March 31, 2025, 160,185 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock.

At June 30, 2025, 162,185 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock.

The Company's 2014 Equity Incentive Plan (the "2014 Plan") expired on January 27, 2025;

therefore, no further awards may be granted under the plan.

As of March 31, 2025, there were 159,780 shares outstanding that had been previously granted in the 2014 Plan, of which 137,350 were vested and 22,430 were unvested.

Stock option activity for the six months ended March 31, 2025 and 2024 is summarized as follows:

Six Months Ended March 31, 2025 Six Months Ended March 31, 2024

As of June 30, 2025, there were 150,780 shares outstanding that had been previously granted in the 2014 Plan, of which 128,350 were vested and 22,430 were unvested.

Stock option activity for the nine months ended June 30, 2025 and 2024, is summarized as follows:

Nine Months Ended June 30, 2025 Nine Months Ended June 30, 2024

Number of Shares Weighted

5 unchanged sentences

The fair value of stock options is determined using the Black-Scholes valuation model.

There were no stock options granted during the six months ended March 31, 2025 and 2024.

The aggregate intrinsic value of options exercised during the six months ended March 31, 2025 and 2024 was $ 386,000 and $ 499,000 , respectively.

At March 31, 2025, there were 71,230 unvested options with an aggregate grant date fair value of $ 431,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at March 31, 2025 was $ 282,000 .

There were 2,500 options that vested during the six months ended March 31, 2025 with a total fair value of $ 16,000 .

At March 31, 2024, there were 121,820 unvested options with an aggregate grant date fair value of $ 709,000 .

There were 300 options that vested during the six months ended March 31, 2024 with a total fair value of $ 2,000 .

Additional information regarding options outstanding at March 31, 2025 is as follows:

There were no stock options granted during the nine months ended June 30, 2025 and 2024.

The aggregate intrinsic value of options exercised during the nine months ended June 30, 2025 and 2024 was $ 487,000 and $ 501,000 , respectively.

At June 30, 2025, there were 69,430 unvested options with an aggregate grant date fair value of $ 421,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at June 30, 2025 was $ 346,000 .

There were 2,500 options that vested during the nine months ended June 30, 2025 with a total fair value of $ 16,000 .

At June 30, 2024, there were 121,820 unvested options with an aggregate grant date fair value of $ 709,000 .

There were 300 options that vested during the nine months ended June 30, 2024 with a total fair value of $ 2,000 .

Additional information regarding options outstanding at June 30, 2025, is as follows:

Options Outstanding Options Exercisable

9 unchanged sentences

252,980 $ 26.02 4.9 183,550 $ 25.93 4.2

The aggregate intrinsic value of options outstanding at March 31, 2025 and 2024 was $ 1.20 million and $ 1.06 million , respectively.

As of March 31, 2025, unrecognized compensation cost related to unvested stock options was $ 363,000 , which is expected to be recognized over a weighted average period of 1.46 years.

There were no restricted stock awards granted during the six months ended March 31, 2025 and 2024.

Six Months Ended March 31, 2025 Six Months Ended March 31, 2024

The aggregate intrinsic value of options outstanding at June 30, 2025 and 2024, was $ 1.33 million and $ 1.07 million , respectively.

As of June 30, 2025, unrecognized compensation cost related to unvested stock options was $ 309,000 , which is expected to be recognized over a weighted average period of 1.37 years.

There were no restricted stock awards granted during the nine months ended June 30, 2025 and 2024.

Nine Months Ended June 30, 2025 Nine Months Ended June 30, 2024

Number of Unvested Shares Weighted Average Grant Date Fair Value Number of Unvested Shares Weighted Average Grant Date Fair Value

5 unchanged sentences

The related stock-based compensation expense is recorded over the requisite service period.

At March 31, 2025, unrecognized compensation cost related to unvested restricted stock awards was $ 1.21 million, which is expected to be recognized over a weighted average period of 2.32 years.

At June 30, 2025, unrecognized compensation cost related to unvested restricted stock awards was $ 1.12 million, which is expected to be recognized over a weighted average period of 2.28 years.

(9) FAIR VALUE MEASUREMENTS

5 unchanged sentences

Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

liabilities in markets that are not active, and inputs other than quoted prices that are observable or can be corroborated by observable market data.

Significant observable inputs other than quoted prices included within Level 1, such as quoted prices for similar (as opposed to identical) assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable or can be corroborated by observable market data.

Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability based on the best information available in the circumstances.

4 unchanged sentences

government agency securities are based upon quoted market prices (Level 1).

The Company had no liabilities measured at fair value on a recurring basis at March 31, 2025 and September 30, 2024.

