What changed in this filing

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Item 1. Financial Statements

2026-08-07 compared with 2026-05-07 · 198 added, 198 removed, 986 unchanged (29% of the section changed)

3 unchanged sentences

CONSOLIDATED BALANCE SHEETS

March 31, 2026 and September 30, 2025

June 30, 2026 and September 30, 2025

(Dollars in thousands, except per share amounts)

38 unchanged sentences

CONSOLIDATED BALANCE SHEETS (continued)

March 31, 2026 and September 30, 2025

June 30, 2026 and September 30, 2025

(Dollars in thousands, except per share amounts)

7 unchanged sentences

50,000,000 shares authorized;

7,833,643 shares issued and outstanding - March 31, 2026 7,889,571 shares issued and outstanding - September 30, 2025

7,769,668 shares issued and outstanding - June 30, 2026 7,889,571 shares issued and outstanding - September 30, 2025

21,465 26,305

8 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME

For the three and six months ended March 31, 2026 and 2025

For the three and nine months ended June 30, 2026 and 2025

(Dollars in thousands, except per share amounts)

Three Months Ended March 31, Six Months Ended

Three Months Ended June 30, Nine Months Ended

2026 2025 2026 2025

18 unchanged sentences

Net recoveries on investment securities 23 2 39 9

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

Service charges on deposits 956 966 2,879 2,924

10 unchanged sentences

CONSOLIDATED STATEMENTS OF INCOME (continued)

For the three and six months ended March 31, 2026 and 2025

For the three and nine months ended June 30, 2026 and 2025

(Dollars in thousands, except per share amounts)

Three Months Ended March 31, Six Months Ended

Three Months Ended June 30, Nine Months Ended

2026 2025 2026 2025

29 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the three and six months ended March 31, 2026 and 2025

For the three and nine months ended June 30, 2026 and 2025

(Dollars in thousands)

Three Months Ended March 31 Six Months Ended

Three Months Ended June 30 Nine Months Ended

2026 2025 2026 2025

1 unchanged sentence

Net income $ 7,720 $ 7,100 $ 23,068 $ 20,715

Other comprehensive income (loss)

Unrealized holding gain (loss) on investment securities available for sale, net of income taxes of $( 32 ), $ 32 , $ 15 , and $( 183 ) respectively

Other comprehensive loss

Unrealized holding loss on investment securities available for sale, net of income taxes of $( 216 ), $( 28 ), $( 231 ), and $( 212 ) respectively

( 817 ) ( 105 ) ( 869 ) ( 795 )

Total other comprehensive income (loss), net of income taxes ( 117 ) 122 ( 52 ) ( 690 )

Total other comprehensive loss, net of income taxes ( 817 ) ( 105 ) ( 869 ) ( 795 )

Total comprehensive income $ 6,903 $ 6,995 $ 22,199 $ 19,920

3 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

For the three and six months ended March 31, 2026 and 2025

For the three and nine months ended June 30, 2026 and 2025

(Dollars in thousands, except per share amounts)

1 unchanged sentence

Compre-hensive

Income (Loss)

Number of Shares Amount Retained

Earnings Total

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

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

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

Balance, March 31, 2026 7,833,643 $ 23,982 $ 247,457 $ ( 350 ) $ 271,089

Balance, December 31, 2025 7,879,828 $ 26,025 $ 242,617 $ ( 233 ) $ 268,409

Net income — — 7,720 — 7,720

1 unchanged sentence

Repurchase of common stock, net of tax ( 70,000 ) ( 2,861 ) — — ( 2,861 )

Restricted stock grant forfeitures ( 200 ) — — — —

Exercise of stock options 6,225 155 — — 155

2 unchanged sentences

Stock-based compensation expense — 189 — — 189

Balance, March 31, 2026 7,833,643 $ 23,982 $ 247,457 $ ( 350 ) $ 271,089

Balance, June 30, 2026 7,769,668 $ 21,465 $ 252,908 $ ( 1,167 ) $ 273,206

Common Stock Accumulated

Compre-hensive

Income (Loss)

Number of Shares Amount Retained

9 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

Balance, September 30, 2025 7,889,571 $ 26,305 $ 236,607 $ ( 298 ) $ 262,614

7 unchanged sentences

Stock-based compensation expense — 534 — — 534

Balance, March 31, 2026 7,833,643 $ 23,982 $ 247,457 $ ( 350 ) $ 271,089

Balance, June 30, 2026 7,769,668 $ 21,465 $ 252,908 $ ( 1,167 ) $ 273,206

See notes to unaudited consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended March 31, 2026 and 2025

For the nine months ended June 30, 2026 and 2025

(Dollars in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

Cash flows from operating activities

3 unchanged sentences

Depreciation 1,100 1,131

Deferred income taxes ( 82 ) ( 73 )

Accretion of discount on purchased loans ( 27 ) ( 92 )

1 unchanged sentence

Stock-based compensation expense 534 393

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

Net recoveries on investment securities ( 39 ) ( 9 )

