10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the quarterly period ended  March 31, 2016
	OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the transition period from                     to
	Commission file number: 000-55084

Prudential Bancorp, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Pennsylvania	46-2935427
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
1834 West Oregon Avenue Philadelphia, Pennsylvania	19145 Zip Code
(Address of Principal Executive Offices)

(215) 755-1500

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  x  No  ¨  

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

x Yes   ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer x
Non-accelerated filer  ¨ (Do not check if a smaller reporting company)	Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes     x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practical date: as of April 30, 2016, 9,544,809 shares were issued and 8,060,799 outstanding.

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		PAGE
PART I	FINANCIAL INFORMATION:
Item 1.	Consolidated Financial Statements
	Unaudited Consolidated Statements of Financial Condition March 31, 2016 and September 30, 2015	2
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2016 and 2015	3
	Unaudited Consolidated Statements of Comprehensive Income for for the Three and Six Months Ended March 31, 2016 and 2015	4
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended March 31, 2016 and 2015	5
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2016 and 2015	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	56
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	58
SIGNATURES		59

1

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	March 31,			September 30,
	2016			2015
	(Dollars in Thousands)
ASSETS
Cash and amounts due from depository institutions	$	2,030		$	2,150
Interest-bearing deposits		5,300			9,122
Total cash and cash equivalents		7,330			11,272
Investment and mortgage-backed securities available for sale (amortized cost— March 31, 2016, $142,048; September 30, 2015, $77,456)		143,235			77,483
Investment and mortgage-backed securities held to maturity (fair value— March 31, 2016, $45,591; September 30, 2015, $66,877)		44,488			66,384
Loans receivable—net of allowance for loan losses (March 31, 2016, $3,038; September 30, 2015, $2,930)		322,182			312,633
Accrued interest receivable		1,774			1,665
Real estate owned		-			869
Federal Home Loan Bank stock—at cost		1,851			369
Office properties and equipment—net		1,495			1,492
Bank owned life insurance		12,890			12,722
Prepaid expenses and other assets		1,848			1,325
Deferred tax assets-net		451			975
TOTAL ASSETS	$	537,544		$	487,189
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	2,775		$	2,293
Interest-bearing		381,295			362,781
Total deposits		384,070			365,074
Advances from Federal Home Loan Bank		37,059			-
Accrued interest payable		543			1,291
Advances from borrowers for taxes and insurance		1,777			1,670
Accounts payable and accrued expenses		1,770			2,153
Total liabilities		425,219			370,188
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued		-			-
Common stock, $.01 par value, 40,000,000 shares authorized; 9,544,809 issued and 8,060,799 outstanding at March 31, 2016 and 9,544,809 issued and 8,449,625 outstanding at September 30, 2015		95			95
Additional paid-in capital		95,213			95,286
Unearned Employee Stock Ownership Plan shares		(4,738	)		(4,926	)
Treasury stock, at cost: 1,484,010 shares at March 31, 2016 and 1,095,184 at		(20,756	)		(14,691	)
September 30, 2015
Retained earnings		41,728			41,219
Accumulated other comprehensive income		783			18
Total stockholders' equity		112,325			117,001
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	537,544		$	487,189

See notes to unaudited consolidated financial statements.

2

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,					Six Months Ended March 31,
	2016		2015			2016		2015
	(Dollars in Thousands, Except Per Share Data)
INTEREST INCOME:
Interest on loans	$	3,166	$	3,287		$	6,226	$	6,544
Interest on mortgage-backed securities		683		450			1,195		866
Interest and dividends on investments		509		552			988		1,100
Interest on interest-bearing assets		8		15			13		34
Total interest income		4,366		4,304			8,422		8,544
INTEREST EXPENSE:
Interest on deposits		743		871			1,495		1,772
Interest on advances from Federal Home Loan Bank		106		-			154		-
Total interest expense		849		871			1,649		1,772
NET INTEREST INCOME		3,517		3,433			6,773		6,772
PROVISION FOR LOAN LOSSES		75		300			75		375
NET INTEREST  INCOME AFTER PROVISION FOR LOAN LOSSES		3,442		3,133			6,698		6,397
NON-INTEREST INCOME:
Fees and other service charges		110		95			229		196
Gain on sale of loans, net		1		-			2		138
Gain on the sale of office properties		-		1,793			-		1,793
Income from bank owned life insurance		84		87			168		177
Other		14		13			84		34
Total non-interest income		209		1,988			483		2,338
NON-INTEREST EXPENSE:
Salaries and employee benefits		1,670		2,091			3,387		3,840
Data processing		112		106			228		212
Professional services		241		344			520		620
Office occupancy		259		267			507		490
Director compensation		102		82			228		168
Deposit insurance		90		68			172		136
Real estate owned expense		-		4			2		29
Advertising		21		73			38		103
Other		301		476			610		839
Total non-interest expense		2,796		3,511			5,692		6,437
INCOME BEFORE INCOME TAXES		855		1,610			1,489		2,298
INCOME TAXES:
Current expense		80		113			397		325
Deferred expense (benefit)		227		(204	)		131		(199	)
Total income tax expense		307		(91	)		528		126
NET INCOME	$	548	$	1,701		$	961	$	2,172
BASIC EARNINGS PER SHARE	$	0.08	$	0.20		$	0.13	$	0.25
DILUTED EARNINGS PER SHARE	$	0.07	$	0.18		$	0.12	$	0.22
DIVIDENDS PER SHARE	$	0.03	$	0.03		$	0.06	$	0.06

See notes to unaudited consolidated financial statements.

3

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME  

	Three months ended March 31,						Six months ended March 31,
	2016			2015			2016			2015
	(Dollars in Thousands)						(Dollars in Thousands)
Net income	$	548		$	1,701		$	961		$	2,172
Unrealized holding gains on available-for-sale securities		2,344			861			1,160			1,597
Tax effect		(797	)		(293	)		(395	)		(543	)
Total other comprehensive income		1,547			568			765			1,054
Comprehensive Income	$	2,095		$	2,269		$	1,726		$	3,226

See notes to unaudited consolidated financial statements.

4

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

															Accumulated
			Additional			Unearned									Other		Total
	Common		Paid-In			ESOP			Treasury			Retained			Comprehensive		Stockholders'
	Stock		Capital			Shares			Stock			Earnings			Income (Loss)		Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, OCTOBER 1, 2015	$	95	$	95,286		$	(4,926	)	$	(14,691	)	$	41,219		$	18	$	117,001
Net income													961					961
Other comprehensive income																765		765
Dividends paid ($0.06 per share)													(452	)				(452	)
Excess tax benefit from stock compensation plans				111														111
Purchase of treasury stock (430,626 shares)										(6,705	)							(6,705	)
Treasury stock used for Recognition and Retention Plan (41,800 shares issued)				(640	)					640								-
Stock option expense				219														219
Recognition and Retention Plan expense				160														160
ESOP shares committed to be released (17,758) shares)				77			188											265
BALANCE, MARCH 31, 2016	$	95	$	95,213		$	(4,738	)	$	(20,756	)	$	41,728		$	783	$	112,325

														Accumulated
			Additional		Unearned									Other			Total
	Common		Paid-In		ESOP			Treasury			Retained			Comprehensive			Stockholders'
	Stock		Capital		Shares			Stock			Earnings			(Loss) Income			Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, OCTOBER 1, 2014	$	95	$	94,397	$	(5,302	)	$	-		$	41,188		$	(953	)	$	129,425
Net income												2,172						2,172
Other comprehensive income															1,054			1,054
Dividends paid ($0.06 per share)												(519	)					(519	)
Excess tax benefit from stock compensation plans				48														48
Purchase of treasury stock (309,614 shares)									(3,790	)								(3,790	)
Stock option expense				99														99
Recognition and Retention Plan expense				69														69
ESOP shares committed to be released (17,756 shares)				50		188												238
BALANCE, MARCH 31, 2015	$	95	$	94,663	$	(5,114	)	$	(3,790	)	$	42,841		$	101		$	128,796

See notes to unaudited consolidated financial statements.

5

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended  March 31,
	2016			2015
OPERATING ACTIVITIES:	(Dollars in Thousands)
Net income	$	961		$	2,172
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		158			155
Net amortization (accretion) of premiums/discounts		66			(129	)
Provision for loan losses		75			375
Net amortization of deferred loan fees and costs		106			129
Share-based compensation expense for stock options and awards		379			168
Income from bank owned life insurance		(168	)		(177	)
Gain from sale of loans		(2	)		(138	)
Gain on sale of office properties		-			(1,793	)
Gain on sale of other real estate owned		(58	)		-
Originations of loans held for sale		(450	)		(2,400	)
Proceeds from sale of loans held for sale		452			2,538
Compensation expense of ESOP		265			238
Deferred income tax expense (benefit)		131			(199	)
Changes in assets and liabilities which used cash:
Accrued interest receivable		(109	)		(31	)
Prepaid expenses and other assets		(497	)		712
Accrued interest payable		(748	)		(979	)
Accounts payable and accrued expenses		(383	)		(229	)
Net cash provided  by  operating activities		178			412
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale		(46,828	)		-
Purchase of corporate bonds available for sale		(19,421	)		(13,751	)
Loans originated or acquired		(29,146	)		(45,444	)
Principal collected on loans		19,416			38,148
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity		21,913			7,265
Available-for-sale		1,546			2,195
Proceeds from redemption of FHLB stock		-			871
Purchase of FHLB stock		(1,482	)		-
Proceeds from sale of real estate owned		927			360
Proceeds from sale of office properties		-			1,849
Purchases of equipment		(161	)		(229	)
Net cash used in investing activities		(53,236	)		(8,736	)
FINANCING ACTIVITIES:
Net decrease in demand deposits, NOW accounts, and savings accounts		(2,788	)		(2,457	)
Net increase (decrease) in certificates of deposit		21,784			(3,093	)
Proceeds from FHLB advances		38,000			-
Decrease in advances from borrowers for taxes and insurance		107			385
Repayment of FHLB advances		(941	)		(210	)
Cash dividends paid		(452	)		(519	)
Purchase of treasury stock, net		(6,705	)		(3,790	)
Excess tax benefit related to stock compensation plans		111			48
Net cash provided by (used in) financing activities		49,116			(9,636	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		(3,942	)		(17,960	)
CASH AND CASH EQUIVALENTS—Beginning of period		11,272			45,382
CASH AND CASH EQUIVALENTS—End of period	$	7,330		$	27,422
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid on deposits and advances from Federal
Home Loan Bank	$	2,397		$	2,751
Income taxes paid	$	350		$	475

See notes to unaudited consolidated financial statements.

6

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

Prudential Bancorp, Inc. (the “Company”) is a Pennsylvania corporation and the parent holding company for Prudential Saving Bank (the “Bank”). lt is a registered bank holding company.

The Bank is a community-oriented Pennsylvania-chartered savings bank headquartered in South Philadelphia. The banking office network currently consists of the headquarters and main office and five full-service branch offices. Five of the banking offices are located in Philadelphia (Philadelphia County), and one is in Drexel Hill, Delaware County, Pennsylvania. The Bank maintains ATMs at all six of the banking offices. The Bank also provides on-line and mobile banking services.

The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities (the “Department”), as its chartering authority and primary regulator, and by the Federal Deposit Insurance Corporation (the “FDIC”), which insures the Bank’s deposits up to applicable limits. As a bank holding company, Prudential is subject to the regulation of the Board of Governors of the Federal Reserve System.

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of Prudential. and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

Use of Estimates in the Financial Statements—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The most significant estimates and assumptions in the Company’s consolidated financial statements are recorded in the allowance for loan losses, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Share-Based Compensation – The Company accounts for stock-based compensation issued to employees, and where appropriate, non-employees, at fair value. Under fair value provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the appropriate vesting period using the straight-line method. The amount of stock-based compensation recognized at any date must at least equal the portion of the grant date fair value of the award that is vested at that date and as a result it may be necessary to recognize the expense using a ratable method. Determining the fair value of stock-based awards at the date of grant requires judgment, including estimating the expected term of the stock options and the expected volatility of the Company’s stock. In addition, judgment is required in estimating the amount of stock-based awards that are expected to be forfeited. If actual results differ significantly from these estimates or different key assumptions were used, it could have a material effect on the Company’s consolidated financial statements.

Dividends with respect to non-vested share awards granted pursuant to the Company’s 2008 Recognition and Retention Plan (“Plan”) and held in the Trust (the “Trust”) are held for the benefit of the recipients and are paid out proportionately by the Trust to the recipients of stock awards granted pursuant to the Plan as soon as practicable after the stock awards are earned. A recipient of a share award granted under the 2014 Stock Incentive Plan is not entitled to receive any dividends declared on the common stock subject to the award until earned.

7

Treasury Stock – Stock held in treasury by the Company is accounted for using the cost method, which treats stock held in treasury as a reduction to total stockholders’ equity. During the six month period ended March 31, 2016, the Company repurchased 430,626 shares at an approximate total cost of $6.7 million, in addition the Company purchased 41,000 shares at an aggregate cost of $640,000 out of treasury for the benefit of the Company’s 2014 Stock Incentive Plan.

FHLB Stock – FHLB stock is classified as a restricted equity security because ownership is restricted and there is not an established market for its resale.  FHLB stock is carried at cost and is evaluated for impairment when certain conditions warrant further consideration. Management concluded that the FHLB stock was not impaired at March 31, 2016.

Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. The amendments in this Update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this Update should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this Update became effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted. This ASU did not have a significant impact on the Company’s financial statements.

In January 2014, the FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The amendments in this Update clarify that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to requirements of the applicable jurisdiction. The amendments in this Update were effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this Update using either a modified retrospective transition method or a prospective transition method. This ASU did not have a significant impact on the Company’s financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

8

In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments when the Terms of an Award Provide that a Performance Target Could Be Achieved After the Requisite Service Period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies how current U.S. GAAP should be interpreted in subjectively evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Public business entities are required to implement the new requirements in fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting. The amendments in this Update apply to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity (either public or nonpublic) upon the occurrence of an event in which an acquirer (an individual or an entity) obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity's most recent change-in-control event. The amendments in this Update were effective on November 18, 2014. After the effective date, an acquired entity was permitted to make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. This ASU did not have a significant impact on the Company’s financial statements.