The Company's assets measured at estimated fair value on a recurring basis at March 31, 2025 and September 30, 2024 were as follows (dollars in thousands):

March 31, 2025 Estimated Fair Value

The Company had no liabilities measured at fair value on a recurring basis at June 30, 2025 and September 30, 2024.

The Company's assets measured at estimated fair value on a recurring basis at June 30, 2025 and September 30, 2024, were as follows (dollars in thousands):

June 30, 2025 Estimated Fair Value

Level 1 Level 2 Level 3 Total

15 unchanged sentences

Total $ 4,805 $ 68,318 $ — $ 73,123

There were no transfers among Level 1, Level 2 and Level 3 during the six months ended March 31, 2025 and the year ended September 30, 2024.

There were no transfers among Level 1, Level 2 and Level 3 during the nine months ended June 30, 2025 and the year ended September 30, 2024.

The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis in accordance with GAAP.

9 unchanged sentences

The valuation of OREO and other repossessed assets is subject to significant external and internal judgment (Level 3).

The following table summarizes the balances of assets measured at estimated fair value on a non-recurring basis at March 31, 2025 and September 30, 2024 (dollars in thousands):

The following table summarizes the balances of assets measured at estimated fair value on a non-recurring basis at June 30, 2025 and September 30, 2024 (dollars in thousands):

Estimated Fair Value Total Estimated

March 31, 2025 Level 1 Level 2 Level 3 Fair Value

June 30, 2025 Level 1 Level 2 Level 3 Fair Value

Individually evaluated collateral-dependent loans:

8 unchanged sentences

Total $ — $ — $ 1,315 $ 1,315

The following table presents quantitative information about Level 3 inputs for financial instruments measured at fair value on a non-recurring basis as of March 31, 2025 and September 30, 2024:

The following table presents quantitative information about Level 3 inputs for financial instruments measured at fair value on a non-recurring basis as of June 30, 2025 and September 30, 2024:

Technique(s) Unobservable Input(s) Range

6 unchanged sentences

The disclosures also do not include estimated fair value amounts for certain items which are not defined as financial instruments but which may have significant value.

The Company does not believe that it would be practicable to estimate a fair value for these types of items as of March 31, 2025 and September 30, 2024.

The Company does not believe that it would be practicable to estimate a fair value for these types of items as of June 30, 2025 and September 30, 2024.

Because GAAP excludes certain items from fair value disclosure requirements, any aggregation of the fair value amounts presented would not represent the underlying value of the Company.

Additionally, the Company uses the exit price notion in calculating the fair values of financial instruments not measured at fair value on a recurring basis.

The recorded amounts and estimated fair values of financial instruments were as follows as of March 31, 2025 and September 30, 2024 (dollars in thousands):

March 31, 2025

The recorded amounts and estimated fair values of financial instruments were as follows as of June 30, 2025 and September 30, 2024 (dollars in thousands):

June 30, 2025

Fair Value Measurements Using:

46 unchanged sentences

The Company expects this ASU to only impact its disclosure requirements and does not expect the adoption of the ASU to have a material impact on its business operations or the Company's consolidated financial statements.

In January 2025, the FASB issued ASU 2025-01, Income Statement (Subtopic 220-40):

Income Statement-Reporting Comprehensive Income-Expense Disaggregations Disclosures:

Clarifying the effective Date .

The amendments in this ASU amend the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption of ASU 2025-01 is permitted.

Other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company's financial position, results of operations or cash flows.

3 unchanged sentences

Revenue reported as service charges on deposits, ATM and debit card interchange transaction fees, merchant services fees, non-deposit investment fees and escrow fees are within the scope of ASC 606.

All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized in non-interest income with the exce ption of gains on sales of OREO and gains on sales/disposition of premises and equipment, which are included in non-interest expense.

For the three months ended March 31, 2025, the Company recognized $ 959,000 in service charges on deposits, $ 1.18 million in ATM and debit card interchange transaction fees, $ 17,000 in escrow fees, and $ 1,000 in fee income from non-deposit investment sales included in "Other" on the consolidated statement of income, all considered within the scope of ASC 606.

For the six months ended March 31, 2025, the Company recognized $ 1.96 million in service charges on deposits, $ 2.44 million in ATM and debit card interchange transaction fees, $ 35,000 in escrow fees, and $ 2,000 in fee income from non-deposit investment sales.

For the three months ended March 31, 2024, the Company recognized $ 988,000 in service charges on deposits, $ 1.21 million in ATM and debit card interchange transaction fees, $ 15,000 in escrow fees, and $ 2,000 in fee income from non-deposit investment sales.