10 unchanged sentences

Cash flows from investing activities

Net decrease in CDs held for investment 1,245 1,498

Net (increase) decrease in CDs held for investment ( 747 ) 1,747

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

Purchase of investment securities held to maturity ( 3,935 ) ( 5,413 )

Purchase of investment securities available for sale ( 27,881 ) ( 40,576 )

1 unchanged sentence

Proceeds from maturities and prepayments of investment securities available for sale 14,869 12,387

Purchase of FHLB stock ( 58 ) ( 8 )

Decrease in loans receivable, net 12,461 1,059

Redemption (purchase) of FHLB stock 392 ( 8 )

Increase in loans receivable, net ( 33,045 ) ( 20,744 )

Purchase of premises and equipment ( 1,565 ) ( 1,135 )

Net cash provided by investing activities 19,029 20,109

Purchase of BOLI policies ( 15,000 ) —

Net cash used in investing activities ( 43,279 ) ( 3,924 )

S ee notes to unaudited consolidated financial statements

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

For the six months ended March 31, 2026 and 2025

For the nine months ended June 30, 2026 and 2025

(Dollars in thousands)

Six Months Ended March 31,

Nine Months Ended June 30,

Cash flows from financing activities

Net increase in deposits $ 46,914 $ 21,809

Repayment of FHLB borrowings ( 10,000 ) —

Proceeds from exercise of stock options 1,594 817

1 unchanged sentence

Payment of dividends ( 6,767 ) ( 6,033 )

Net cash provided by (used in) financing activities 19,409 ( 2,924 )

Net cash provided by financing activities 24,773 12,747

Net increase in cash and cash equivalents 2,654 28,899

8 unchanged sentences

Loans transferred to OREO and other repossessed assets $ — $ 221

Operating lease liabilities arising from recording of ROU assets $ 1,487 $ —

See notes to unaudited consolidated financial statements

8 unchanged sentences

All such adjustments are of a normal recurring nature.

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, 2025 (“2025 Form 10-K”).

The unaudited consolidated results of operations for the six months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2026.

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 fiscal year ended September 30, 2025 (“2025 Form 10-K”).

The unaudited consolidated results of operations for the nine months ended June 30, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending September 30, 2026.

(b) Principles of Consolidation:

11 unchanged sentences

Actual results could differ from those estimates.

(e) Certain prior period amounts have been reclassified to conform to the March 31, 2026 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, 2026 presentation with no change to previously reported net income or total shareholders’ equity.

Timberland Bancorp, Inc.

2 unchanged sentences

(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, 2026 and September 30, 2025 (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, 2026 and September 30, 2025 (dollars in thousands):

Losses Estimated

Fair Value Allowance for Credit Losses

March 31, 2026

June 30, 2026

Held to Maturity

4 unchanged sentences

Private label residential 13,718 174 ( 836 ) 13,056 30

Municipal securities 605 1 — 606 —

Total $ 117,587 $ 213 $ ( 4,557 ) $ 113,243 $ 30

March 31, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

June 30, 2026 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value

Available for Sale

15 unchanged sentences

Total $ 78,617 $ 382 $ ( 759 ) $ 78,240

Held to maturity and available for sale investment securities with unrealized losses were as follows as of March 31, 2026 (dollars in thousands):

Held to maturity and available for sale investment securities with unrealized losses were as follows as of June 30, 2026 (dollars in thousands):

Less Than 12 Months 12 Months or Longer Total

27 unchanged sentences

$ 15,899 $ ( 67 ) 4 $ 28,947 $ ( 692 ) 24 $ 44,846 $ ( 759 )

During the six months ended March 31, 2026, the Company recorded a $ 3,000 net realized loss on 14 held to maturity investment securities, all of which had been recognized previously as a credit loss.

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 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 $ 196.29 million and $ 195.93 million at March 31, 2026 and September 30, 2025, respectively.

The contractual maturities of investment securities at March 31, 2026 were as follows (dollars in thousands).

During the nine months ended June 30, 2026, the Company recorded a $ 22,000 net realized gain on 15 held to maturity investment securities, all of which had been recognized previously as a credit loss.

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 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 to taled $ 197.68 million and $ 195.93 million at June 30, 2026 and September 30, 2025, respectively.

The contractual maturities of investment securities at June 30, 2026 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, 2026 or September 30, 2025.

The Company did not record an ACL on any available for sale investment securities at June 30, 2026 or September 30, 2025.

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.

The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields for such securities decline.

The Company does not believe that these securities are impaired because of their credit quality or related to any issuer or industry specific event.

The Company has the ability and intent to hold the investments until the fair value recovers.

The Company expects the fair value of these securities to recover as the securities approach their maturity dates or sooner if market yields decline.

The Company does not believe that the unrealized losses are attributed to credit deterioration or issuer or industry specific events.

The Company has the ability and intent to hold the investments until their fair value recovers.

Held to Maturity Investment Securities

1 unchanged sentence

government agency and U.S.

government mortgage-backed securities, private label mortgage-backed securities, municipal, and other bonds.

The Company’s agency and mortgage-backed securities that are issued by U.S.

government entities and agencies are either explicitly or implicitly guaranteed by the U.S.

government, are highly rated by major rating agencies, and have a long history of no credit losses.

government mortgage-backed securities, private label mortgage-backed securities, municipal securities, and other bonds.

