XML 24 R14.htm IDEA: XBRL DOCUMENT v3.25.2
Borrowed Funds
9 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Borrowed Funds BORROWED FUNDS
FHLB Borrowings and Interest Rate Swaps - As of June 30, 2025 and September 30, 2024, the Bank held interest rate swap agreements with a total notional amount of $200.0 million in order to hedge the variable cash flows associated with $200.0 million of adjustable-rate FHLB advances. At June 30, 2025 and September 30, 2024, the interest rate swap agreements had an average remaining term to maturity of 1.5 years and 2.3 years, respectively. The interest rate swaps were designated as cash flow hedges and involved the receipt of variable amounts from a counterparty in exchange for the Bank making fixed-rate payments over the life of the interest rate swap agreements. At June 30, 2025 and September 30, 2024, the interest rate swaps were in a gain position with a total fair value of $1.5 million and $2.1 million, respectively, which was reported in other assets on the consolidated balance sheet. During the three and nine months ended June 30, 2025, $557 thousand and $1.8 million, respectively, was reclassified from AOCI as a decrease to interest expense. During the three and nine months ended June 30, 2024, $1.6 million and $5.2 million, respectively, was reclassified from AOCI as a decrease to interest expense. At June 30, 2025, the Company estimated that $1.1 million of interest expense associated with the interest rate swaps would be reclassified from AOCI as a decrease to interest expense on FHLB borrowings during the next 12 months. The Bank has minimum collateral posting thresholds with its derivative counterparties and posts collateral on a daily basis. The Bank held cash collateral of $1.7 million and $2.1 million at June 30, 2025 and September 30, 2024, respectively.
During the three months ended June 30, 2025, the Bank prepaid fixed-rate FHLB advances totaling $200.0 million with a weighted average contractual interest rate of 4.70% and a weighted average remaining term of 0.6 years, and replaced these advances with fixed-rate FHLB advances totaling $200.0 million with a weighted average contractual interest rate of 3.83% and a weighted average term of 2.5 years. The Bank paid penalties of $547 thousand to FHLB as a result of prepaying these advances. The prepayment penalties are being recognized in interest expense over the life of the new FHLB advances. The weighted average effective interest rate of the new advances was 3.93%.