In January 2015, the FASB issued ASU 2015-01, Income Statement –Extraordinary and Unusual Items, as part of its initiative to reduce complexity in accounting standards. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

9

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). The amendments in this Update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) eliminate the presumption that a general partner should consolidate a limited partnership; (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), as part of its initiative to reduce complexity in accounting standards. This guidance will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the FASB decided that the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-06, Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions. Topic 260, Earnings Per Share, contains guidance that addresses master limited partnerships that originated from Emerging Issues Task Force (“EITF”) Issue No. 07-4, Application of the Two-Class Method Under FASB Statement No. 128 to Master Limited Partnerships. Under Topic 260, master limited partnerships apply the two-class method of calculating earnings per unit because the general partner, limited partners, and incentive distribution rights holders each participate differently in the distribution of available cash in accordance with the contractual rights contained in the partnership agreement. The amendments in this Update specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are also required. The amendments in this Update are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

10

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). The Update applies to reporting entities that elect to measure the fair value of an investment using the net asset value per share (or its equivalent) practical expedient. Under the amendments in this Update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is not applied will continue to be included in the fair value hierarchy. A reporting entity should continue to disclose information on investments for which fair value is measured at net asset value (or its equivalent) as a practical expedient to help users understand the nature and risks of the investments and whether the investments, if sold, are probable of being sold at amounts different from net asset value. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity's financial statements. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-08, Business Combinations - Pushdown Accounting - Amendment to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. This ASU was issued to amend various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115 which deleted certain topics related to push down accounting in order to make the SEC’s interpretive guidance consistent with current accounting and audit guidance. This ASU did not have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosure About Short-Duration Contracts. The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Services – Insurance. The amendments require insurance entities to disclose for annual reporting periods certain information about the liability for unpaid claims and claim adjustment expenses. The amendments also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. Additionally, the amendments require insurance entities to disclose for annual and interim reporting periods a rollforward of the liability for unpaid claims and claim adjustment expenses, described in Topic 944. For health insurance claims, the amendments require the disclosure of the total of incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. The amendments in this Update represent changes to clarify the FASB Accounting Standards Codification (“Codification”), correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this ASU. This ASU is not expected to have a significant impact on the Company’s financial statements.

11

In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers (Topic 606). The amendments in this Update defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the effect of adopting this new accounting ASU.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). The amendments in this Update require that an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this Update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This ASU is not expected to have a significant impact on the Company’s financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

12

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet.  A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.  A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20). The standard provides that liabilities related to the sale of prepaid stored-value products within the scope of this Update are financial liabilities. The amendments in the Update provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606. The amendments in this Update are effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this Update apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a heading instrument under Topic 815. The standards in this Update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. An entity has an option to apply the amendments in this ASU on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

13

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. An entity performing the assessment under the amendments in this Update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For entities other than public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The Update affects all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this Update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration. The amendments in this update do not change the core principle of the guidance in Topic 606; they simply clarify the implementation guidance on principal versus agent considerations. The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update affect all entities that issue share-based payment awards to their employees. The standards in this Update provide simplification for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as with equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. In addition to those simplifications, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. This ASU is not expected to have a significant impact on the Company’s financial statements.

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In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and/or results of operations.

2. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, after consideration of the potential dilutive effect of common stock equivalents, based upon the treasury stock method using an average market price for the period.

The calculated basic and diluted earnings per share are as follows:

	Three Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	548	$	548	$	1,701	$	1,701
Weighted average shares outstanding		7,380,880		7,380,880		8,571,846		8,571,846
Effect of common stock equivalents		-		270,973		-		1,103,728
Adjusted weighted average shares used in earnings per share computation		7,380,880		7,651,853		8,571,846		9,675,574
Earnings per share - basic and diluted	$	0.08	$	0.07	$	0.20	$	0.18

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	Six Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	961	$	961	$	2,172	$	2,172
Weighted average shares outstanding		7,498,933		7,498,933		8,712,938		8,712,938
Effect of common stock equivalents		-		246,791		-		1,163,172
Adjusted weighted average shares used in earnings per share computation		7,498,933		7,745,724		8,712,938		9,876,110
Earnings per share - basic and diluted	$	0.13	$	0.12	$	0.25	$	0.22

All exercisable stock options outstanding as of March 31, 2016 and 2015 had exercise prices below the then current per share market price for the Company’s common stock and were considered dilutive for the earnings per share calculation.

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3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive (loss) income by component, net of tax:

	Three Months Ended March 31,
	2016			2015
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities (a)			securities (a)
Beginning Balance	$	(764	)	$	(467	)
Other comprehensive income gain before reclassification		1,547			568
Total other comprehensive income		1,547			568
Ending Balance	$	783		$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

	Six Months Ended March 31,
	2016		2015
	(Dollars in Thousands)
	Unrealized gains (losses)		Unrealized gains (losses)
	on available for sale		on available for sale
	securities (a)		securities (a)
Beginning Balance	$	18	$	(953	)
Other comprehensive income gain before reclassification		765		1,054
Total other comprehensive income		765		1,054
Ending Balance	$	783	$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

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4. INVESTMENT AND MORTGAGE-BACKED SECURITIES

The amortized cost and fair value of investment and mortgage-backed securities, with gross unrealized gains and losses, are as follows: 

	March 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	11	$	(25	)	$	18,974
Mortgage-backed securities - U.S. government agencies		103,653		1,060		(132	)		104,581
Corporate bonds		19,401		243		-			19,644
Total debt securities available for sale		142,042		1,314		(157	)		143,199
FHLMC preferred stock		6		30		-			36
Total securities available for sale	$	142,048	$	1,344	$	(157	)	$	143,235
Securities Held to Maturity:
U.S. government and agency obligations	$	34,102	$	423	$	(135	)	$	34,390
Mortgage-backed securities - U.S. government agencies		10,386		815		-			11,201
Total securities held to maturity	$	44,488	$	1,238	$	(135	)	$	45,591

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	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	-	$	(276	)	$	18,712
Mortgage-backed securities - U.S. government agencies		58,462		475		(225	)		58,712
Total debt securities available for sale		77,450		475		(501	)		77,424
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	77,456	$	528	$	(501	)	$	77,483
Securities Held to Maturity:
U.S. government and agency obligations	$	54,929	$	462	$	(849	)	$	54,542
Mortgage-backed securities - U.S. government agencies		11,455		880		-			12,335
Total securities held to maturity	$	66,384	$	1,342	$	(849	)	$	66,877

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The following table shows the gross unrealized losses and related fair values of the Company’s investment securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at March 31, 2016:

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(10	)	$	2,990	$	(15	)	$	4,984	$	(25	)	$	7,974
Mortgage-backed securities - U.S. government agencies		(41	)		10,246		(91	)		11,462		(132	)		21,708
Total securities available for sale		(51	)		13,236		(106	)		16,446		(157	)		29,682
Securities Held to Maturity:
U.S. government and agency obligations		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total securities held to maturity		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total	$	(58	)	$	19,223	$	(234	)	$	30,292	$	(292	)	$	49,515

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The following table shows the gross unrealized losses and related fair values of the Company’s investment securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at September 30, 2015:

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(85	)	$	4,910	$	(191	)	$	13,802	$	(276	)	$	18,712
Mortgage-backed securities - agency		(138	)		22,173		(87	)		9,206		(225	)		31,379
Total securities available for sale		(223	)		27,083		(278	)		23,008		(501	)		50,091
Securities Held to Maturity:
U.S. government and agency obligations		-			-		(849	)		42,603		(849	)		42,603
Total securities held to maturity		-			-		(849	)		42,603		(849	)		42,603
Total	$	(223	)	$	27,083	$	(1,127	)	$	65,611	$	(1,350	)	$	92,694

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least once each quarter, and more frequently when economic or market concerns warrant such evaluation. The evaluation is based upon factors such as the creditworthiness of the issuers/guarantors, the underlying collateral, if applicable, and the continuing performance of the securities.  Management also evaluates other facts and circumstances that may be indicative of an OTTI condition. This includes, but is not limited to, an evaluation of the type of security, the length of time and extent to which the fair value of the security has been less than cost, and the near-term prospects of the issuer.

The Company assesses whether a credit loss exists with respect to a security by considering whether (1) the Company has the intent to sell the security, (2) it is more likely than not that it will be required to sell the security before recovery has occurred, or (3) it does not expect to recover the entire amortized cost basis of the security. The Company bifurcates the OTTI impact on impaired securities where impairment in value was deemed to be other than temporary between the component representing credit loss and the component representing loss related to other factors. The portion of the fair value decline attributable to credit loss must be recognized through a charge to earnings. The credit component is determined by comparing the present value of the cash flows expected to be collected, discounted at the rate in effect before recognizing any OTTI, with the amortized cost basis of the debt security.  The Company uses the cash flows expected to be realized from the security, which includes assumptions about interest rates, timing and severity of defaults, estimates of potential recoveries, the cash flow distribution from the security and other factors, then applies a discount rate equal to the effective yield of the security.  The difference between the present value of the expected cash flows and the amortized book value is considered a credit loss.  The fair value of the security is determined using the same expected cash flows; the discount rate is a rate the Company determines from open market and other sources as appropriate for the particular security.  The difference between the fair value and the security’s remaining amortized cost is recognized in other comprehensive income (loss).  

During the three and six months ended March 31, 2016 and 2015, the Company did not record any credit losses on investment securities through either earnings.

21

U.S. Government Agency Obligations - The Company’s investments reflected in the tables above in U.S. Government agency obligations consist of debt of the FHLB and Federal Farm Credit System (“FFCS”). These securities are typically rated AAA by one of the internationally recognized credit rating services. At March 31, 2016, U.S. Government and agency obligations in a gross unrealized loss for less than 12 months consisted of three securities. There were nine securities in a gross unrealized loss for more than 12 months at such date. The unrealized losses on these debt securities relate principally to the changes in market interest rates and are not a result of a projected shortfall of cash flows. The Company anticipates it will recover the entire amortized cost basis of the securities. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2016.

U.S. Agency Issued Mortgage-Backed Securities - At March 31, 2016, there were seven securities in a gross unrealized loss for less than 12 months while there were seven securities in a gross unrealized loss for more than 12 months at such date. These securities represent asset-backed issues that are issued or guaranteed by a U.S. Government sponsored agency or carry the full faith and credit of the United States through a government agency and are currently rated AAA by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2016.

Corporate Debt Securities –The Company invested in investment grade corporate debt bonds, issued by large public Companies. At March 31, 2016, there were no securities in an unrealized loss position.

The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The maturity table below excludes mortgage-backed securities because the contractual maturities of such securities are not indicative of actual maturities due to significant prepayments.

	March 31, 2016
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due within one year	$	-	$	-	$	-	$	-
Due after one through five years		-		-		-		-
Due after five through ten years		1,999		2,235		19,401		19,644
Due after ten years		32,103		32,155		18,988		18,974
Total	$	34,102	$	34,390	$	38,389	$	38,618

During both three and six month periods ended March 31, 2016 and 2015, no securities were sold.

22

5. LOANS RECEIVABLE

Loans receivable consist of the following:

	March 31,			September 30,
	2016			2015
	(Dollars in Thousands)
One-to-four family residential	$	248,720		$	259,163
Multi-family residential		4,617			6,249
Commercial real estate		45,801			25,799
Construction and land development		36,338			38,953
Consumer		649			392
Total loans		336,125			330,556
Undisbursed portion of loans-in-process		(12,838	)		(17,097	)
Deferred loan costs		1,933			2,104
Allowance for loan losses		(3,038	)		(2,930	)
Net loans	$	322,182		$	312,633

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at March 31, 2016:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,511		43		428		773		7		276		3,038
Total ending allowance balance	$	1,511	$	43	$	428	$	773	$	7	$	276	$	3,038
Loans:
Individually evaluated for impairment	$	5,435	$	343	$	3,694	$	9,503	$	-			$	18,975
Collectively evaluated for impairment		243,285		4,274		42,107		26,835		649				317,150
Total loans	$	248,720	$	4,617	$	45,801	$	36,338	$	649	$	-	$	336,125

23

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at September 30, 2015:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial business		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,635		66		231		724		-		5		269		2,930
Total loans	$	1,635	$	66	$	231	$	724	$	-	$	5	$	269	$	2,930
Loans:
Individually evaluated for impairment	$	4,206	$	-	$	3,768	$	8,796	$	-	$	-	$	-	$	16,770
Collectively evaluated for impairment		254,957		6,249		22,031		30,157		-		392		-		313,786
Total loans	$	259,163	$	6,249	$	25,799	$	38,953	$	-	$	392	$	-	$	330,556

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction loans, commercial real estate and commercial business loans and all loans 90 plus days delinquent as to principal and/or interest. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect in full the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.

Once the determination is made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is generally measured by comparing the recorded investment in the loan to the fair value of the loan using one of the following three methods: (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs. Management primarily utilizes the fair value of collateral method as a practically expedient alternative. On collateral method evaluations, any portion of the loan deemed uncollectible is charged-off against the loan loss allowance.

The following table presents impaired loans by class as of March 31, 2016, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

24

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	5,435	$	5,435	$	5,780
Multi-family residential		-		-		343		343		343
Commercial real estate		-		-		3,694		3,694		3,694
Construction and land development		-		-		9,503		9,503		9,503
Total Loans	$	-	$	-	$	18,975	$	18,975	$	19,320

The following table presents impaired loans by class as of September 30, 2015, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,206	$	4,206	$	4,550
Commercial real estate		-		-		3,768		3,768		3,768
Construction and land development		-		-		8,796		8,796		8,796
Total Loans	$	-	$	-	$	16,770	$	16,770	$	17,114

25

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated:

	Three Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,069	$	20	$	29
Multi-family residential		345		-		-
Commercial real estate		3,703		27		-
Construction and land development		9,410		126		-
Total Loans	$	18,527	$	173	$	29

	Six Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,781	$	43	$	59
Multi-family residential		348		-		-
Commercial real estate		3,725		42		12
Construction and land development		9,206		252		64
Total Loans	$	18,060	$	337	$	135

	Three Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,068	$	124	$	42
Multi-family residential		361		6		-
Commercial real estate		3,758		51		24
Construction and land development		7,743		106		64
Total Loans	$	21,930	$	287	$	130

26

	Six Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,179	$	263	$	77
Multi-family residential		363		13		-
Commercial real estate		3,764		102		35
Construction and land development		7,628		210		64
Total Loans	$	21,934	$	588	$	176

Federal regulations and our policy require that the Company utilize an internal asset classification system as a means of reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, consistent with Federal banking regulations, as a part of its credit monitoring system. Management currently classifies problem and potential problem assets as “special mention”, “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “special mention.”

The following table presents the classes of the loan portfolio in which a formal risk weighting system is utilized summarized by the aggregate “Pass” and the criticized category of “special mention”, and the classified categories of “substandard”, “doubtful” and “loss” within the Company’s risk rating system as applied to the loan portfolio. The Company had no loans classified as “doubtful” or “loss” at either of the dates presented.

	March 31, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	2,355	$	1,705	$	1,375	$	5,435
Multi-family residential		4,274		-		343		4,617
Commercial real estate		42,088		956		2,757		45,801
Construction and land development		26,834		-		9,504		36,338
Total Loans	$	75,551	$	2,661	$	13,979	$	92,191

27

	September 30, 2015
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	1,348	$	2,107	$	751	$	4,206
Multi-family residential		5,898		351		-		6,249
Commercial real estate		22,005		965		2,829		25,799
Construction and land development		30,157		-		8,796		38,953
Total Loans	$	59,408	$	3,423	$	12,376	$	75,207

The Company evaluates the classification of one-to-four family residential and consumer loans primarily on a pooled basis. If the Company becomes aware that adverse or distressed conditions exist that may affect a particular single-family residential loan, the loan is downgraded following the above definitions of special mention, substandard, doubtful and loss.

The following table represents loans in which a formal risk rating system is not utilized, but loans are segregated between performing and non-performing based primarily on delinquency status. Non-performing loans that would be included in the table are those loans greater than 90 days past due that do not have a designated risk rating.