The Company’s agency and mortgage-backed securities are issued by U.S.

government entities and agencies and are either explicitly or implicitly guaranteed by the U.S.

government, are highly rated by the major rating agencies, and have a long history of no credit losses.

As such, no ACL has been established for these securities.

The ACL on the private label mortgage-backed securities, municipal, and other bonds within the held to maturity securities portfolio is calculated using the probability of default/loss given default ("PD/LGD") method.

The ACL on the private label mortgage-backed securities, municipal securities, and other bonds within the held to maturity securities portfolio is calculated using the probability of default/loss given default ("PD/LGD") method.

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

At March 31, 2026 and September 30, 2025, the ACL on the held to maturity securities portfolio totale d $ 31,000 and $ 36,000 , respectively.

The following tables set forth information for the three and six months ended March 31, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

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

At June 30, 2026 and September 30, 2025, the ACL on the held to maturity securities portfolio t otaled $ 30,000 and $ 36,000 , respectively.

The following tables set forth information for the three and nine months ended June 30, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

Beginning Allowance Recapture of Credit Losses Ending Allowance Beginning Allowance Recapture of Credit Losses Ending Allowance

Held to Maturity

2 unchanged sentences

Total $ 31 $ ( 1 ) $ 30 $ 50 $ ( 4 ) $ 46

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

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

Nine Months Ended June 30, 2026 Nine Months Ended June 30, 2025

Beginning Allowance Recapture of Credit Losses Ending Allowance Beginning Allowance Recapture of Credit Losses Ending Allowance

Held to Maturity

5 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 $ 276,000 a t March 31, 2026 and is included in accrued interest receivable on the consolidated balance sheet.

Accrued interest receivable on held to maturity investment securities totaled $ 321,000 a t June 30, 2026 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 ha d $ 30,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at March 31, 2026.

The Company ha d $ 29,000 of private label mortgage-backed held to maturity investment securities in non-accrual status at June 30, 2026.

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, 2026 and September 30, 2025, by credit quality indicator (dollars in thousands):

The following tables set forth the Company's held to maturity investment securities at June 30, 2026 and September 30, 2025, by credit quality indicator (dollars in thousands):

Credit Ratings

As of March 31, 2026 AAA/AA/A BBB/BB/B Unrated Total

As of June 30, 2026 AAA/AA/A BBB/BB/B Unrated Total

Held to Maturity

3 unchanged sentences

Private label residential 9,615 — 4,103 13,718

Municipal securities 605 — — 605

Total held to maturity $ 113,484 $ — $ 4,103 $ 117,587

14 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, 2026 and 2025 (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, 2026 and 2025 (dollars in thousands):

Nine Months Ended

Beginning balance of credit loss $ 788 $ 803

4 unchanged sentences

(3) GOODWILL AND CDI

Goodwill is initially recorded when the purchase price paid in a business combination exceeds the estimated fair value of the net identified tangible and intangible assets acquired and liabilities assumed.

Goodwill is initially recorded when the purchase price paid in a business combination exceeds the estimated fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed.

Goodwill is presumed to have an indefinite useful life and is analyzed annually for impairment.

The Company performs an annual review during the third quarter of each fiscal year, or more frequently if indicators of potential impairment exist, to determine if the recorded goodwill is impaired.

The Company performs an annual review during the third quarter of each fiscal year, or more frequently if indicators of potential impairment exist, to determine if goodwill is impaired.

For purposes of goodwill impairment testing, the services offered through the Bank and its subsidiary are managed as one strategic unit and represent the Company's only reporting unit.

An assessment of qualitative factors is completed to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

If the qualitative analysis concludes that further analysis is required, then a quantitative impairment test would be completed.

If the qualitative analysis concludes that further analysis is required, then a quantitative impairment test is completed.

The quantitative goodwill impairment test is used to identify the existence of impairment and the amount of impairment loss and compares the reporting unit’s estimated fair value, including goodwill, to its carrying amount.

If the fair value exceeds the carrying amount, then goodwill is not considered impaired.

If the carrying amount exceeds its fair value, an impairment loss would be recognized equal to the amount of excess, limited to the amount of total goodwill allocated to that reporting unit.

The Company performed its fiscal year 2025 goodwill impairment test during the quarter ended June 30, 2025.

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, 2026, 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.

If the fair value exceeds the carrying amount, goodwill is not considered impaired.

If the carrying amount exceeds its fair value, an impairment loss is recognized equal to the amount of the excess, limited to the amount of goodwill allocated to that reporting unit.

The Company performed its fiscal year 2026 goodwill impairment test during the quarter ended June 30, 2026 with the assistance of an independent third-party firm specializing in goodwill impairment valuations for financial institutions.

Based on this assessment, the Company determined that it is not "more likely than not" that the Company's reporting unit's fair value is less than its carrying amount, and, therefore, goodwill was determined not to be impaired at May 31, 2026.

As of June 30, 2026, management believes that there have been no events or changes in the circumstances since May 31, 2026 that would indicate a potential impairment of goodwill.

