Note 7: Derivative and Other Financial Instruments With Off-balance Sheet Risks: Commitments on Undisbursed Funds Held for Investment Policy (Policies)

12 Months Ended

Sep. 30, 2012

Policies

Commitments on Undisbursed Funds Held for Investment Policy

In accordance with ASC 815, “Derivatives and Hedging,” and interpretations of the Derivatives Implementation Group of the FASB, the fair value of the commitments to extend credit on loans to be held for sale, loan sale commitments, to be announced (“TBA”) MBS trades, put option contracts and call option contracts are recorded at fair value on the Condensed Consolidated Statements of Financial Condition.  At September 30, 2012, $8.4 million was included in other assets and $6.0 million was included in other liabilities; at June 30, 2012, $4.0 million was included in other assets and $1.3 million was included in other liabilities.  The Corporation does not apply hedge accounting to its derivative financial instruments; therefore, all changes in fair value are recorded in earnings.