	March 31, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	243,285	$	-	$	243,285
Consumer		649		-		649
Total Loans	$	243,934	$	-	$	243,934

	September 30, 2015
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	254,957	$	-	$	254,957
Consumer		392		-		392
Total Loans	$	255,349	$	-	$	255,349

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is due or overdue, as the case may be. The following table presents the loan categories of the loan portfolio summarized by the aging categories of performing and delinquent loans and nonaccrual loans:

28

	March 31, 2016
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	243,804	$	2,266	$	2,650	$	-	$	2,266	$	248,720	$	4,145
Multi-family residential		4,617		-		-		-		-		4,617		-
Commercial real estate		43,994		1,625		182		-		272		45,801		1,535
Construction and land development		29,374		6,964		-		-		-		36,338		9,503
Consumer		540		109		-		-		109		649		-
Total Loans	$	322,329	$	10,964	$	2,832	$	-	$	2,647	$	336,125	$	15,183

	September 30, 2015
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	255,669	$	1,462	$	2,032	$	-	$	1,462	$	259,163	$	3,547
Multi-family residential		6,249		-		-		-		-		6,249		-
Commercial real estate		25,114		504		181		-		504		25,799		1,589
Construction and land development		38,953		-		-		-		-		38,953		8,796
Consumer		392		-		-		-		-		392		-
Total Loans	$	326,377	$	1,966	$	2,213	$	-	$	1,966	$	330,556	$	13,932

The allowance for loan losses is established through a provision for loan losses charged to expense. The Company maintains the allowance at a level believed to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate at each reporting date. Management reviews the allowance for loan losses no less than quarterly in order to identify these inherent losses and to assess the overall collection probability for the loan portfolio in view of these inherent losses. For each primary type of loan, a loss factor is established reflecting an estimate of the known and inherent losses in such loan type contained in the portfolio using both a quantitative analysis as well as consideration of qualitative factors. The evaluation process includes, among other things, an analysis of delinquency trends, non-performing loan trends, the level of charge-offs and recoveries, prior loss experience, total loans outstanding, the volume of loan originations, the type, size and geographic concentration of the Company’s loans, the value of collateral securing the loans, the borrowers’ ability to repay and repayment performance, the number of loans requiring heightened management oversight, local economic conditions and industry experience.

29

Commercial real estate loans entail significant additional credit risks compared to owner-occupied one-to-four family residential mortgage loans, as they generally involve large loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project and/or business operation of the borrower who is, in some cases, also the primary occupant, and thus may be subject to a greater extent to the effects of adverse conditions in the real estate market and in the economy in general. Commercial business loans typically involve a higher risk of default than residential loans of like duration since their repayment is generally dependent on the successful operation of the borrower’s business and the sufficiency of collateral, if any. Land acquisition, development and construction lending exposes the Company to greater credit risk than permanent mortgage financing. The repayment of land acquisition, development and construction loans depends upon the sale of the property to third parties or the availability of permanent financing upon completion of all improvements. These events may adversely affect both the borrowers as well as the value of the collateral property. Such lending is additionally subject to the risk that if the estimate of construction cost proves to be inaccurate, the Company potentially will be compelled to advance additional funds. In addition, if the estimate of value proves to be inaccurate, the Company may be confronted with a project, when completed, having less value than the loan amount. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company would be able to recover the entire unpaid portion of the loan.

The following table summarizes the primary segments of the allowance for loan losses. Activity in the allowance is presented for the three month periods ended March 31, 2016 and 2015:

	Three Months Ended March 31, 2016
	One- to four-family residential		Multi- family residential			Commercial real estate		Construction and land development			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at December 31, 2015	$	1,471	$	58		$	359	$	757		$	8		$	266	$	2,919
Charge-offs		-		-			-		-			-			-		-
Recoveries		-		-			-		44			-			-		44
Provision		40		(15	)		69		(28	)		(1	)		10		75
ALLL balance at March 31, 2016	$	1,511	$	43		$	428	$	773		$	7		$	276	$	3,038

	Six Months Ended March 31, 2016
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2015	$	1,635		$	66		$	231	$	724	$	5	$	269	$	2,930
Charge-offs		(11	)		-			-		-		-		-		(11	)
Recoveries		-			-			-		44		-		-		44
Provision		(113	)		(23	)		197		5		2		7		75
ALLL balance at March 31, 2016	$	1,511		$	43		$	428	$	773	$	7	$	276	$	3,038

30

	Three Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential		Commercial real estate			Construction and land development		Commercial  business			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2014	$	1,492		$	51	$	216		$	493	$	5		$	4	$	239		$	2,500
Charge-offs		(212	)		-		-			-		-			-		-			(212	)
Recoveries		-			-		-			-		-			-		-			-
Provision		265			-		(9	)		52		(5	)		-		(3	)		300
ALLL balance at March 31, 2015	$	1,545		$	51	$	207		$	545	$	-		$	4	$	236		$	2,588

	Six Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Commercial  business			Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2014	$	1,663		$	67		$	122	$	323	$	15		$	4	$	231	$	2,425
Charge-offs		(212	)		-			-		-		-			-		-		(212	)
Recoveries		-			-			-		-		-			-		-		-
Provision		94			(16	)		85		222		(15	)		-		5		375
ALLL balance at March 31, 2015	$	1,545		$	51		$	207	$	545	$	-		$	4	$	236	$	2,588

The Company recorded a provision for loan losses in the amount of $75,000 for both the three and six months ended March 31, 2016, compared to the $300,000 provision for the three months and $375,000 for the six months periods ended March 31, 2015.

At March 31, 2016, the Company had ten loans classified as TDRs aggregating $7.9 million, consisting of two single-family residential real estate loans which amounted to $1.6 million, one construction and land development loan totaling $3.4 million and seven commercial real estate loans which amounted to $2.9 million. Of these loans, one single-family residential real estate loan totaling $1.4 million was determined to be non-performing until management has made the decision to designate this credits as performing. Typically management will wait until a minimum of six consecutive contractual payments have been made prior to changing the designation. All TDRs, with the exception of one commercial real estate loan totaling $756,000, were classified as “substandard” as of March 31, 2016. During the three months ended March 31, 2016, two loans classified as TDR, consisting of one construction loan in the amount of $3.4 million and one commercial real estate loan in the amount of $731,000 missed payments and were considered 60-89 days past due. These two loans are a part of the Company’s largest lending relationship.

31

The Company did not restructure any debt during the three and six month periods ended March 31, 2016 and 2015.

6. DEPOSITS

Deposits consist of the following major classifications:

	March 31,					September 30,
	2016					2015
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	57,470		15.0	%	$	60,736		16.6	%
Interest-bearing checking accounts		36,001		9.4			35,649		9.8
Non-interest bearing checking accounts		2,775		0.7			2,293		0.6
Passbook, club and statement savings		69,999		18.2			70,355		19.3
Certificates maturing in six months or less		69,843		18.2			49,857		13.7
Certificates maturing in more than six months		147,982		38.5			146,184		40.0
Total	$	384,070		100.0	%	$	365,074		100.0	%

Certificates of $250,000 and over totaled $17.2 million as of March 31, 2016 and $32.7 million as of September 30, 2015.

7. ADVANCES

Pursuant to collateral agreement with the FHLB of Pittsburgh advances are secured by qualifying first mortgage loans.

Type	Maturity Date	Amount		Coupon			Call Date
		(Dollars in Thousands)
Fixed Rate -Advance	1-Apr-16	$	3,000		0.60	%	Not Applicable
Fixed Rate -Advance	4-Apr-16		3,000		0.60	%	Not Applicable
Fixed Rate -Advance	17-Nov-17		10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		3,505		1.16	%	Not Applicable
Fixed Rate -Advance	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate -Advance	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate -Advance	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate -Amortizing	18-Nov-19		5,054		1.53	%	Not Applicable
		$	37,059		1.21	%

32

8. INCOME TAXES

Items that gave rise to significant portions of deferred income taxes are as follows:

	March 31,			September 30,
	2016			2015
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,210		$	1,185
Nonaccrual interest		96			86
Accrued vacation		37			119
Capital loss carryforward		506			534
Split dollar life insurance		19			19
Post-retirement benefits		104			126
Employee benefit plans		579			530
Total deferred tax assets		2,551			2,599
Valuation allowance		(506	)		(534	)
Total deferred tax assets, net of valuation allowance		2,045			2,065
Deferred tax liabilities:
Property		533			365
Unrealized gains on available for sale securities		404			10
Deferred loan fees		657			715
Total deferred tax liabilities		1,594			1,090
Net deferred tax assets	$	451		$	975

The Company establishes a valuation allowance for deferred tax assets when management believes that the use of the deferred tax assets is not likely to be realized through a carry back to taxable income in prior years or future reversals of existing taxable temporary differences, and/or to a lesser extent, future taxable income. The tax deduction generated by the redemption of the shares of a mutual fund held by the Bank and the subsequent impairment charge on the assets acquired through the redemption in kind are considered capital losses and can only be utilized to the extent of capital gains over a five year period, resulting in the establishment of a valuation allowance for the carryforward period. The valuation allowance totaled $506,000 at March 31, 2016, and $534,000 at September 30, 2015.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations as a component of income tax expense. The Company’s federal and state income tax returns for taxable years through September 30, 2012 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

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9. STOCK COMPENSATION PLANS

The Company maintains an employee stock ownership plan (“ESOP”) for substantially all of its full-time employees. The ESOP purchased 427,057 shares (on a converted basis) of the Company’s common stock for an aggregate cost of approximately $4.5 million in fiscal 2005. The ESOP purchased an additional 255,564 shares during December 2013 and an additional 30,100 shares at the beginning January 2014, of the Company’s common stock for an aggregate cost of approximately $3.1 million. The shares were purchased with the proceeds of loans from the Company. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants as the loans are repaid. Shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. As of March 31, 2016, the ESOP held 697,271 shares and the Company had allocated a total of 286,635 shares from the suspense account to participants. For the six months ended March 31, 2016 and 2015, the Company recognized $265,000 and $238,000, respectively, in compensation expense related to the ESOP.

The Company maintains the 2008 Recognition and Retention Plan (“2008 RRP”) which is administered by a committee of the Board of Directors of the Company. The RRP provides for the grant of shares of common stock of the Company to officers, employees and directors of the Company. In order to fund the grant of shares under the RRP, the RRP Trust purchased 213,528 shares (on a converted basis) of the Company’s common stock in the open market for approximately $2.5 million, at an average purchase price per share of $11.49 as part of the 2008 RRP. The Company made sufficient contributions to the RRP Trust to fund these purchases. As of March 31, 2016, all the shares, with exception of 6,262 shares that had been forfeited, had been awarded as part of the 2008 RRP. Shares subject to awards under the 2008 RRP generally vest at the rate of 20% per year over five years. During February 2015, shareholders approved the 2014 Stock Incentive Plan (the “2014 SIP”). As part of the 2014 SIP, a maximum of 285,655 shares can be awarded as restricted stock awards or units, of which 235,500 shares were awarded during February 2015 of which 30,500 shares had been forfeited as of March 31, 2016.

Compensation expense related to the shares subject to restricted stock awards granted is recognized ratably over the five-year vesting period in an amount which totals the grant date fair value multiplied by the number of shares subject to the grant. During the three and six months ended March 31, 2016, an aggregate of $115,000 and $243,000, respectively, was recognized in compensation expense for the 2008 RRP and the grants pursuant to the 2014 SIP. Income tax benefits of $39,000 and $83,000 were recognized for the three and six months ended March 31, 2016. During the three and six months ended March 31, 2015, $84,000 and $105,000 was recognized in compensation expense for the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $29,000 and $36,000, respectively, was recognized for the three and six months ended March 31, 2015. At March 31, 2016, approximately $2.5 million in additional compensation expense for the shares awarded which remained outstanding related to the 2008 RRP and for the 2014 SIP remained unrecognized. At March 31, 2015, approximately $3.0 million in additional compensation expense for the shares awarded related to the 2018 RRP and the 2014 SIP remained unrecognized.

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A summary of the Company’s non-vested stock award activity for the six months ended March 31, 2016 and 2015 is presented in the following tables:

	Six Months Ended March 31, 2016
	Number of Shares (1)			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Issued		-			-
Forfeited		(36,762	)		11.55
Vested		(49,511	)		11.47
Nonvested stock awards at the March 31, 2016		155,155		$	11.87

	Six Months Ended March 31, 2015
	Number of Shares			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2014		38,055		$	8.07
Issued		235,500			12.23
Forfeited		-			-
Vested		(9,578	)		8.07
Nonvested stock awards at the March 31, 2015		263,977		$	12.07

The Company maintains the 2008 Stock Option Plan (the “2008 Option Plan”) which authorizes the grant of stock options to officers, employees and directors of the Company to acquire shares of common stock with an exercise price at least equal to the fair market value of the common stock on the grant date. Options generally become vested and exercisable at the rate of 20% per year over five years and are generally exercisable for a period of ten years after the grant date. A total of 533,808 shares (on a converted basis) of common stock were approved for future issuance pursuant to the 2008 Stock Option Plan. As of March 31, 2016, all of the options had been awarded under the 2008 Option Plan. As of March 31, 2016, 442,155 options (on a converted basis) were vested under the 2008 Option Plan. The 2014 SIP reserved up to 714,145 shares for issuance pursuant to options. Options to purchase 587,112 shares were awarded during February 2015, 608,737 shares pursuant to the 2014 SIP and the remainder pursuant to the 2008 Option Plan. As of March 31, 2016, the 2008 Option Plan had 7,932 forfeited shares and the 2014 SIP had 78,000 forfeited shares.

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP as of March 31, 2016 and 2015 are presented below:

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	Six Months Ended March 31, 2016
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(130,535	)		11.49
Forfeited		(93,939	)		11.55
Outstanding at March 31, 2016		849,956		$	12.03
Exercisable at March 31, 2016		347,037		$	11.38

	Six Months Ended March 31, 2015
	Number of Shares		Weighted Average Exercise Price
Outstanding at October 1, 2014		530,084	$	10.86
Granted		608,737		12.23
Exercised		-		-
Forfeited		-		-
Outstanding at March 31, 2015		1,138,821	$	11.59
Exercisable at March 31, 2015		417,767	$	11.37

The weighted average remaining contractual term was approximately 6.5 years for options outstanding as of March 31, 2016.

The estimated fair value of options granted during fiscal 2009 was $2.98 per share, $2.92 for options granted during fiscal 2010, $3.34 for options granted during fiscal 2013, $4.67 for the options granted during fiscal 2014 and $4.58 for options granted during fiscal 2015. The fair value for grants made in fiscal 2015 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $12.23, expected term of seven years, volatility rate of 38.16%, interest rate of 1.62% and a yield rate of 0.98%.

During the three and six months ended March 31, 2016, $112,000 and $248,000 was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. Ttax benefits of $13,000 and $29,000, respectively, were recognized for the three and six months ended March 31, 2016. During the three and six months ended March 31, 2015, $86,000 and $111,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. Tax benefits of $9,000 and $12,000, respectively, were recognized for the three and six months ended March 31, 2015.

At March 31, 2016, there was approximately $2.1 million in additional compensation expense to be recognized for awarded options which remained outstanding and unvested at such date. The weighted average period over which this expense will be recognized is approximately 3.9 years.

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10. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2016, the Company had $23.0 million in outstanding commitments to originate fixed and variable-rate loans with market interest rates ranging from 3.75% to 5.50%. At September 30, 2015, the Company had $2.5 million in outstanding commitments to originate fixed and variable-rate loans with market interest rates ranging from 4.25% to 5.25%. The aggregate undisbursed portion of loans-in-process amounted to $12.8 million at March 31, 2016 and $17.0 million at September 30, 2015.