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

If adverse economic conditions or any decreases in the Company's stock price and market capitalization were deemed to be other than temporary, it may significantly affect the fair value of the Company's goodwill and may trigger impairment charges.

If adverse economic conditions or decreases in the Company's stock price and market capitalization were deemed to be other than temporary, they may significantly affect the fair value of the Company's reporting unit and may trigger impairment charges.

Any impairment charge could have a material adverse effect on the Company's results of operations and financial condition.

CDI represents the future economic benefit of the potential cost savings from acquiring core deposits as part of a business combination compared to the cost of alternative funding sources.

CDI is amortized to non-interest expense using an accelerated method based on an estimated runoff of related deposits over a period of ten years.

CDI is amortized to non-interest expense using an accelerated method based on the estimated runoff of related deposits over a period of ten years.

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, 2026, 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, 2026, management believes that there have been no events or changes in 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, 2026 and September 30, 2025 (dollars in thousands):

Loans receivable by portfolio segment consisted of the following at June 30, 2026 and September 30, 2025 (dollars in thousands):

2026 September 30,

26 unchanged sentences

__________________

(1) Does not include one- to four-family loans held for sale totaling $ 1.64 million and $ 1.13 million at March 31, 2026 and September 30, 2025, respectively.

Loans receivable at March 31, 2026 and September 30, 2025, are reported net of unamortized discounts totaling $ 33,000 and $ 51,000 , respectively.

(1) Does not include one- to four-family loans held for sale totaling $ 2.77 million and $ 1.13 million at June 30, 2026 and September 30, 2025, respectively.

Loans receivable at June 30, 2026 and September 30, 2025, are reported net of unamortized discounts totaling $ 25,000 and $ 51,000 , respectively.

Credit Quality Indicators

The Company uses credit risk grades which reflect the Company’s assessment of a loan’s risk or loss potential.

The Company categorizes loans into risk grade categories based on relevant information about the ability of borrowers to service their debt such as:

current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors such as the estimated fair value of the collateral.

The Company uses the following definitions for credit risk ratings as part of the on-going monitoring of the credit quality of its loan portfolio:

Pass loans are defined as those loans that meet acceptable quality underwriting standards.

Watch loans are defined as those loans that still exhibit acceptable quality, but have some concerns that justify greater attention.

The Company uses credit risk grades that reflect the Company’s assessment of a loan’s risk or loss potential.

The Company categorizes loans into risk grade categories based on relevant information about the ability of borrowers to service their debt, including current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors such as the estimated fair value of the collateral.

The Company uses the following definitions for credit risk ratings as part of the ongoing monitoring of the credit quality of its loan portfolio:

Pass loans are defined as loans that meet acceptable quality underwriting standards.

Watch loans are defined as loans that still exhibit acceptable quality, but have some concerns that justify greater attention.

If these concerns are not corrected, a potential for further adverse categorization exists.

1 unchanged sentence

Special Mention:

Special mention loans are defined as those loans deemed by management to have some potential weaknesses that deserve management’s close attention.

Special mention loans are defined as loans deemed by management to have some potential weaknesses that deserve management’s close attention.

If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the loan.

Substandard loans are defined as those loans that are inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged.

Substandard loans are defined as loans that are inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged.

Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt.

If the weakness or weaknesses are not corrected, there is the distinct possibility that some loss will be sustained.

If the weakness or weaknesses are not corrected, there is a distinct possibility that some loss will be sustained.

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, 2026, no loans were classified as doubtful.

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

At June 30, 2026, no loans were classified as doubtful.

At September 30, 2025, there was one loan classified as doubtful which was 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, 2026 and September 30, 2025, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at March 31, 2026 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):

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

At June 30, 2026 and September 30, 2025, there were no loans classified as loss.

The following table sets forth the Company's loan portfolio at June 30, 2026 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

12 unchanged sentences

Watch — — 767 — — 12,204 — 12,971

Special Mention — — — — — 30 — 30

Substandard — — — — 224 4,310 — 4,534

5 unchanged sentences

Watch — 2,860 5,244 4,060 1,719 — — 13,883

Substandard — — — — 553 — — 553

Total construction-custom & owner/builder $ 18,681 $ 39,042 $ 5,244 $ 4,060 $ 1,719 $ — $ — $ 68,746

13 unchanged sentences

Watch — — 248 — 294 432 — 974

Substandard — — 108 — — — — 108

Total land $ 9,731 $ 7,562 $ 8,558 $ 2,214 $ 4,850 $ 4,122 $ 379 $ 37,416

13 unchanged sentences

Watch — — — — — 269 1,389 1,658

Special Mention — — — — — 281 — 281

Substandard — — — 159 134 383 944 1,620

Total commercial business $ 7,211 $ 12,060 $ 11,458 $ 12,645 $ 22,660 $ 11,744 $ 41,074 $ 118,852

Pass $ — $ — $ — $ — $ — $ 5 $ — $ 5

Total SBA PPP $ — $ — $ — $ — $ — $ 5 $ — $ 5

Total loans receivable, gross (1)

84 unchanged sentences

The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost.

