Loan Servicing Rights

12 Months Ended

Sep. 30, 2025

The Company services one- to four-family mortgage loans for Freddie Mac and also provides servicing for secondary market purchasers of the guaranteed portion of SBA loans; such loans are not included in the accompanying consolidated balance sheets. The principal amount of loans serviced for Freddie Mac at September 30, 2025, 2024 and 2023 was $356,158,000, $369,077,000 and $384,619,000, respectively. The guaranteed principal amount of SBA loans serviced for others at September 30, 2025, 2024 and 2023 was $859,000, $1,482,000 and $1,882,000, respectively.

The following is an analysis of the changes in Freddie Mac loan servicing rights for the years ended September 30, 2025, 2024 and 2023 (dollars in thousands):


	2025		2024		2023
Balance, beginning of year	$	1,372	$	2,124	$	3,020
Additions	220		142		113
Amortization	(777)		(894)		(1,009)

Balance, end of year	$	815	$	1,372	$	2,124

At September 30, 2025, 2024 and 2023, the estimated fair value of Freddie Mac servicing rights totaled $4,634,000, $4,655,000 and $5,469,000, respectively. The Freddie Mac servicing rights' fair values at September 30, 2025, 2024 and 2023 were estimated using discounted cash flow analyses with average discount rates of 9.00%, 10.00% and 9.50%, and average conditional prepayment rates of 7.37%, 7.03% and 6.23%, respectively. At September 30, 2025, 2024 and 2023, there was no valuation allowance.

At September 30, 2025 and 2024 there were no SBA servicing rights. There was no valuation allowance on SBA servicing rights at September 30, 2025 and 2024.