The Company also had commitments under unused lines of credit of $3.4 million as of March 31, 2016 and $6.1 million as of September 30, 2015 and letters of credit outstanding of $2.9 million as of March 31, 2016 and $2.6 million as of September 30, 2015.

Among the Company’s contingent liabilities are exposures to limited recourse arrangements with respect to the Company’s sales of whole loans and participation interests. At March 31, 2016, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $49,000. This exposure is for the life of the related loans and payables, on our proportionate share, as actual losses are incurred.

The Company is involved in various legal proceedings occurring in the ordinary course of business. Management of the Company, based on discussions with litigation counsel, believes that such proceedings will not have a material adverse effect on the financial condition, operations or cash flows of the Company. However, there can be no assurance that any of the outstanding legal proceedings to which the Company is a party will not be decided adversely to the Company's interests and not have a material adverse effect on the financial condition and operations of the Company.

10. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2016 and September 30, 2015, respectively. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Generally accepted accounting principles used in the United States establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

The three broad levels of hierarchy are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Those assets as of March 31, 2016 which are to be measured at fair value on a recurring basis are as follows:

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	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,974	$	-	$	18,974
Mortgage-backed securities - U.S. Government agencies		-		104,581		-		104,581
Corporate bonds		-		19,644				19,644
FHLMC preferred stock		36		-		-		36
Total	$	36	$	143,199	$	-	$	143,235

Those assets as of September 30, 2015 which are measured at fair value on a recurring basis are as follows:

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,712	$	-	$	18,712
Mortgage-backed securities - U.S. Government agencies		-		58,712		-		58,712
FHLMC preferred stock		59		-		-		59
Total	$	59	$	77,424	$	-	$	77,483

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company measures impaired loans and real estate owned at fair value on a non-recurring basis.

Impaired Loans

The Company considers loans to be impaired when it becomes more likely than not that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreements. Collateral dependent impaired loans are based on the fair value of the collateral which is based on appraisals and would be categorized as Level 2 measurement.  In some cases, adjustments are made to the appraised values for various factors including the age of the appraisal, age of the comparable included in the appraisal, and known changes in the market and in the collateral. These adjustments are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement. These loans are reviewed for impairment and written down to their net realizable value by charges against the allowance for loan losses. The collateral underlying these loans had a fair value in excess of $19.0 million, as of March 31, 2016.

Real Estate Owned

Once an asset is determined to be uncollectible, the underlying collateral is generally repossessed and reclassified to foreclosed real estate and repossessed assets. These repossessed assets are carried at the lower of cost or fair value of the collateral, based on independent appraisals, less cost to sell and would be categorized as Level 2 measurement. In some cases, adjustments are made to the appraised values for various factors including age of the appraisal, age of the comparable included in the appraisal, and known changes in the market and in the collateral. Thus the evaluations are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement.

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Summary of Non-Recurring Fair Value Measurements

	At March 31, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,975	$	18,975
Total	$	-	$	-	$	18,975	$	18,975

	At September 30, 2015
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,770	$	16,770
Real estate owned		-		869		-		869
Total	$	-	$	869	$	16,770	$	17,639

The following table provides information describing the valuation processes used to determine nonrecurring fair value measurements categorized within Level 3 of the fair value hierarchy:

	At March 31, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,975	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2015
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,770	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount
Real estate owned	$	869	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs, which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

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The fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

					Fair Value Measurements at
					March 31, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	7,330	$	7,330	$	7,330	$	-	$	-
Investment and mortgage-backed securities available for sale		143,235		143,235		36		143,199		-
Investment and mortgage-backed securities held to maturity		44,488		45,591		-		45,591		-
Loans receivable, net		322,182		322,200		-		-		322,200
Accrued interest receivable		1,774		1,774		1,774		-		-
Federal Home Loan Bank stock		1,851		1,851		1,851		-		-
Bank owned life insurance		12,890		12,890		12,890		-		-
Liabilities:
Checking accounts		38,776		38,776		38,776		-		-
Money market deposit accounts		57,470		57,470		57,470		-		-
Passbook, club and statement savings accounts		69,999		69,999		69,999		-		-
Certificates of deposit		217,825		220,340		-		-		220,340
Advances from Federal Home Loan Bank		37,059		37,096		-		-		37,096
Accrued interest payable		543		543		543		-		-
Advances from borrowers for taxes and insurance		1,777		1,777		1,777		-		-

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					Fair Value Measurements at
					September 30, 2015
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	11,272	$	11,272	$	11,272	$	-	$	-
Investment and mortgage-backed securities available for sale		77,483		77,483		59		77,424		-
Investment and mortgage-backed securities held to maturity		66,384		66,877		-		66,877		-
Loans receivable, net		312,633		312,613		-		-		312,613
Accrued interest receivable		1,665		1,665		1,665		-		-
Federal Home Loan Bank stock		369		369		369		-		-
Bank owned life insurance		12,722		12,722		12,722		-		-
Liabilities:
Checking accounts		37,942		37,942		37,942		-		-
Money market deposit accounts		60,736		60,736		60,736		-		-
Passbook, club and statement savings accounts		70,355		70,355		70,355		-		-
Certificates of deposit		196,041		199,639		-		-		199,639
Accrued interest payable		1,291		1,291		1,291		-		-
Advances from borrowers for taxes and insurance		1,670		1,670		1,670		-		-

Cash and Cash Equivalents—For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

Investments and Mortgage-Backed Securities—The fair value of investment securities and mortgage-backed securities is based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Loans Receivable—The fair value of loans is estimated based on present value using the current market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying value that fair value is compared to is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified within Level 3 of the fair value hierarchy.

Accrued Interest Receivable – For accrued interest receivable, the carrying amount is a reasonable estimate of fair value.

Federal Home Loan Bank (FHLB) Stock—Although FHLB stock is an equity interest in an FHLB, it is carried at cost because it does not have a readily determinable fair value as its ownership is restricted and it lacks a market. The estimated fair value approximates the carrying amount.

Bank Owned Life Insurance—The fair value of bank owned life insurance is based on the cash surrender value obtained from an independent advisor that is derivable from observable market inputs.

Checking Accounts, Money Market Deposit Accounts, Passbook Accounts, Club Accounts, Statement Savings Accounts, and Certificates of Deposit—The fair value of passbook accounts, club accounts, statement savings accounts, checking accounts, and money market deposit accounts is the amount reported in the financial statements. The fair value of certificates of deposit is based on market rates currently offered for deposits of similar remaining maturity.

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Advances from Federal Home Loan Bank—The fair value of advances from FHLB is the amount payable on demand at the reporting date.

Accrued Interest Payable – For accrued interest payable, the carrying amount is a reasonable estimate of fair value.

Advances from borrowers for taxes and insurance – For advances from borrowers for taxes and insurance, the carrying amount is a reasonable estimate of fair value.

Commitments to Extend Credit and Letters of Credit—The majority of the Bank’s commitments to extend credit and letters of credit carry current market interest rates if converted to loans. Because commitments to extend credit and letters of credit are generally unassignable by either the Bank or the borrower, they only have value to the Bank and the borrower. The estimated fair value approximates the recorded deferred fee amounts, which are not significant.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our unaudited consolidated financial statements included elsewhere in this Form 10-Q and with our Annual Report on Form 10-K for the year ended September 30, 2015 (the “Form 10-K”).

Overview. Prudential Bancorp, Inc. (the “Company”) was formed by Prudential Bancorp, Inc. of Pennsylvania to become the successor holding company for Prudential Savings Bank (the “Bank”) as a result of the second-step conversion completed in October 2013. The Company’s results of operations are primarily dependent on the results of the Bank, which is a wholly owned subsidiary of the Company. The Company’s results of operations depend to a large extent on net interest income, which primarily is the difference between the income earned on its loan and securities portfolios and the cost of funds, which is the interest paid on deposits and borrowings. Results of operations are also affected by our provisions for loan losses, non-interest income (which includes impairment charges) and non-interest expense. Non-interest expense principally consists of salaries and employee benefits, office occupancy expense, depreciation, data processing expense, payroll taxes and other expense. Our results of operations are also significantly affected by general economic and competitive conditions, particularly changes in interest rates, government policies and actions of regulatory authorities. Future changes in applicable laws, regulations or government policies may materially impact our financial condition and results of operations. The Bank is subject to regulation by the Federal Deposit Insurance Corporation (the “FDIC”) and the Pennsylvania Department of Banking and Securities (the “Department”). The Bank’s main office is in Philadelphia, Pennsylvania, with five additional full-service banking offices located in Philadelphia and Delaware Counties in Pennsylvania. The Bank’s primary business consists of attracting deposits from the general public and using those funds together with borrowings to originate loans and to invest primarily in U.S. Government and agency securities and mortgage-backed securities. In November 2005, the Bank formed PSB Delaware, Inc., a Delaware corporation, as a subsidiary of the Bank. In March 2006, all mortgage-backed securities then owned by the Company’s predecessor were transferred to PSB Delaware, Inc. PSB Delaware, Inc.’s activities are included as part of the consolidated financial statements.

Critical Accounting Policies. In reviewing and understanding financial information for the Company, you are encouraged to read and understand the significant accounting policies used in preparing our financial statements. These policies are described in Note 1 of the notes to our unaudited consolidated financial statements included in Item 1 hereof as well as in Note 2 to our audited consolidated financial statements included in the Form 10-K. The accounting and financial reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“U.S. GAAP”) and to general practices within the banking industry. Accordingly, the financial statements require certain estimates, judgments and assumptions, which are believed to be reasonable, based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities as well as contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of income and expenses during the periods presented. The following accounting policies comprise those that management believes are the most critical to aid in fully understanding and evaluating our reported financial results. These policies require numerous estimates or economic assumptions that may prove inaccurate or may be subject to variations which may significantly affect our reported results and financial condition for the period or in future periods.

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Allowance for Loan Losses. The allowance for loan losses is established through a provision for loan losses charged to expense. Losses are charged against the allowance for loan losses when management believes that the collectability in full of the principal of a loan is unlikely. Subsequent recoveries are added to the allowance. The allowance for loan losses is maintained at a level that management considers adequate to provide for estimated losses and impairments based upon an evaluation of known and inherent losses in the loan portfolio that are both probable and reasonable to estimate. Loan impairment is evaluated based on the fair value of collateral or estimated net realizable value. It is the policy of management to provide for losses on unidentified loans in its portfolio in addition to criticized and classified loans.

Management monitors its allowance for loan losses at least quarterly and makes adjustments to the allowance through the provision for loan losses as economic conditions and other pertinent factors indicate. The quarterly review and adjustment of the qualitative factors employed in the allowance methodology and the updating of historic loss experience allow for timely reaction to emerging conditions and trends.  In this context, a series of qualitative factors are used in a methodology as a measurement of how current circumstances are affecting the loan portfolio. Included in these qualitative factors are:

· Levels of past due, classified, criticized and non-accrual loans, troubled debt restructurings and loan modifications;

· Nature and volume of loans;

· Changes in lending policies and procedures, underwriting standards, collections, charge-offs and recoveries and for commercial loans, the level of loans being approved with exceptions to the Bank’s lending policy;

· Experience, ability and depth of management and staff;

· National and local economic and business conditions, including various market segments;

· Quality of the Company’s loan review system and the degree of Board oversight;

· Concentrations of credit and changes in levels of such concentrations; and

· Effect of external factors on the level of estimated credit losses in the current portfolio.

In determining the allowance for loan losses, management has established a general pooled allowance. Values assigned to the qualitative factors and those developed from historic loss experience provide a dynamic basis for the calculation of reserve factors for both pass-rated loans (the general pooled allowance) and those for criticized and classified loans. The amount of the specific allowance is determined through a loan-by-loan analysis of certain large dollar commercial real estate loans, construction and land development loans and multi-family. Loans not individually reviewed are evaluated as a group using reserve factor percentages based on historical loss experience and the qualitative factors described above. In determining the appropriate level of the general pooled allowance, management makes estimates based on internal risk ratings, which take into account such factors as debt service coverage, loan-to-value ratios and external factors. Estimates are periodically measured against actual loss experience.

This evaluation is inherently subjective as it requires material estimates including, among others, exposure at default, the amount and timing of expected future cash flows on impaired loans, value of collateral, estimated losses on our commercial, construction and residential loan portfolios and historical loss experience. All of these estimates may be susceptible to significant change.

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While management uses the best information available to make loan loss allowance evaluations, adjustments to the allowance may be necessary based on changes in economic and other conditions or changes in accounting guidance. In addition, the Department and the FDIC, as an integral part of their examination processes, periodically review our allowance for loan losses. The Department and the FDIC may require the recognition of adjustments to the allowance for loan losses based on their judgment of information available to them at the time of their examination. To the extent that actual outcomes differ from management’s estimates, additional provisions to the allowance for loan losses may be required that would adversely affect earnings in future periods.

Investment and mortgage-backed securities available for sale.  Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, then fair values are estimated using quoted prices of securities with similar characteristics or discounted cash flows and are classified within Level 2 of the fair value hierarchy. In certain cases where there is limited activity or less transparency around inputs to the valuation, securities are classified within Level 3 of the valuation hierarchy, although there were no securities with that classification as of March 31, 2016 or September 30, 2015. 

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. The Company determines whether the unrealized losses are temporary or not in accordance with U.S. GAAP.  The evaluation is based upon factors such as the creditworthiness of the issuers/guarantors, the underlying collateral, if applicable, and the continuing performance of the securities. In addition, the Company also considers the likelihood that the security will be required to be sold because of regulatory concerns, our internal intent not to dispose of the security prior to maturity and whether the entire cost basis of the security is expected to be recovered. In determining whether the cost basis will be recovered, management evaluates other facts and circumstances that may be indicative of an “other-than-temporary” impairment condition. This includes, but is not limited to, an evaluation of the type of security, length of time and extent to which the fair value has been less than cost, and near-term prospects of the issuer.

In addition, certain assets are measured at fair value on a non-recurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company measures impaired loans and investment securities, both available-for-sale (“AFS”) and held-to-maturity (“HTM”), at fair value on a non-recurring basis.  

Valuation techniques and models utilized for measuring financial assets and liabilities are reviewed and validated by the Company at least quarterly.

Income Taxes. The Company accounts for income taxes in accordance with U.S. GAAP. The Company records deferred income taxes that reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Management exercises significant judgment in the evaluation of the amount and timing of the recognition of the resulting tax assets and liabilities. The judgments and estimates required for the evaluation are updated based upon changes in business factors and the tax laws. If actual results differ from the assumptions and other considerations used in estimating the amount and timing of tax recognized, there can be no assurance that additional expenses will not be required in future periods.

In evaluating our ability to recover deferred tax assets, we consider all available positive and negative evidence, including our past operating results and our forecast of future taxable income. In determining future taxable income, we make assumptions for the amount of taxable income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require us to make judgments about our future taxable income and are consistent with the plans and estimates we use to manage our business. Any reduction in estimated future taxable income may require us to record an additional valuation allowance against our deferred tax assets. An increase in the valuation allowance would result in additional income tax expense in the period and could have a significant impact on our future earnings.