The ACL is evaluated and calculated on a collective basis for those loans which share similar risk characteristics.

For loans that do not share similar risk characteristics and cannot be evaluated on a collective basis, the Company will evaluate the loan individually.

The Company estimates the expected credit losses over the loans' contractual terms, adjusted for expected prepayments.

The ACL is evaluated and calculated on a collective basis for loans that share similar risk characteristics.

For loans that do not share similar risk characteristics and cannot be evaluated on a collective basis, the Company evaluates the loan individually.

The Company estimates expected credit losses over the loans' contractual terms, adjusted for expected prepayments.

The ACL is calculated for loan segments utilizing loan level information and relevant information from internal and external sources related to past events and current conditions.

Management has adopted the discounted cash flow ("DCF") methodology for all segments.

The Company incorporates a reasonable and supportable forecast that utilizes current period national gross domestic product ("GDP") and national unemployment figures.

Each of the loan segments are impacted by those factors.

Prepayment rates are established for each segment based on historical averages for the segments, which management believes is an accurate presentation of future prepayment activity.

The Company incorporates a reasonable and supportable forecast using current period national gross domestic product ("GDP") and national unemployment figures.

All loan segments are impacted by those factors.

Prepayment rates are established for each segment based on historical averages, which management believes is representative of future prepayment activity.

Loans that are evaluated individually are not included in the collective analysis.

The ACL on loans that are evaluated individually may be estimated based on their expected cash flows, or in the case of loans for which repayment is expected substantially through the operation or sale of collateral when the borrower is experiencing financial difficulty, may be measured based on the fair value of the collateral less estimated selling costs.

The ACL on loans that are evaluated individually may be estimated based on their expected cash flows, or in the case of loans for which repayment is expected substantially through the operation or sale of collateral when the borrower is experiencing financial difficulty, is measured based on the fair value of the collateral less estimated selling costs.

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the ACL.

4 unchanged sentences

Management's evaluation of the ACL is based on ongoing, quarterly assessments of the known and inherent risks in the loan portfolio.

Loss factors are based on the Company's historical loss experience with additional consideration and adjustments made for changes in economic conditions, changes in the amount and composition of the loan portfolio, delinquency rates, changes in collateral values, seasoning of the loan portfolio, duration of the current business cycle, a detailed analysis of individually evaluated loans and other factors as deemed appropriate.

Management also assesses the risk related to reasonable and supportable forecasts that are used.

Management also assesses the risk related to the reasonable and supportable forecasts.

These factors are evaluated on a quarterly basis.

Loss rates used by the Company are affected as changes in these factors increase or decrease from quarter to quarter.

Loss rates used by the Company are affected by changes in these factors from quarter to quarter.

In addition, regulatory agencies, as an 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, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended March 31, 2026

The following tables set forth information for the three and nine months ended June 30, 2026 and 2025 regarding activity in the ACL by portfolio segment (dollars in thousands):

Three Months Ended June 30, 2026

Allowance Provision for

16 unchanged sentences

Total $ 18,648 $ 600 $ — $ 1 $ 19,249

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Allowance Provision for

16 unchanged sentences

Total $ 17,525 $ 351 $ — $ 2 $ 17,878

Six Months Ended March 31, 2026

Nine Months Ended June 30, 2026

Allowance Provision for

16 unchanged sentences

Total $ 18,091 $ 1,140 $ — $ 18 $ 19,249

Six Months Ended March 31, 2025

Nine Months Ended June 30, 2025

Allowance Provision for

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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, 2026 and September 30, 2025 (dollars in thousands):

The following tables present an analysis of loans by aging category and portfolio segment at June 30, 2026 and September 30, 2025 (dollars in thousands):

Past Due 60-89

3 unchanged sentences

Past Due Current Total

March 31, 2026

June 30, 2026

Mortgage loans:

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Commercial business loans — 134 1,620 — 1,754 117,098 118,852

SBA PPP loans — — — — — 5 5

Total $ 18 $ 134 $ 8,556 $ — $ 8,708 $ 1,511,591 $ 1,520,299

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(2) Net of construction LIP.

At March 31, 2026, the Company had $ 5.51 million of non-accrual loans with an ACL of $ 1.03 million and $ 3.89 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 March 31, 2026 (in thousands):

At June 30, 2026, the Company had $ 5.53 million of non-accrual loans with an ACL of $ 1.03 million and $ 3.03 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, 2026 (in thousands):

Recorded Investment Related ACL

2 unchanged sentences

Commercial real estate 4,534 480

Construction - custom and owner/builder 553 —

Consumer loans:

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Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the ACL for loans is adjusted by the same amount.

The ACL on modified loans is measured using the same credit loss estimation methods used to determine the ACL of all other loans held for investment.

The ACL on modified loans is measured using the same credit loss estimation methods used to determine the ACL for all other loans held for investment.

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 that were experiencing financial difficulty and modified during the six months ended March 31, 2026, by loan class and modification type (dollars in thousands):

The following tables present the amortized cost basis of loans that were experiencing financial difficulty and modified during the nine months ended June 30, 2026, by loan class and modification type (dollars in thousands):

Term Extension

March 31, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

June 30, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

Home Equity and Second Mortgage $ 54 0.10 % Loan extended five years .