For the six months ended March 31, 2024, the Company recognized $ 2.01 million in service charges on deposits, $ 2.48 million in ATM and debit card interchange transaction fees, $ 33,000 in escrow fees, and $ 3,000 in fee income from non-deposit investment sales.

All of the Company's revenue from contracts with customers within the scope of ASC 606 is recognized in non-interest income with the exception of gains on sales of OREO and gains on sales/disposition of premises and equipment, which are included in non-interest expense.

For the three months ended June 30, 2025, the Company recognized $ 966,000 in service charges on deposits, $ 1.26 million in ATM and debit card interchange transaction fees, $ 32,000 in escrow fees, and $ 9,000 in fee income from non-deposit investment sales included in "Other" on the consolidated statement of income, all considered within the scope of ASC 606.

For the nine months ended June 30, 2025, the Company recognized $ 2.92 million in service charges on deposits, $ 3.71 million in ATM and debit card interchange transaction fees, $ 66,000 in escrow fees, and $ 12,000 in fee inco me from non-deposit investment sales.

For the three months ended June 30, 2024, the Company recognized $ 1.01 million in service charges on deposits, $ 1.30 million in ATM and debit card interchange transaction fees, $ 18,000 in escrow fees, and $ 3,000 in fee income from non-deposit investment sales.

For the nine months ended June 30, 2024, the Company recognized $ 3.02 million in service charges on deposits, $ 3.77 million in ATM and debit card interchange transaction fees, $ 51,000 in escrow fees, and $ 6,000 in fee income from non-deposit investment sales.

If a contract is determined to be within the scope of ASC 606, the Company recognizes revenue when it satisfies its performance obligation.

3 unchanged sentences

Non-transaction based fees such as account maintenance fees and monthly statement fees are considered to be provided to the customer under a day-to-day contract with ongoing renewals.

Revenue for these non-transaction fees are earned over the course of a month, representing the period over which the Company satisfies the performance

Revenue for these non-transaction fees are earned over the course of a month, representing the period over which the Company satisfies the performance obligation.

Transaction-based fees such as non-sufficient fund charges, stop payment charges and wire fees are recognized at the time the transaction is executed, as the contract duration does not extend beyond the service performed.

18 unchanged sentences

The Company evaluates each customer’s credit - worthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party.

The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit

evaluation of the party.

However, such loan to value ratios will subsequently change, based on increases and decreases in the supporting collateral values.

Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, land and income-producing commercial properties.

A summary of the Company's commitments at March 31, 2025 and 2024 are listed below (in thousands):

March 31, 2025 March 31, 2024

A summary of the Company's commitments at June 30, 2025 and 2024, are listed below (in thousands):

June 30, 2025 June 30, 2024

Undisbursed portion of construction loans in process (see Note 4) $ 76,272 $ 87,196

7 unchanged sentences

The ACL on unfunded commitments is recognized in other liabilities and accrued expenses in the consolidated balance sheets and is adjusted as a provision for (recapture of) credit losses on the consolidated income statements.

The ACL on unfunded loan commitments totaled $ 320,000 and $ 276,000 at March 31, 2025 and 2024, respectively

The following table sets forth information for the three and six months ended March 31, 2025 and 2024 regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

The ACL on unfunded loan commitments totaled $ 413,000 and $ 267,000 at June 30, 2025 and 2024, respectively

The following table sets forth information for the three and nine months ended June 30, 2025 and 2024 regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended June 30, 2025 Three Months Ended June 30, 2024

Beginning ACL $ 320 $ 276

1 unchanged sentence

Ending ACL $ 413 $ 267

*Amount differs from Income Statement due to rounding.

ACL Six Months Ended March 31, 2025 Six Months Ended March 31, 2024

ACL Nine Months Ended June 30, 2025 Nine Months Ended June 30, 2024

Beginning ACL $ 327 $ 332

2 unchanged sentences

Ending ACL $ 413 $ 267

*Amount differs from Income Statement due to rounding.

The Bank has an employee severance compensation plan which expires in 2027 that provides severance pay benefits to eligible employees in the event of a change in control of Timberland Bancorp or the Bank (as defined in the plan).

7 unchanged sentences

In the opinion of management, liabilities arising from these claims, if any, will not have a material effect on the future consolidated financial position of the Company.

(13) SUBSEQUENT EVENTS

On July 24, 2025, the Company learned of the passing of a former officer on which the Company has BOLI policies.

The Company is in the process of filing claims relating to these policies.

Based on initial information, the Company anticipates recording death benefit claim income of approximately $ 1.00 million during the September 30, 2025 quarter.

The transaction will be recorded once the insurance carriers have confirmed the final values of the policies.

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