U.S. GAAP prescribes a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized. The Company recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the consolidated income statement.  Assessment of uncertain tax positions requires careful consideration of the technical merits of a position based on management's analysis of tax regulations and interpretations.  Significant judgment may be involved in the assessment of the tax position.

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Forward-looking Statements. In addition to historical information, this Quarterly Report on Form 10-Q includes certain "forward-looking statements" based on management's current expectations. The Company's actual results could differ materially, as such term is defined in the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, from management's expectations. Such forward-looking statements include statements regarding management's current intentions, beliefs or expectations as well as the assumptions on which such statements are based. These forward-looking statements are subject to significant business, economic and competitive uncertainties and contingencies, many of which are not subject to the Company's control. You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. Factors that could cause future results to vary from current management expectations include, but are not limited to, general economic conditions, legislative and regulatory changes, monetary and fiscal policies of the federal government, changes in tax policies, rates and regulations of federal, state and local tax authorities, changes in interest rates, deposit flows, the cost of funds, demand for loan products, demand for financial services, competition, changes in the quality or composition of the Company's loan and investment portfolios, changes in accounting principles, policies or guidelines and other economic, competitive, governmental and technological factors affecting the Company's operations, markets, products, services and fees.

The Company undertakes no obligation to update or revise any forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results that occur subsequent to the date such forward-looking statements are made unless required by law or regulations.

Market Overview. Although the economy slowly improved during 2014 and 2015, we still view the current environment as challenging.

The Company continues to focus on the credit quality of its customers, closely monitoring the financial status of borrowers throughout the Company’s markets, gathering information, working on early detection of potential problems, taking pre-emptive steps where necessary and performing the analysis required to maintain adequate reserves for loan losses. 

Despite the current market and economic conditions, the Company continues to maintain capital well in excess of regulatory requirements.

The following discussion provides further details on the financial condition of the Company at March 31, 2016 and September 30, 2015, and the results of operations for the three months ended December 31, 2015 and 2014.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2016 AND SEPTEMBER 30, 2015

At March 31, 2016, the Company had total assets of $537.5 million, as compared to $487.2 million at September 30, 2015, an increase of 10.3%. The increase in total assets was primarily due to the implementation of an investment leverage strategy where the Bank purchased $20.0 million of GNMA mortgage-backed securities and $15.0 million investment grade corporate bonds funded by variable-term FHLB advances. In addition the Bank increased its outstanding loan balance by $9.5 million or 3.1% to $322.2 million at March 31, 2016.

Total liabilities increased by $55.0 million to $425.2 million at March 31, 2016 from $370.2 million at September 30, 2015. Total deposits increased $19.0 million, primarily due to a $21.8 million in short-term certificate of deposits, partially offset by a decline of $3.3 million in money market accounts. During the quarter ended March 31, 2016, the Bank maintained FHLB advances of $37.1 million with variable maturities of which $35.0 million was used to fund the Bank’s investment leverage strategy mentioned above.

45

Total stockholders’ equity decreased by $4.7 million to $112.3 million at March 31, 2016 from $117.0 million at September 30, 2015. The decrease was primarily due to the $6.7 million expended in the acquisition of treasury stock in connection with the Company’s stock repurchase program and to a lesser degree the declaration of approximately $452,000 in cash dividends. This decrease was partially offset by $961,000 in net income during the six months ended March 31, 2016 combined with a $765,000 after-tax increase in the value of the available-for-sale securities portfolio.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2016 AND 2015

Net income. The Company recognized net income of $548,000, or $0.08 per basic share and per diluted share, for the quarter ended March 31, 2016 as compared to $1.7 million, or $0.20 per basic and $0.18 per diluted share, for the same quarter in 2015. For the six months ended March 31, 2016, the Company recognized net income of $961,000 or $0.13 per basic and $0.12 per diluted share, as compared to net income of $2.2 million, or $0.25 per basic share and $0.22 per diluted share, for the comparable period in 2015. The profitability for the three and six months ended March 31, 2016 was primarily due to the Company’s efforts in the reduction of operating expenses, whereas the same periods in 2015 was primarily due to the recognition of approximately $1.8 million in gain on the completion of the previously announced agreement sale of our Center City branch office. The Company was able to offset the federal tax impact due to the utilization of prior capital loss carryforwards available to it.

Net interest income. For the three months ended March 31, 2016, net interest income increased to $3.5 million as compared to $3.4 million for the same period in 2015. The increase reflected an $62,000 or 1.4% increase in interest income combined with a decrease of $22,000 or 2.5% in interest paid on deposits and borrowings. The increase in interest income primarily resulted from the increase of $63.7 million in the average outstanding balance of mortgage-backed securities partially resulting from the implementation a leverage strategy. The increase in interest income was partially offset by a decrease in the overall yield on interest-earning assets of 5 basis points. To partially fund the growth in earning assets and the purchase additional treasury stock, the Company increased borrowings from the FHLB. During the quarter ended March 31, 2016, the Company maintained an average balance of $32.3 million with a weighted average yield of 1.32%, an increase of $32.1 million from the same period in 2015. Total cost of funds decreased nine basis points to 0.82% at March 31, 2016, from 0.91% from the same period in 2015 due to the maturity of higher yielding certificates of deposits and the reduction in the rate paid on core deposits.

Net interest income remained stable at $6.8 million for both six months ended March 31, 2016 and 2015. Interest income decreased $121,000 to $8.4 million for the six month period ended March 31, 2016, compared to $8.5 million for the same period in 2015. This decrease was offset by a decrease in interest expense of $123,000 from the comparable period in 2015. The decrease in interest expense resulted primarily from an 8 basis point decrease to 0.83% in the weighted average rate paid on interest-bearing liabilities resulting in large part to a reduction in interest rates paid on core deposits and certificates of deposit, partially offset by an increase in the average balance outstanding of FHLB advances. A majority of these advances were used to fund the Company’s leverage strategy. The decrease in interest income resulted from a 1 basis point decrease to 3.39% in the weighted average yield earned on interest-earning assets and by an $8.6 million or 1.4% decrease to $495.1 million in the average balance of interest-earning assets for the six months ended March 31, 2016 as compared to the same period in fiscal 2015. The decrease in the weighted average yield earned was primarily reflected the reduction of yields earned on loans and mortgage-backed securities.

For the three months ended March 31, 2016, the net interest margin was 2.73% compared to 2.77% for the same period in fiscal 2015. For the six months ended March 31, 2016, the net interest margin was 2.73% as compared to 2.70% for the same period in fiscal 2015. The improvement in the net interest margin during the six month period of fiscal 2016 was primarily due to the Company’s effort in reducing the overall cost of its funds.

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Average balances, net interest income, and yields earned and rates paid. The following table shows for the periods indicated the total dollar amount of interest earned from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities and the resulting costs, expressed both in dollars and rates, the interest rate spread and the net interest margin. Average yields and rates have been annualized. Tax-exempt income and yields have not been adjusted to a tax-equivalent basis. All average balances are based on monthly balances. Management does not believe that the monthly averages differ significantly from what the daily averages would be.

	Three Months Ended March 31,
	2016								2015
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	60,871	$	415			2.73	%	$	84,085	$	552			2.66	%
Mortgage-backed securities		120,971		777			2.58			57,240		450			3.19
Loans receivable(2)		322,133		3,166			3.94			330,341		3,287			4.04
Other interest-earning assets		7,290		8			0.44			30,326		15			0.20
Total interest-earning assets		511,265		4,366			3.43			501,992		4,304			3.48
Cash and non-interest-bearing balances		1,912								2,222
Other non-interest-earning assets		19,009								16,510
Total assets	$	532,186							$	520,724
Interest-bearing liabilities:
Savings accounts	$	72,333		22			0.12		$	73,432		53			0.29
Money market deposit and NOW accounts		94,716		46			0.19			99,612		85			0.35
Certificates of deposit		213,597		674			1.27			212,027		732			1.40
Total deposits		380,646		742			0.78			385,071		870			0.92
Advances from Federal Home Loan Bank		32,287		106			1.32			221		-			0.00
Advances from borrowers for taxes and insurance		1,998		1			0.20			2,300		1			0.18
Total interest-bearing liabilities		414,931		849			0.82			387,592		871			0.91
Non-interest-bearing liabilities:
Non-interest-bearing demand accounts		2,721								2,204
Other liabilities		427								972
Total liabilities		418,079								390,768
Stockholders' equity		114,107								129,956
Total liabilities and stockholders' equity	$	532,186							$	520,724
Net interest-earning assets	$	96,334							$	114,400
Net interest income; interest rate spread			$	3,517			2.52	%			$	3,433			2.57	%
Net interest margin(3)							2.73	%							2.77	%
Average interest-earning assets to average interest-bearing liabilities				123.22	%							129.52	%

_______________________________

(1) Yields and rates for the three month periods are annualized.

(2) Includes non-accrual loans. Calculated net of unamortized deferred fees, undisbursed portion of loans-in-process and the allowance for loan losses.

(3) Equals net interest income divided by average interest-earning assets.

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	Six Months Ended March 31,
	2016								2015
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	64,973	$	855			2.62	%	$	85,293	$	1,100			2.59	%
Mortgage-backed securities		101,962		1,328			2.60			56,338		866			3.08
Loans receivable(2)		318,570		6,226			3.90			328,235		6,544			4.00
Other interest-earning assets		9,547		13			0.27			33,741		34			0.20
Total interest-earning assets		495,052		8,422			3.39			503,607		8,544			3.40
Cash and non-interest-bearing balances		1,940								2,241
Other non-interest-earning assets		19,420								17,419
Total assets	$	516,412							$	523,267
Interest-bearing liabilities:
Savings accounts	$	72,665		47			0.13		$	74,841		110			0.29
Money market deposit and NOW accounts		93,339		96			0.21			100,392		173			0.35
Certificates of deposit		203,440		1,350			1.32			211,923		1,487			1.41
Total deposits		369,444		1,493			0.81			387,156		1,770			0.92
Advances from Federal Home Loan Bank		23,306		154			1.32			281		-			0.00
Advances from borrowers for taxes and insurance		1,892		2			0.21			2,028		2			0.20
Total interest-bearing liabilities		394,642		1,649			0.83			389,465		1,772			0.91
Non-interest-bearing liabilities:
Non-interest-bearing demand accounts		2,689								2,306
Other liabilities		3,219								2,163
Total liabilities		400,550								393,934
Stockholders' equity		115,861								129,333
Total liabilities and stockholders' equity	$	516,411							$	523,267
Net interest-earning assets	$	100,410							$	114,142
Net interest income; interest rate spread			$	6,773			2.56	%			$	6,772			2.57	%
Net interest margin(3)							2.73	%							2.70	%
Average interest-earning assets to average interest-bearing liabilities				125.44	%							129.31	%

________________________________

(1) Yields and rates for the six month periods are annualized.

(2) Includes non-accrual loans. Calculated net of unamortized deferred fees, undisbursed portion of loans-in-process and the allowance for loan losses.

(3) Equals net interest income divided by average interest-earning assets.

Provision for loan losses. The Company established provisions for loan losses of $75,000 during the three and six months ended March 31, 2016, primarily due to the increased level of commercial real estate and construction loans outstanding. During the three and six months ended March 31, 2015, the Company established provisions for loan losses of $300,000 and $375,000, respectively, primarily due to the increase in the level of commercial real estate and construction loans outstanding as well as to the charge-offs incurred during the second quarter of fiscal 2015 combined with the classification of the entire outstanding amount of the Company’s largest loan relationship as non-performing. During the six months ended March 31, 2016, the Company recorded charge-offs totaling $11,000, along with a recovery of $44,000 during the three and six months ended March 31, 2016. The Bank’s largest lending relationship, which consists of eight loans aggregating $10.9 million, is classified as non-performing due to concerns with projected cash flows available to fund its future obligations. During the quarter, the Bank attempted to re-negotiate the payment priorities from the proceeds generated from the sales of individual units from the primary project. When the Bank and borrower did not achieved an acceptable agreement, the Bank initiated a demand for full payment. As of March 31, 2016, the complete relationship was analyzed for impairment using the standards required in Accounting Standards Codification Topic 310 (formerly FASB No. 114). The relationship was deemed to have sufficient collateral, thereby no impairment was recognized. The borrower’s primary project, the development of 169 residential lots, has received all required permits and preparation of the necessary infrastructure has commenced. The Company believes that the allowance for loan losses at March 31, 2016 was sufficient to cover all inherent and known losses associated with the loan portfolio at such date.

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The Company’s methodology for assessing the adequacy of the allowance establishes both specific and general pooled allocations of the allowance.  Loans are assigned ratings, either individually for larger credits or in homogeneous pools, based on an internally developed grading system.  The resulting determinations are reviewed and approved by senior management.

At March 31, 2016, the Company’s non-performing assets totaled $15.2 million or 2.8% of total assets as compared to $13.9 million or 3.0% of total assets at September 30, 2015, all of which was due to the placement on non-accrual of the entire loan relationship described above. Non-performing loans and assets at March 31, 2016 included five construction loans aggregating $9.5 million, 16 one-to four-family residential loans aggregating $2.7 million, one single-family residential investment property loan totaling $1.4 million and three commercial real estate loans aggregating $1.5 million. At March 31, 2016, the Company had ten loans aggregating $7.9 million that were classified as troubled debt restructurings (“TDRs”). Three of such loans aggregating $5.6 million as of March 31, 2016 were classified as non-performing as a result of not achieving a sufficiently long payment history, under the restructured terms, to justify returning the loans to performing (accrual) status. Two of these three loans totaling $4.2 million (which are part of the Company’s largest relationship discussed above) are 60-89 days past due resulting from the discontinuation of funding by the Company due to the re-negotiation of the project’s cash flows. The remaining eight TDRs have performed in accordance with the terms of their revised agreements. As of March 31, 2016, the Company had reviewed $19.0 million of loans for possible impairment of which $14.0 million was deemed classified as substandard compared to $16.7 million reviewed for possible impairment and $12.4 million of which was classified substandard as of September 30, 2015. At March 31, 2016, “substandard” loans consisted of 20 loans. We did not have any assets classified as “doubtful” or “loss” at either March 31, 2016 or September 30, 2015.

The allowance for loan losses totaled $3.0 million, or 0.9% of total loans and 18.9% of total non-performing loans at March 31, 2016 as compared to $2.9 million, or 0.9% of total loans and 21.0% of total non-performing loans at September 30, 2015.

At March 31, 2016, the Company had $2.8 million of loans delinquent 30-89 days as to interest and/or principal. Such amount consisted of 14 one-to-four family loans totaling $2.6 million, two commercial real estate loans totaling $272,000 and two consumer loans totaling $109,000.

At March 31, 2016, we also had a total of five loans totaling $2.7 million that had been designated “special mention”. These loans consist of three loans extended to a single borrower and are secured by real estate. All of the loans were designated “special mention” due to concerns with regard to the borrower’s cash flow situation. At September 30, 2015, we had a total of eight loans aggregating $3.4 million designated as “special mention”.

The following table shows the amounts of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past and real estate owned) as of December 31, 2015 and September 30, 2015. At neither date did the Company have any accruing loans 90 days or more past due that were accruing.