Combination - Term Extension and Interest and Payment Modification

March 31, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

June 30, 2026 Amortized Cost Basis % of Total Loan Type Financial Effect

Commercial Business Loan $ 2 — % Loan extended 18 months, interest rate increased and loan payment decreased.

All loans modified during the past twelve months are performing according to modified terms.

The following tables present the amortized cost basis of loans that were 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 that were 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.

At March 31, 2026, the Company had operating leases for three retail bank branch offices and an administrative office.

The Company's leases have remaining terms ranging from one to 24 years, and include options to extend the leases for up to a total of fifteen years .

At June 30, 2026, the Company had operating leases for three retail bank branch offices and an administrative office.

The Company's leases have remaining terms ranging from three to 24 years, and include options to extend the leases for up to a total of fifteen 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 extension 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) for the three months ended March 31, 2026 and 2025 were as follows (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) for the three and nine months ended June 30, 2026 and 2025 were as follows (dollars in thousands):

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

2026 2025 2026 2025

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Total lease cost $ 147 $ 87 $ 404 $ 284

The following table provides supplemental information related to operating leases at or for the three and six months ended March 31, 2026 and 2025 (dollars in thousands):

At or For the Three Months Ended March 31, 2026 At or For the Six Months Ended March 31, 2026

The following table provides supplemental information related to operating leases at or for the three and nine months ended June 30, 2026 and 2025 (dollars in thousands):

At or For the Three Months Ended June 30, 2026 At or For the Nine Months Ended June 30, 2026

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

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Weighted average discount rate-operating leases 4.22 % 4.22 %

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

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:

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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, 2026 for future fiscal years are as follows (dollars in thousands):

Maturities of operating lease liabilities at June 30, 2026 for future fiscal years are as follows (dollars in thousands):

Remainder of Fiscal 2026 $ 123

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(6) NET INCOME PER COMMON SHARE

Basic net income per common share is computed by dividing net income to common shareholders by the weighted average number of common shares outstanding during the period, without considering any dilutive items.

Nonvested shares of restricted stock are included in the computation of basic earnings per share because the holder has voting rights and shares in non-forfeitable dividends during the vesting period.

Diluted net income per common share is computed by dividing net income to common shareholders by the weighted average number of common shares and common stock equivalents for items that are dilutive, net of shares assumed to be repurchased using the treasury stock method at the average share price for the Company’s common stock during the period.

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, 2026 and 2025, is as follows (dollars in thousands, except per share amounts):

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

Basic net income per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, without considering any dilutive items.

Nonvested shares of restricted stock are included in the computation of basic earnings per share because the holder has voting rights and participates in non-forfeitable dividends during the vesting period.

Diluted net income per common share is computed by dividing net income available to common shareholders by the weighted average number of common shares and common stock equivalents outstanding for items that are dilutive, net of shares assumed to be repurchased using the treasury stock method at the average share price for the Company’s common stock during the period.

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

Information regarding the calculation of basic and diluted net income per common share for the three and nine months ended June 30, 2026 and 2025, is as follows (dollars in thousands, except per share amounts):

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

2026 2025 2026 2025

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____________________________________________

(1) For the three and six months ended March 31, 2026, average options to purchase 0 and 505 shares of common stock, respectively, were outstanding but not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

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 earnings per common share because their effect would have been anti-dilutive.

(1) For the three months ended June 30, 2026, all outstanding options were included in the computation of diluted earnings per common share.

For the nine months ended June 30, 2026, average options to purchase 273 shares of common stock were outstanding but were not included in the computation of diluted earnings per common share because their effect would have been anti-dilutive.

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 were not included in the computation of diluted earnings 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, 2026 and 2025, are as follows (dollars in thousands):

Three Months Ended Six Months Ended

March 31, 2026 March 31, 2025 March 31, 2026 March 31, 2025

The changes in accumulated other comprehensive income (loss) ("AOCI") by component during the three and nine months ended June 30, 2026 and 2025, are as follows (dollars in thousands):

Three Months Ended Nine Months Ended

June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025

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

Balance of AOCI at the beginning of period $ ( 350 ) $ ( 670 ) $ ( 298 ) $ 20

Other comprehensive income (loss) ( 117 ) 122 ( 52 ) ( 690 )

Other comprehensive (loss) ( 817 ) ( 105 ) ( 869 ) ( 795 )

Balance of AOCI at the end of period $ ( 1,167 ) $ ( 775 ) $ ( 1,167 ) $ ( 775 )

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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, 2026, 132,935 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock.

At June 30, 2026, 133,135 shares of common stock remained available for further issuance under the 2019 Plan, either as stock options or restricted stock awards.

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, 2026, there were 89,375 options outstanding to purchase that had been previously granted under the 2014 Plan, of which 77,775 were vested and 11,600 were unvested.

Stock option activity for the six months ended March 31, 2026 and 2025, is summarized as follows:

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

As of June 30, 2026, there were 85,750 options outstanding to purchase shares of common stock that had been previously granted under the 2014 Plan, of which 74,150 were vested and 11,600 were unvested.