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	March 31, 2016			September 30, 2015
	(Dollars in Thousands)
Non-accruing loans:
One-to-four family residential	$	4,145		$	3,547
Commercial real estate		1,535			1,589
Construction and land development		9,503			8,796
Total non-accruing loans		15,184			13,932
Real estate owned, net:  (1)		-			869
Total non-performing assets	$	15,184		$	14,801
Total non-performing loans as a percentage of loans, net		4.71	%		4.46	%
Total non-performing loans as a percentage of total assets		2.82	%		3.04	%
Total non-performing assets as a percentage of total assets		2.82	%		3.04	%

(1) Real estate owned balances are shown net of related loss allowances and consist solely of real property.

Non-interest income. Non-interest income amounted to $209,000 and $483,000 for the three and six month periods ended March 31, 2016, compared to $2.0 million and $2.3 million, respectively, for the comparable periods in 2015. The primary variance between 2016 and 2015 was attributed to the $1.8 million gain on the sale of our Center City branch office as well as the recognition of a $138,000 gain on the sale of a loan originated through the Small Business Administration program. By comparison, during the three and six month periods ended March 31, 2016, the Company recorded increased service charges and other income.

Non-interest expense. For the three and six month periods ended March 31, 2016, non-interest expense decreased $715,000 or 20.4% and $745,000 or 11.6%, respectively, compared to the same periods in the prior year. The primary reasons for the decreases for the three and six month periods ended March 31, 2016 were decreases in salaries and employee benefits (primarily reduction in the expense of Equity benefits), professional services, office occupancy, advertising and other operating expenses. The reduction in operating expenses were a direct result of a comprehensive expense reduction plan announced at the beginning of the fiscal year.

Income tax expense. For the three month period ended March 31, 2015, the Company recorded a tax expense of $307,000, compared to a $91,000 tax benefit for the same period in 2015. For the six month period ended March 31, 2016, the Company recorded income tax expense of $528,000 as compared to $126,000 for the same period in 2015. The Company’s tax obligation for both three and six month periods in fiscal 2015 was greatly reduced due its ability to utilize its prior period capital loss carryforwards to offset the entire amount of the gain it recorded relating to the sale of its Center City branch office.

50

LIQUIDITY AND CAPITAL RESOURCES

The Company’s liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. Our primary sources of funds are deposits, scheduled principal and interest payments on loans, loan prepayments and the maturity of loans, mortgage-backed securities and other investments, and other funds provided from operations. While scheduled payments from the amortization of loans and mortgage-backed securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan and securities prepayments can be greatly influenced by market rates of interest, economic conditions and competition. We also maintain excess funds in short-term, interest-earning assets that provide additional liquidity. At March 31, 2016, our cash and cash equivalents amounted to $7.3 million. In addition, our AFS investment securities amounted to an aggregate of $143.2 million at such date.

We use our liquidity to fund existing and future loan commitments, to fund maturing certificates of deposit and demand deposit withdrawals, to invest in other interest-earning assets, and to meet operating expenses. At March 31, 2016, the Company had $23.1 million in outstanding commitments to originate fixed and variable-rate loans, not including loans in process. The Company also had commitments under unused lines of credit of $3.3 million and letters of credit outstanding of $2.8 million at March 31, 2016. Certificates of deposit as of March 31, 2016 that are maturing in one year or less totaled $131.4 million. Based upon historical experience, we anticipate that a significant portion of the maturing certificates of deposit will be redeposited with us.

In addition to cash flows from loan and securities payments and prepayments as well as from sales of available for sale securities, we have significant borrowing capacity available to fund liquidity needs should the need arise. Our borrowings consist solely of advances from the Federal Home Loan Bank of Pittsburgh (“FHLB”), of which we are a member. Under terms of the collateral agreement with the FHLB, we pledge residential mortgage loans as well as our stock in the FHLB as collateral for such advances. At March 31, 2016, we had $37.1 million in outstanding FHLB advances and had the ability to obtain an additional $157.7 million in FHLB advances. Additional borrowing capacity with the FHLB could be obtained with the pledging of certain investment securities. The Bank has also obtained approval to borrow from the Federal Reserve Bank discount window.

We anticipate that we will continue to have sufficient funds and alternative funding sources to meet our current commitments.

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The following table summarizes the Company’s and Bank’s regulatory capital ratios as of March 31, 2016 and September 30, 2015 and compares them to current regulatory guidelines.

							To Be
							Well Capitalized
				Required for			Under Prompt
				Capital Adequacy			Corrective Action
	Actual Ratio			Purposes			Provisions
March 31, 2016:
Tier 1 capital (to average assets)
The Company		20.76	%		N/A			N/A
The Bank		18.28	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		42.36	%		N/A			N/A
The Bank		37.38	%		5.1	%(a)		6.5	%
Tier 1 capital (to risk-weighted assets)
The Company		42.07	%		N/A			N/A
The Bank		37.09	%		6.6	%(a)		8.0	%
Total capital (to risk-weighted assets)
The Company		43.25	%		N/A			N/A
The Bank		38.27	%		8.6	%(a)		10.0	%
September 30, 2015:
Tier 1 capital (to average assets)
Company		23.73	%		N/A			N/A
Bank		19.50	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		50.63	%		N/A			N/A
The Bank		41.66	%		4.5	%		6.5	%
Tier 1 capital (to risk-weighted assets)
Company		50.63	%		N/A			N/A
Bank		41.65	%		4.0	%		6.0	%
Total capital (to risk-weighted assets)
Company		51.98	%		N/A			N/A
Bank		43.00	%		8.0	%		10.0	%
(a) Includes initial phase-in of capital conservation buffer.

IMPACT OF INFLATION AND CHANGING PRICES

The financial statements, accompanying notes, and related financial data of the Company presented herein have been prepared in accordance with generally accepted accounting principles which require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation.

Unlike most industrial companies, substantially all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates have a more significant impact on a financial institution's performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as the price of goods and services, since such prices are affected by inflation to a larger extent than interest rates. In the current interest rate environment, liquidity and the maturity structure of the Company's assets and liabilities are critical to the maintenance of acceptable performance levels.

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How We Manage Market Risk. Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest rate risk which is inherent in our lending, investment and deposit gathering activities. To that end, management actively monitors and manages interest rate risk exposure. In addition to market risk, our primary risk is credit risk on our loan portfolio. We attempt to manage credit risk through our loan underwriting and oversight policies.

The principal objective of our interest rate risk management function is to evaluate the interest rate risk embedded in certain balance sheet accounts, determine the level of risk appropriate given our business strategy, operating environment, capital and liquidity requirements and performance objectives, and manage the risk consistent with approved guidelines. We seek to manage our exposure to risks from changes in interest rates while at the same time trying to improve our net interest spread. We monitor interest rate risk as such risk relates to our operating strategies. We have established an Asset/Liability Committee which is comprised of our President and Chief Executive Officer, Chief Financial Officer, Chief Lending Officer, Treasurer and Controller. The Asset/Liability Committee meets on a regular basis and is responsible for reviewing our asset/liability policies and interest rate risk position. Both the extent and direction of shifts in interest rates are uncertainties that could have a negative impact on future earnings.

In recent years, as a part of our asset/liability management strategy we primarily have reduced our investment in longer term fixed-rate callable agency bonds, increased our origination of hybrid adjustable-rate single-family residential mortgage loans and increased our portfolio of step-up callable agency bonds and agency issued collaterized mortgage-backed securities (“CMOs”) with short effective life. However, notwithstanding the foregoing steps, we remain subject to a significant level of interest rate risk in a low interest rate environment due to the high proportion of our loan portfolio that consists of fixed-rate loans as well as our decision in prior periods to invest a significant amount of our assets in long-term, fixed-rate investment and mortgage-backed securities.

Gap Analysis. The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring a Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to affect adversely net interest income.

The following table sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at March 31, 2016, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at March 31, 2016, on the basis of contractual maturities, anticipated prepayments, and scheduled rate adjustments within a three-month period and subsequent selected time intervals. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and anticipated prepayments of adjustable-rate loans and fixed-rate loans, and as a result of contractual rate adjustments on adjustable-rate loans. Annual prepayment rates for variable-rate and fixed-rate single-family and multi-family residential and commercial mortgage loans are assumed to range from 5.9% to 31.6%. The annual prepayment rate for mortgage-backed securities is assumed to range from 0.7% to 21.5%. For savings accounts, checking accounts and money markets, the decay rates vary on an annual basis over a ten year period.

53

	3 Months			More than 3 Months			More than 1 Year			More than 3 Years			More than			Total
	or Less			to 1 Year			to 3 Years			to 5 Years			5 Years			Amount
	(Dollars in Thousands)
Interest-earning assets(1):
Investment and mortgage-backed securities(2)	$	6,943		$	13,336		$	34,337		$	24,494		$	108,613		$	187,723
Loans receivable(3)		29,713			44,881			95,389			57,599			94,600			322,182
Other interest-earning assets(4)		5,300			1,851			-			-			-			7,151
Total interest-earning assets	$	41,956		$	60,068		$	129,726		$	82,093		$	203,213		$	517,056
Interest-bearing liabilities:
Savings accounts	$	1,994		$	5,647		$	9,299		$	8,962		$	44,097		$	69,999
Money market deposit and NOW accounts		3,334			10,002			16,541			5,340			61,029			96,246
Certificates of deposit		35,622			95,786			61,359			25,058			-			217,825
Advances from FHLB		6,788			2,381			26,950			940			-			37,059
Advances from borrowers for taxes and insurance		1,777			-			-			-			-			1,777
Total interest-bearing liabilities	$	49,515		$	113,816		$	114,149		$	40,300		$	105,126		$	422,906
Interest-earning assets less interest-bearing liabilities	$	(7,559	)	$	(53,748	)	$	15,577		$	41,793		$	98,087		$	94,150
Cumulative interest-rate sensitivity gap (5)	$	(7,559	)	$	(61,307	)	$	(45,730	)	$	(3,937	)	$	94,150
Cumulative interest-rate gap as a percentage of total assets at March 31 , 2016		-1.41	%		-11.41	%		-8.51	%		-0.73	%		17.51	%
Cumulative interest-earning assets as a percentage of cumulative interest- bearing liabilities at March 31, 2016		84.73	%		62.46	%		83.52	%		98.76	%		122.26	%

_____________________________________

(1) Interest-earning assets are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate adjustments and contractual maturities.

(2) For purposes of the gap analysis, investment securities are reflected at amortized cost.

(3) For purposes of the gap analysis, loans receivable includes non-performing loans and is gross of the allowance for loan losses and unamortized deferred loan fees, but net of the undisbursed portion of loans-in-process.

(4) Includes FHLB stock.

(5) Cumulative interest-rate sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities.

Certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, certain assets, such as variable-rate loans, have features which restrict changes in interest rates both on a short-term basis and over the life of the asset. Further, in the event of a change in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the table. Finally, the ability of many borrowers to service their variable-rate loans may be adversely affected in the event of an interest rate increase.

54

Net Portfolio Value Analysis. Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The “Sensitivity Measure” is the decline in the NPV ratio, in basis points, caused by a 2% increase or decrease in rates, whichever produces a larger decline. The following table sets forth our NPV as of March 31, 2016 and reflects the changes to NPV as a result of immediate and sustained changes in interest rates as indicated.

Change in											NPV as % of Portfolio
Interest Rates			Net Portfolio Value								Value of Assets
In Basis Points
(Rate Shock)			Amount		$ Change			% Change			NPV Ratio			Change
			(Dollars in Thousands)
	300		$	83,254	$	(43,164	)		(34.14	)%		17.86	%		(5.68	)%
	200			97,039		(29,379	)		(23.24	)%		19.86	%		(3.68	)%
	100			111,832		(14,586	)		(11.54	)%		21.81	%		(1.73	)%
	Static			126,418		-			-			23.54	%		-
	(100	)		129,346		2,928			2.32	%		23.50	%		(0.04	)%
	(200	)		131,269		4,851			3.84	%		23.44	%		(0.10	)%
	(300	)		139,333		12,915			10.22	%		24.45	%		0.91	%

At September 30, 2015, the Company’s NPV was $131.1 million or 27.2% of the market value of assets. Following a 200 basis point increase in interest rates, the Company’s “post shock” NPV would be $107.4 million or 24.4% of the market value of assets.

As is the case with the GAP Table, certain shortcomings are inherent in the methodology used in the above interest rate risk measurements. Modeling changes in NPV requires the making of certain assumptions which may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the models presented assume that the composition of our interest sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and also assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration to maturity or repricing of specific assets and liabilities. Accordingly, although the NPV model provides an indication of interest rate risk exposure at a particular point in time, such model is not intended to and does not provide a precise forecast of the effect of changes in market interest rates on net interest income and will differ from actual results.

55

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At March 31, 2016, there had not been any material change to the market risk disclosure contained in the Company’s Annual Report on Form 10-K for the year ended September 30, 2015, set forth in Item 7, “Management Discussion and Analysis of Financial Condition and Results of Operation –Exposure to Changes in Interest Rates.”

ITEM 4. CONTROLS AND PROCEDURES

Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of the end of period covered by this report, our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and regulations and are operating in an effective manner.

No change in our internal control over financial reporting (as defined in Rule 13a-15(f) or 15d-15(f) under the Securities Exchange Act of 1934) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

56

PART II

Item 1. Legal Proceedings

On March 31, 2016, Island View Properties, Inc., trading as Island View Crossing II, LP, and Renato J. Gualtieri (collectively, the “Gualtieri Parties”) filed suit in the Court of Common Pleas, Philadelphia, Pennsylvania, against Prudential Savings Bank (the “Bank”) seeking damages in an amount in excess of $27.0 million. The lawsuit asserts allegations related to a loan (the “Loan”) granted thereby to the Gualtieri Parties to develop a 169-unit townhouse and condominium project located in Bristol Borough in Bucks County, Pennsylvania (the “Island View Project”). The Gualtieri Parties allege that the Bank attempted to force the Gualtieri Parties to accept numerous and substantive changes to the Loan and in connection therewith, claim that the Bank, among other things, also (i) refused to honor a commitment to refinance or purchase a loan extended to the Gualtieri Parties by Lava Funding, LLC in accordance with the terms thereof; (ii) delayed and/or refused to advance funds under the terms of the Loan; (iii) refused to release escrowed funds; and (iv) threatened to foreclose on the Island View Project. The Gualtieri Parties allege the Bank, among other things, breached its obligations under the terms of the Loan and its duty of good faith and fair dealing.

Since the case is in its early stages and discovery has not commenced, no prediction can be made as to the outcome thereof. However, the Bank believes that it has meritorious defenses and it intends to vigorously defend the case. On May 2, 2016, the Bank filed a motion with the court seeking to dismiss the majority of claims asserted.

In a related case, on March 2, 2016, Lava Funding, LLC (“Lava”) filed suit in the Court of Common Pleas, Philadelphia, Pennsylvania against the Bank, Francesco Gualtieri, Renato Gualtieri and Island View Crossing II, LP. (“Island View Crossing”) seeking damages, with respect to the Bank, where it asserted that the Bank refused to honor an agreement allegedly made by the Bank in November 2014 in connection with the issuance of a one-year term loan (“Term Loan”) in the amount of $625,000 being made to Island View Crossing and Francesco Gualtieri related to the aforementioned Island View Project. Lava asserts that the Bank agreed to refinance, prior to maturity, the Term Loan. Francesco and Renato Gualtieri guaranteed the Term Loan personally.