Stock option activity for the nine months ended June 30, 2026 and 2025, is summarized as follows:

Nine Months Ended June 30, 2026 Nine Months Ended June 30, 2025

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, 2026 and 2025.

The aggregate intrinsic value of options exercised during the six months ended March 31, 2026 and 2025 was $ 643,000 and $ 386,000 , respectively.

At March 31, 2026, there were 33,200 unvested options with an aggregate grant date fair value of $ 221,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at March 31, 2026 was $ 388,000 .

There were 300 options that vested during the six months ended March 31, 2026 with a total fair value of $ 2,056 .

At March 31, 2025, there were 71,230 unvested options with an aggregate grant date fair value of $ 431,000 .

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

Additional information regarding options outstanding at March 31, 2026, is as follows:

There were no stock options granted during the nine months ended June 30, 2026 and 2025.

The aggregate intrinsic value of options exercised during the nine months ended June 30, 2026 and 2025 was $ 747,000 and $ 487,000 , respectively.

At June 30, 2026, there were 33,200 unvested options with an aggregate grant date fair value of $ 221,000 , all of which the Company assumes will vest.

The aggregate intrinsic value of unvested options at June 30, 2026 was $ 567,000 .

There were 300 options that vested during the nine months ended June 30, 2026 with a total fair value of $ 2,056 .

At June 30, 2025, there were 69,430 unvested options with an aggregate grant date fair value of $ 421,000 .

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

Additional information regarding options outstanding at June 30, 2026, is as follows:

Options Outstanding Options Exercisable

8 unchanged sentences

152,050 $ 26.35 4.4 118,850 $ 25.96 3.9

The aggregate intrinsic value of options outstanding at March 31, 2026 and 2025, was $ 2.08 million and $ 1.20 million , respectively.

As of March 31, 2026, unrecognized compensation cost related to unvested stock options was $ 168,000 , which is expected to be recognized over a weighted average period of 1.01 years.

There were no restricted stock awards granted during the six months ended March 31, 2026 and 2025.

The following table presents the activity related to restricted stock for the six months ended March 31, 2026 and 2025:

Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

The aggregate intrinsic value of options outstanding at June 30, 2026 and 2025, was $ 2.81 million and $ 1.33 million , respectively.

As of June 30, 2026, unrecognized compensation cost related to unvested stock options was $ 127,000 , which is expected to be recognized over a weighted average period of 0.92 years.

There were no restricted stock awards granted during the nine months ended June 30, 2026 and 2025.

The following table presents the activity related to restricted stock for the nine months ended June 30, 2026 and 2025:

Nine Months Ended June 30, 2026 Nine Months Ended June 30, 2025

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, 2026, unrecognized compensation cost related to unvested restricted stock awards was $ 1.91 million, which is expected to be recognized over a weighted average period of 2.30 years.

At June 30, 2026, unrecognized compensation cost related to unvested restricted stock awards was $ 1.71 million, which is expected to be recognized over a weighted average period of 2.25 years.

(9) FAIR VALUE MEASUREMENTS

Fair value is defined under GAAP as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

GAAP requires that valuation techniques maximize the use of observable inputs and

minimize the use of unobservable inputs.

GAAP requires that valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs.

GAAP also establishes a fair value hierarchy which prioritizes the valuation inputs into three levels.

3 unchanged sentences

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.

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

The Company's assets measured at fair value on a recurring basis consist of investment securities available for sale and investments in equity securities.

1 unchanged sentence

The estimated fair values of mutual funds are based upon quoted market prices (Level 1).

The Company had no liabilities measured at fair value on a recurring basis at March 31, 2026 and September 30, 2025.

The Company's assets measured at estimated fair value on a recurring basis at March 31, 2026 and September 30, 2025, were as follows (dollars in thousands):

March 31, 2026 Estimated Fair Value

The Company had no liabilities measured at fair value on a recurring basis at June 30, 2026 and September 30, 2025.

The Company's assets measured at estimated fair value on a recurring basis at June 30, 2026 and September 30, 2025, were as follows (dollars in thousands):

June 30, 2026 Estimated Fair Value

Level 1 Level 2 Level 3 Total

12 unchanged sentences

Total $ 5,832 $ 73,272 $ — $ 79,104

There were no transfers among Level 1, Level 2 and Level 3 during the six months ended March 31, 2026 and the year ended September 30, 2025.

There were no transfers among Level 1, Level 2 and Level 3 during the nine months ended June 30, 2026 and the year ended September 30, 2025.

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.

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OREO and other repossessed assets are recorded at estimated fair value less estimated costs to sell.

Estimated fair value is generally determined by management based on a number of factors, including third-party appraisals of estimated fair value in an orderly sale.

Estimated fair value is generally determined by management based on a number of factors, including

third-party appraisals of estimated fair value in an orderly sale.

Estimated costs to sell are based on standard market factors.

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, 2026 and September 30, 2025 (dollars in thousands):

The following table summarizes the balances of assets measured at estimated fair value on a non-recurring basis at June 30, 2026 and September 30, 2025 (dollars in thousands):

Estimated Fair Value Total Estimated

March 31, 2026 Level 1 Level 2 Level 3 Fair Value

June 30, 2026 Level 1 Level 2 Level 3 Fair Value

Individually evaluated collateral-dependent loans:

Mortgage loans:

Commercial $ — $ — $ 3,830 $ 3,830

Commercial real estate $ — $ — $ 3,830 $ 3,830

Commercial business loans — — 667 667

9 unchanged sentences

Total $ — $ — $ 398 $ 398

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, 2026 and September 30, 2025:

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, 2026 and September 30, 2025:

Technique(s) Significant Unobservable Input(s) Range

5 unchanged sentences

In addition, as the Company normally intends to hold the majority of its financial instruments until maturity, it does not expect to realize many of the estimated amounts disclosed.

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, 2026 and September 30, 2025.

The disclosures also do not include estimated fair value amounts for certain items that 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 June 30, 2026 and September 30, 2025.

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, 2026 and September 30, 2025 (dollars in thousands):

March 31, 2026

The recorded amounts and estimated fair values of financial instruments were as follows as of June 30, 2026 and September 30, 2025 (dollars in thousands):

June 30, 2026

Fair Value Measurements Using:

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(10) RECENT ACCOUNTING PRONOUNCEMENTS

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board ("FASB") issued accounting standard update ("ASU") 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The amendments in this ASU are intended to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income tax paid information.

The ASU requires

disclosure in the rate reconciliation of specific categories as well as additional information for reconciling items that meet a quantitative threshold.

The amendments in this ASU are intended to provide more transparency about income tax information through improvements to income tax disclosures primarily related to the rate

reconciliation and income tax paid information.

The ASU requires disclosure in the rate reconciliation of specific categories as well as additional information for reconciling items that meet a quantitative threshold.

The amendment requires on an annual basis a reconciliation broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

2 unchanged sentences

An entity should apply the amendments in this ASU on a prospective basis.

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

The Company will adopt ASU 2023-09 in its annual consolidated financial statements for the fiscal year ending September 30, 2026.

The adoption of this ASU is expected to affect disclosure requirements only.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220):

7 unchanged sentences

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.

The amendments in this ASU amend the effective date for 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.

1 unchanged sentence

The ASU expands the use of the gross-up method for accounting for certain acquired loans, specifically purchased seasoned loans ("PSLs").

This methods allows entities to recognize an allowance for credit losses at the acquisition date, which is added to the asset's amortized cost basis.

This method allows entities to recognize an allowance for credit losses at the acquisition date, which results in the asset's amortized cost basis.

The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

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Revenue reported as service charges on deposits, ATM and debit card interchange transaction 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 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 March 31, 2026, the Company recognized $ 934,000 in service charges on deposits, $ 1.13 million in ATM and debit card interchange transaction fees, $ 28,000 in escrow fees, and $ 12,000 in fee income from non-deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

For the six months ended March 31, 2026, the Company recognized $ 1.92 million in service charges on deposits, $ 2.33 million in ATM and debit card interchange transaction fees, $ 52,000 in escrow fees, and $ 36,000 in fee income from non-

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 premis es and equipment, which are included in non-interest expense.

For the three months ended June 30, 2026, the Company recognized $ 956,000 in service charges on deposits, $ 1.19 million in ATM and debit card interchange transaction fees, $ 42,000 in escrow fees, and $ 17,000 in fee income from non-deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

For the nine months ended June 30, 2026, the Company recognized $ 2.88 million in service charges on deposits, $ 3.52 million in ATM and debit card interchange transaction fees, $ 94,000 in escrow fees, and $ 53,000 in fee income from non-

deposit investment sales included in "Other, net" in non-interest income on the consolidated statement of income, all considered within the scope of ASC 606.

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.

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 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.

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 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.

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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, 2026 and 2025, are listed below (in thousands):

March 31, 2026 March 31, 2025

A summary of the Company's commitments at June 30, 2026 and 2025, are listed below (in thousands):

June 30, 2026 June 30, 2025

Undisbursed portion of construction loans in process (see Note 4) $ 100,275 $ 76,272

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 $ 386,000 and $ 320,000 at March 31, 2026 and 2025, respectively

The following table sets forth information for the three and six months ended March 31, 2026 and 2025, regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended March 31, 2026 Three Months Ended March 31, 2025

The ACL on unfunded loan commitments totaled $ 295,000 and $ 413,000 at June 30, 2026 and 2025, respectively

The following table sets forth information for the three and nine months ended June 30, 2026 and 2025, regarding activity in the ACL on unfunded loan commitments (dollars in thousands):

Three Months Ended June 30, 2026 Three Months Ended June 30, 2025

Beginning ACL $ 386 $ 320

1 unchanged sentence

Ending ACL $ 295 $ 413

ACL Six Months Ended March 31, 2026 Six Months Ended March 31, 2025

ACL Nine Months Ended June 30, 2026 Nine Months Ended June 30, 2025

Beginning ACL $ 432 $ 327

1 unchanged sentence

Ending ACL $ 295 $ 413

*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

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