This case is also in its early stages and discovery has not commenced. The Bank believes it has meritorious defenses and intends to vigorously defend the case. However, no prediction can be made as to the outcome of the claim against the Bank.

Item 1A. Risk Factors

As of March 31, 2016, no material changes have occurred to the risk factors of the Company as reported in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) and (b) Not applicable

(c) The Company’s repurchases of equity shares for the second quarter of fiscal year 2016 were as follows:

57

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Purchased Under Plans or Programs (1)
January 1 - 31, 2016		240,134	$	14.97		240,134		384,403
February 1 - 29, 2016		123,492	$	15.28		123,492		260,911
March 1 - 31, 2016		49,389	$	15.29		49,389		211,522
		413,015	$	15.10		413,015

(1) On July 15, 2015, the Company announced that the Board of Directors had approved a second stock repurchase program authorizing the Company to repurchase up 850,000 shares of common stock,approximately 10% of the Company's then outstanding shares.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable

Item 6. Exhibits

Exhibit No.	Description
31.1	Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
32.0	Section 1350 Certifications
101.INS	XBRL Instance Document.

58

101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definitions Linkbase Document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	PRUDENTIAL BANCORP, INC. OF PENNSYLVANIA
Date:	May 10, 2016	By:	/s/ Dennis Pollack
			Dennis Pollack
			President and Chief Executive Officer
Date:	May 10, 2016	By:	/s/ Jack E. Rothkopf
			Jack E. Rothkopf
			Senior Vice President, Chief Financial Officer and Treasurer

59

EX-31.1

EXHIBIT 31.1

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER

I, Dennis Pollack, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Prudential Bancorp, Inc. (the "Registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting as defined by Exchange Act Rules 13a-15(f) and 15d – 15(f) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	May 10, 2016	/s/ Dennis Pollack
		Dennis Pollack
		President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

RULE 13a-14(a)/15d-14(a) CERTIFICATION OF THE CHIEF FINANCIAL OFFICER

I, Jack E. Rothkopf, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Prudential Bancorp, Inc. (the "Registrant");

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting as defined by Exchange Act Rules 13a-15(f) and 15d – 15 (f) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

5. The Registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the audit committee of Registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date:	May 10, 2016	/s/Jack E. Rothkopf
		Jack E. Rothkopf
		Senior Vice President, Chief Financial Officer and Treasurer

EX-32.0

EXHIBIT 32.0

SECTION 1350 CERTIFICATIONS

Each of the undersigned Chief Executive Officer and Chief Financial Officer of Prudential Bancorp, Inc. (the "Registrant") hereby certifies that the Registrant's Form 10-Q for the quarter ended March 31, 2016 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	May 10, 2016	/s/ Dennis Pollack
		Name: Dennis Pollack
		Title: President and Chief Executive Officer

Date:	May 10, 2016	/s/ Jack E. Rothkopf
		Name: Jack E. Rothkopf
		Title: Senior Vice President, Chief Financial Officer and Treasurer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act has been provided to Prudential Bancorp, Inc. and will be retained by and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2016	Apr. 30, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	PRUDENTIAL BANCORP, INC.
Entity Central Index Key	0001578776
Trading Symbol	pbip
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		8,060,799
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2

XML

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
ASSETS
Cash and amounts due from depository institutions	$ 2,030	$ 2,150
Interest-bearing deposits	5,300	9,122
Total cash and cash equivalents	7,330	11,272
Investment and mortgage-backed securities available for sale (amortized cost March 31, 2016, $142,048; September 30, 2015, $77,456)	143,235	77,483
Investment and mortgage-backed securities held to maturity (fair value March 31, 2016, $45,591; September 30, 2015, $66,877)	44,488	66,384
Loans receivable - net of allowance for loan losses (March 31, 2016, $3,038; September 30, 2015, $2,930)	322,182	312,633
Accrued interest receivable	1,774	1,665
Real estate owned		869
Federal Home Loan Bank stock - at cost	1,851	369
Office properties and equipment - net	1,495	1,492
Bank owned life insurance	12,890	12,722
Prepaid expenses and other assets	1,848	1,325
Deferred tax assets-net	451	975
TOTAL ASSETS	537,544	487,189
Deposits:
Noninterest-bearing	2,775	2,293
Interest-bearing	381,295	362,781
Total deposits	384,070	365,074
Advances from Federal Home Loan Bank	37,059
Accrued interest payable	543	1,291
Advances from borrowers for taxes and insurance	1,777	1,670
Accounts payable and accrued expenses	1,770	2,153
Total liabilities	$ 425,219	$ 370,188
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
Common stock, $.01 par value, 40,000,000 shares authorized; 9,544,809 issued and 8,060,799 outstanding at March 31, 2016 and 9,544,809 issued and 8,449,625 outstanding at September 30, 2015	$ 95	$ 95
Additional paid-in capital	95,213	95,286
Unearned Employee Stock Ownership Plan shares	(4,738)	(4,926)
Treasury stock, at cost: 1,484,010 shares at March 31, 2016 and 1,095,184 at September 30, 2015	(20,756)	(14,691)
Retained earnings	41,728	41,219
Accumulated other comprehensive income	783	18
Total stockholders' equity	112,325	117,001
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 537,544	$ 487,189

XML

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Statement Of Financial Position [Abstract]
Investment and mortgage-backed securities available for sale, amortized cost (in dollars)	$ 142,048	$ 77,456
Investment and mortgage-backed securities held to maturity, fair value (in dollars)	45,591	66,877
Allowance for loan losses on loans receivable (in dollars)	$ 3,038	$ 2,930
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	9,544,809	9,544,809
Common stock, shares outstanding	8,060,799	8,449,625
Treasury stock, shares	1,484,010	1,095,184

XML

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
INTEREST INCOME:
Interest on loans	$ 3,166	$ 3,287	$ 6,226	$ 6,544
Interest on mortgage-backed securities	683	450	1,195	866
Interest and dividends on investments	509	552	988	1,100
Interest on interest-bearing assets	8	15	13	34
Total interest income	4,366	4,304	8,422	8,544
INTEREST EXPENSE:
Interest on deposits	743	871	1,495	1,772
Interest on advances from Federal Home Loan Bank	106		154
Total interest expense	849	871	1,649	1,772
NET INTEREST INCOME	3,517	3,433	6,773	6,772
PROVISION FOR LOAN LOSSES	75	300	75	375
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	3,442	3,133	6,698	6,397
NON-INTEREST INCOME:
Fees and other service charges	110	95	229	196
Gain on sale of loans, net	1		2	138
Gain on the sale of office properties		1,793		1,793
Income from bank owned life insurance	84	87	168	177
Other	14	13	84	34
Total non-interest income	209	1,988	483	2,338
NON-INTEREST EXPENSE:
Salaries and employee benefits	1,670	2,091	3,387	3,840
Data processing	112	106	228	212
Professional services	241	344	520	620
Office occupancy	259	267	507	490
Director compensation	102	82	228	168
Deposit insurance	90	68	172	136
Real estate owned expense		4	2	29
Advertising	21	73	38	103
Other	301	476	610	839
Total non-interest expense	2,796	3,511	5,692	6,437
INCOME BEFORE INCOME TAXES	855	1,610	1,489	2,298
INCOME TAXES:
Current expense	80	113	397	325
Deferred expense (benefit)	227	(204)	131	(199)
Total income tax expense	307	(91)	528	126
NET INCOME	$ 548	$ 1,701	$ 961	$ 2,172
BASIC EARNINGS PER SHARE (in dollars per share)	$ 0.08	$ 0.20	$ 0.13	$ 0.25
DILUTED EARNINGS PER SHARE (in dollars per share)	0.07	0.18	0.12	0.22
DIVIDENDS PER SHARE (in dollars per share)	$ 0.03	$ 0.03	$ 0.06	$ 0.06

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Statement Of Other Comprehensive Income [Abstract]
Net income	$ 548	$ 1,701	$ 961	$ 2,172
Unrealized holding gains on available-for-sale securities	2,344	861	1,160	1,597
Tax effect	(797)	(293)	(395)	(543)
Total other comprehensive income	1,547	568	765	1,054
Comprehensive Income	$ 2,095	$ 2,269	$ 1,726	$ 3,226

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UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-In Capital	Unearned ESOP Shares	Treasury Stock	Retained Earnings	Accumulated Other Comprehensive (Loss) Income	Total
BALANCE at Sep. 30, 2014	$ 95	$ 94,397	$ (5,302)		$ 41,188	$ (953)	$ 129,425
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income					2,172		2,172
Other comprehensive income and loss						1,054	1,054
Dividends paid ($0.06 per share)					(519)		(519)
Excess tax benefit from stock compensation plans		48					48
Purchase of treasury stock (309,614 and 430,626 share for March 31, 2015 and March 31, 2016 respectively)				$ (3,790)			(3,790)
Stock option expense		99					99
Recognition and Retention Plan expense		69					69
ESOP shares committed to be released (17,756 and (17,758) per share for March 31, 2015 and March 31, 2016 respectively)		50	188				238
BALANCE at Mar. 31, 2015	95	94,663	(5,114)	(3,790)	42,841	101	128,796
BALANCE at Sep. 30, 2015	95	95,286	(4,926)	(14,691)	41,219	18	117,001
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income					961		961
Other comprehensive income and loss						765	765
Dividends paid ($0.06 per share)					(452)		(452)
Excess tax benefit from stock compensation plans		111					111
Purchase of treasury stock (309,614 and 430,626 share for March 31, 2015 and March 31, 2016 respectively)				(6,705)			(6,705)
Treasury stock used for Recognition and Retention Plan (41,800 shares issued)		(640)		640
Stock option expense		219					219
Recognition and Retention Plan expense		160					160
ESOP shares committed to be released (17,756 and (17,758) per share for March 31, 2015 and March 31, 2016 respectively)		77	188				265
BALANCE at Mar. 31, 2016	$ 95	$ 95,213	$ (4,738)	$ (20,756)	$ 41,728	$ 783	$ 112,325

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UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Statement Of Stockholders Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.06	$ 0.06
Purchase of treasury stock, shares	430,626	309,614
Treasury stock used for Recognition and Retention Plan, shares	41,800
ESOP shares committed to be released	17,758	17,756

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
OPERATING ACTIVITIES:
Net income	$ 961	$ 2,172
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation	158	155
Net amortization (accretion) of premiums/discounts	66	(129)
Provision for loan losses	75	375
Net amortization of deferred loan fees and costs	106	129
Share-based compensation expense for stock options and awards	379	168
Income from bank owned life insurance	(168)	(177)
Gain from sale of loans	(2)	(138)
Gain on sale of office properties		(1,793)
Gain on sale of other real estate owned	(58)
Originations of loans held for sale	(450)	(2,400)
Proceeds from sale of loans held for sale	452	2,538
Compensation expense of ESOP	265	238
Deferred income tax expense (benefit)	131	(199)
Changes in assets and liabilities which used cash:
Accrued interest receivable	(109)	(31)
Prepaid expenses and other assets	(497)	712
Accrued interest payable	(748)	(979)
Accounts payable and accrued expenses	(383)	(229)
Net cash provided by operating activities	178	412
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale	(46,828)
Purchase of corporate bonds available for sale	(19,421)	(13,751)
Loans originated or acquired	(29,146)	(45,444)
Principal collected on loans	19,416	38,148
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity	21,913	7,265
Available-for-sale	1,546	2,195
Proceeds from redemption of FHLB stock		871
Purchase of FHLB stock	(1,482)
Proceeds from sale of real estate owned	927	360
Proceeds from sale of office properties		1,849
Purchases of equipment	(161)	(229)
Net cash used in investing activities	(53,236)	(8,736)
FINANCING ACTIVITIES:
Net decrease in demand deposits, NOW accounts, and savings accounts	(2,788)	(2,457)
Net increase (decrease) in certificates of deposit	21,784	(3,093)
Proceeds from FHLB advances	38,000
Decrease in advances from borrowers for taxes and insurance	107	385
Repayment of FHLB advances	(941)	(210)
Cash dividends paid	(452)	(519)
Purchase of treasury stock, net	(6,705)	(3,790)
Excess tax benefit related to stock compensation plans	111	48
Net cash provided by (used in) financing activities	49,116	(9,636)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(3,942)	(17,960)
CASH AND CASH EQUIVALENTS - Beginning of period	11,272	45,382
CASH AND CASH EQUIVALENTS - End of period	7,330	27,422
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid on deposits and advances from Federal Home Loan Bank	2,397	2,751
Income taxes paid	$ 350	$ 475

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

1. SIGNIFICANT ACCOUNTING POLICIES

Prudential Bancorp, Inc. (the “Company”) is a Pennsylvania corporation and the parent holding company for Prudential Saving Bank (the “Bank”). lt is a registered bank holding company.

The Bank is a community-oriented Pennsylvania-chartered savings bank headquartered in South Philadelphia. The banking office network currently consists of the headquarters and main office and five full-service branch offices. Five of the banking offices are located in Philadelphia (Philadelphia County), and one is in Drexel Hill, Delaware County, Pennsylvania. The Bank maintains ATMs at all six of the banking offices. The Bank also provides on-line and mobile banking services.

The Bank is subject to regulation by the Pennsylvania Department of Banking and Securities (the “Department”), as its chartering authority and primary regulator, and by the Federal Deposit Insurance Corporation (the “FDIC”), which insures the Bank’s deposits up to applicable limits. As a bank holding company, Prudential is subject to the regulation of the Board of Governors of the Federal Reserve System.

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of Prudential. and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

Use of Estimates in the Financial Statements—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The most significant estimates and assumptions in the Company’s consolidated financial statements are recorded in the allowance for loan losses, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Share-Based Compensation – The Company accounts for stock-based compensation issued to employees, and where appropriate, non-employees, at fair value. Under fair value provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the appropriate vesting period using the straight-line method. The amount of stock-based compensation recognized at any date must at least equal the portion of the grant date fair value of the award that is vested at that date and as a result it may be necessary to recognize the expense using a ratable method. Determining the fair value of stock-based awards at the date of grant requires judgment, including estimating the expected term of the stock options and the expected volatility of the Company’s stock. In addition, judgment is required in estimating the amount of stock-based awards that are expected to be forfeited. If actual results differ significantly from these estimates or different key assumptions were used, it could have a material effect on the Company’s consolidated financial statements.

Dividends with respect to non-vested share awards granted pursuant to the Company’s 2008 Recognition and Retention Plan (“Plan”) and held in the Trust (the “Trust”) are held for the benefit of the recipients and are paid out proportionately by the Trust to the recipients of stock awards granted pursuant to the Plan as soon as practicable after the stock awards are earned. A recipient of a share award granted under the 2014 Stock Incentive Plan is not entitled to receive any dividends declared on the common stock subject to the award until earned.

Treasury Stock – Stock held in treasury by the Company is accounted for using the cost method, which treats stock held in treasury as a reduction to total stockholders’ equity. During the six month period ended March 31, 2016, the Company repurchased 430,626 shares at an approximate total cost of $6.7 million, in addition the Company purchased 41,000 shares at an aggregate cost of $640,000 out of treasury for the benefit of the Company’s 2014 Stock Incentive Plan.

FHLB Stock – FHLB stock is classified as a restricted equity security because ownership is restricted and there is not an established market for its resale.  FHLB stock is carried at cost and is evaluated for impairment when certain conditions warrant further consideration. Management concluded that the FHLB stock was not impaired at March 31, 2016.

Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. The amendments in this Update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this Update should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this Update became effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted. This ASU did not have a significant impact on the Company’s financial statements.

In January 2014, the FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The amendments in this Update clarify that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to requirements of the applicable jurisdiction. The amendments in this Update were effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this Update using either a modified retrospective transition method or a prospective transition method. This ASU did not have a significant impact on the Company’s financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments when the Terms of an Award Provide that a Performance Target Could Be Achieved After the Requisite Service Period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies how current U.S. GAAP should be interpreted in subjectively evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Public business entities are required to implement the new requirements in fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting. The amendments in this Update apply to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity (either public or nonpublic) upon the occurrence of an event in which an acquirer (an individual or an entity) obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity's most recent change-in-control event. The amendments in this Update were effective on November 18, 2014. After the effective date, an acquired entity was permitted to make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. This ASU did not have a significant impact on the Company’s financial statements.

In January 2015, the FASB issued ASU 2015-01, Income Statement –Extraordinary and Unusual Items, as part of its initiative to reduce complexity in accounting standards. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). The amendments in this Update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) eliminate the presumption that a general partner should consolidate a limited partnership; (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), as part of its initiative to reduce complexity in accounting standards. This guidance will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the FASB decided that the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-06, Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions. Topic 260, Earnings Per Share, contains guidance that addresses master limited partnerships that originated from Emerging Issues Task Force (“EITF”) Issue No. 07-4, Application of the Two-Class Method Under FASB Statement No. 128 to Master Limited Partnerships. Under Topic 260, master limited partnerships apply the two-class method of calculating earnings per unit because the general partner, limited partners, and incentive distribution rights holders each participate differently in the distribution of available cash in accordance with the contractual rights contained in the partnership agreement. The amendments in this Update specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are also required. The amendments in this Update are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). The Update applies to reporting entities that elect to measure the fair value of an investment using the net asset value per share (or its equivalent) practical expedient. Under the amendments in this Update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is not applied will continue to be included in the fair value hierarchy. A reporting entity should continue to disclose information on investments for which fair value is measured at net asset value (or its equivalent) as a practical expedient to help users understand the nature and risks of the investments and whether the investments, if sold, are probable of being sold at amounts different from net asset value. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity's financial statements. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-08, Business Combinations - Pushdown Accounting - Amendment to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. This ASU was issued to amend various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115 which deleted certain topics related to push down accounting in order to make the SEC’s interpretive guidance consistent with current accounting and audit guidance. This ASU did not have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosure About Short-Duration Contracts. The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Services – Insurance. The amendments require insurance entities to disclose for annual reporting periods certain information about the liability for unpaid claims and claim adjustment expenses. The amendments also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. Additionally, the amendments require insurance entities to disclose for annual and interim reporting periods a rollforward of the liability for unpaid claims and claim adjustment expenses, described in Topic 944. For health insurance claims, the amendments require the disclosure of the total of incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. The amendments in this Update represent changes to clarify the FASB Accounting Standards Codification (“Codification”), correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this ASU. This ASU is not expected to have a significant impact on the Company’s financial statements.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers (Topic 606). The amendments in this Update defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the effect of adopting this new accounting ASU.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). The amendments in this Update require that an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this Update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This ASU is not expected to have a significant impact on the Company’s financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet.  A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.  A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20). The standard provides that liabilities related to the sale of prepaid stored-value products within the scope of this Update are financial liabilities. The amendments in the Update provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606. The amendments in this Update are effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this Update apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a heading instrument under Topic 815. The standards in this Update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. An entity has an option to apply the amendments in this ASU on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. An entity performing the assessment under the amendments in this Update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For entities other than public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The Update affects all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this Update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration. The amendments in this update do not change the core principle of the guidance in Topic 606; they simply clarify the implementation guidance on principal versus agent considerations. The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update affect all entities that issue share-based payment awards to their employees. The standards in this Update provide simplification for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as with equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. In addition to those simplifications, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and/or results of operations.

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EARNINGS PER SHARE

6 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

EARNINGS PER SHARE

2. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, during the period. Diluted earnings per share is calculated by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, after consideration of the potential dilutive effect of common stock equivalents, based upon the treasury stock method using an average market price for the period.

The calculated basic and diluted earnings per share are as follows:

	Three Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	548	$	548	$	1,701	$	1,701
Weighted average shares outstanding		7,380,880		7,380,880		8,571,846		8,571,846
Effect of common stock equivalents		-		270,973		-		1,103,728
Adjusted weighted average shares used in earnings per share computation		7,380,880		7,651,853		8,571,846		9,675,574
Earnings per share - basic and diluted	$	0.08	$	0.07	$	0.20	$	0.18

	Six Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	961	$	961	$	2,172	$	2,172
Weighted average shares outstanding		7,498,933		7,498,933		8,712,938		8,712,938
Effect of common stock equivalents		-		246,791		-		1,163,172
Adjusted weighted average shares used in earnings per share computation		7,498,933		7,745,724		8,712,938		9,876,110
Earnings per share - basic and diluted	$	0.13	$	0.12	$	0.25	$	0.22

All exercisable stock options outstanding as of March 31, 2016 and 2015 had exercise prices below the then current per share market price for the Company’s common stock and were considered dilutive for the earnings per share calculation.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The following table presents the changes in accumulated other comprehensive (loss) income by component, net of tax:

	Three Months Ended March 31,
	2016			2015
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities (a)			securities (a)
Beginning Balance	$	(764	)	$	(467	)
Other comprehensive income gain before reclassification		1,547			568
Total other comprehensive income		1,547			568
Ending Balance	$	783		$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

	Six Months Ended March 31,
	2016		2015
	(Dollars in Thousands)
	Unrealized gains (losses)		Unrealized gains (losses)
	on available for sale		on available for sale
	securities (a)		securities (a)
Beginning Balance	$	18	$	(953	)
Other comprehensive income gain before reclassification		765		1,054
Total other comprehensive income		765		1,054
Ending Balance	$	783	$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

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INVESTMENT AND MORTGAGE-BACKED SECURITIES

6 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

INVESTMENT AND MORTGAGE-BACKED SECURITIES

4. INVESTMENT AND MORTGAGE-BACKED SECURITIES

The amortized cost and fair value of investment and mortgage-backed securities, with gross unrealized gains and losses, are as follows: 

	March 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	11	$	(25	)	$	18,974
Mortgage-backed securities - U.S. government agencies		103,653		1,060		(132	)		104,581
Corporate bonds		19,401		243		-			19,644
Total debt securities available for sale		142,042		1,314		(157	)		143,199
FHLMC preferred stock		6		30		-			36
Total securities available for sale	$	142,048	$	1,344	$	(157	)	$	143,235
Securities Held to Maturity:
U.S. government and agency obligations	$	34,102	$	423	$	(135	)	$	34,390
Mortgage-backed securities - U.S. government agencies		10,386		815		-			11,201
Total securities held to maturity	$	44,488	$	1,238	$	(135	)	$	45,591

	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	-	$	(276	)	$	18,712
Mortgage-backed securities - U.S. government agencies		58,462		475		(225	)		58,712
Total debt securities available for sale		77,450		475		(501	)		77,424
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	77,456	$	528	$	(501	)	$	77,483
Securities Held to Maturity:
U.S. government and agency obligations	$	54,929	$	462	$	(849	)	$	54,542
Mortgage-backed securities - U.S. government agencies		11,455		880		-			12,335
Total securities held to maturity	$	66,384	$	1,342	$	(849	)	$	66,877

The following table shows the gross unrealized losses and related fair values of the Company’s investment securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at March 31, 2016:

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(10	)	$	2,990	$	(15	)	$	4,984	$	(25	)	$	7,974
Mortgage-backed securities - U.S. government agencies		(41	)		10,246		(91	)		11,462		(132	)		21,708
Total securities available for sale		(51	)		13,236		(106	)		16,446		(157	)		29,682
Securities Held to Maturity:
U.S. government and agency obligations		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total securities held to maturity		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total	$	(58	)	$	19,223	$	(234	)	$	30,292	$	(292	)	$	49,515

The following table shows the gross unrealized losses and related fair values of the Company’s investment securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at September 30, 2015:

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(85	)	$	4,910	$	(191	)	$	13,802	$	(276	)	$	18,712
Mortgage-backed securities - agency		(138	)		22,173		(87	)		9,206		(225	)		31,379
Total securities available for sale		(223	)		27,083		(278	)		23,008		(501	)		50,091
Securities Held to Maturity:
U.S. government and agency obligations		-			-		(849	)		42,603		(849	)		42,603
Total securities held to maturity		-			-		(849	)		42,603		(849	)		42,603
Total	$	(223	)	$	27,083	$	(1,127	)	$	65,611	$	(1,350	)	$	92,694

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least once each quarter, and more frequently when economic or market concerns warrant such evaluation. The evaluation is based upon factors such as the creditworthiness of the issuers/guarantors, the underlying collateral, if applicable, and the continuing performance of the securities.  Management also evaluates other facts and circumstances that may be indicative of an OTTI condition. This includes, but is not limited to, an evaluation of the type of security, the length of time and extent to which the fair value of the security has been less than cost, and the near-term prospects of the issuer.

The Company assesses whether a credit loss exists with respect to a security by considering whether (1) the Company has the intent to sell the security, (2) it is more likely than not that it will be required to sell the security before recovery has occurred, or (3) it does not expect to recover the entire amortized cost basis of the security. The Company bifurcates the OTTI impact on impaired securities where impairment in value was deemed to be other than temporary between the component representing credit loss and the component representing loss related to other factors. The portion of the fair value decline attributable to credit loss must be recognized through a charge to earnings. The credit component is determined by comparing the present value of the cash flows expected to be collected, discounted at the rate in effect before recognizing any OTTI, with the amortized cost basis of the debt security.  The Company uses the cash flows expected to be realized from the security, which includes assumptions about interest rates, timing and severity of defaults, estimates of potential recoveries, the cash flow distribution from the security and other factors, then applies a discount rate equal to the effective yield of the security.  The difference between the present value of the expected cash flows and the amortized book value is considered a credit loss.  The fair value of the security is determined using the same expected cash flows; the discount rate is a rate the Company determines from open market and other sources as appropriate for the particular security.  The difference between the fair value and the security’s remaining amortized cost is recognized in other comprehensive income (loss).  

During the three and six months ended March 31, 2016 and 2015, the Company did not record any credit losses on investment securities through either earnings.

U.S. Government Agency Obligations - The Company’s investments reflected in the tables above in U.S. Government agency obligations consist of debt of the FHLB and Federal Farm Credit System (“FFCS”). These securities are typically rated AAA by one of the internationally recognized credit rating services. At March 31, 2016, U.S. Government and agency obligations in a gross unrealized loss for less than 12 months consisted of three securities. There were nine securities in a gross unrealized loss for more than 12 months at such date. The unrealized losses on these debt securities relate principally to the changes in market interest rates and are not a result of a projected shortfall of cash flows. The Company anticipates it will recover the entire amortized cost basis of the securities. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2016.

U.S. Agency Issued Mortgage-Backed Securities - At March 31, 2016, there were seven securities in a gross unrealized loss for less than 12 months while there were seven securities in a gross unrealized loss for more than 12 months at such date. These securities represent asset-backed issues that are issued or guaranteed by a U.S. Government sponsored agency or carry the full faith and credit of the United States through a government agency and are currently rated AAA by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2016.

Corporate Debt Securities –The Company invested in investment grade corporate debt bonds, issued by large public Companies. At March 31, 2016, there were no securities in an unrealized loss position.

The amortized cost and fair value of debt securities, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The maturity table below excludes mortgage-backed securities because the contractual maturities of such securities are not indicative of actual maturities due to significant prepayments.

	March 31, 2016
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due within one year	$	-	$	-	$	-	$	-
Due after one through five years		-		-		-		-
Due after five through ten years		1,999		2,235		19,401		19,644
Due after ten years		32,103		32,155		18,988		18,974
Total	$	34,102	$	34,390	$	38,389	$	38,618

During both three and six month periods ended March 31, 2016 and 2015, no securities were sold.

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LOANS RECEIVABLE

6 Months Ended

Mar. 31, 2016

Receivables [Abstract]

LOANS RECEIVABLE

5. LOANS RECEIVABLE

Loans receivable consist of the following:

	March 31,			September 30,
	2016			2015
	(Dollars in Thousands)
One-to-four family residential	$	248,720		$	259,163
Multi-family residential		4,617			6,249
Commercial real estate		45,801			25,799
Construction and land development		36,338			38,953
Consumer		649			392
Total loans		336,125			330,556
Undisbursed portion of loans-in-process		(12,838	)		(17,097	)
Deferred loan costs		1,933			2,104
Allowance for loan losses		(3,038	)		(2,930	)
Net loans	$	322,182		$	312,633

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at March 31, 2016:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,511		43		428		773		7		276		3,038
Total ending allowance balance	$	1,511	$	43	$	428	$	773	$	7	$	276	$	3,038
Loans:
Individually evaluated for impairment	$	5,435	$	343	$	3,694	$	9,503	$	-			$	18,975
Collectively evaluated for impairment		243,285		4,274		42,107		26,835		649				317,150
Total loans	$	248,720	$	4,617	$	45,801	$	36,338	$	649	$	-	$	336,125

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at September 30, 2015:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial business		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,635		66		231		724		-		5		269		2,930
Total loans	$	1,635	$	66	$	231	$	724	$	-	$	5	$	269	$	2,930
Loans:
Individually evaluated for impairment	$	4,206	$	-	$	3,768	$	8,796	$	-	$	-	$	-	$	16,770
Collectively evaluated for impairment		254,957		6,249		22,031		30,157		-		392		-		313,786
Total loans	$	259,163	$	6,249	$	25,799	$	38,953	$	-	$	392	$	-	$	330,556

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction loans, commercial real estate and commercial business loans and all loans 90 plus days delinquent as to principal and/or interest. Loans are considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect in full the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.

Once the determination is made that a loan is impaired, the determination of whether a specific allocation of the allowance is necessary is generally measured by comparing the recorded investment in the loan to the fair value of the loan using one of the following three methods: (a) the present value of the expected future cash flows discounted at the loan’s effective interest rate; (b) the loan’s observable market price; or (c) the fair value of the collateral less selling costs. Management primarily utilizes the fair value of collateral method as a practically expedient alternative. On collateral method evaluations, any portion of the loan deemed uncollectible is charged-off against the loan loss allowance.

The following table presents impaired loans by class as of March 31, 2016, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	5,435	$	5,435	$	5,780
Multi-family residential		-		-		343		343		343
Commercial real estate		-		-		3,694		3,694		3,694
Construction and land development		-		-		9,503		9,503		9,503
Total Loans	$	-	$	-	$	18,975	$	18,975	$	19,320

The following table presents impaired loans by class as of September 30, 2015, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,206	$	4,206	$	4,550
Commercial real estate		-		-		3,768		3,768		3,768
Construction and land development		-		-		8,796		8,796		8,796
Total Loans	$	-	$	-	$	16,770	$	16,770	$	17,114

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods indicated:

	Three Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,069	$	20	$	29
Multi-family residential		345		-		-
Commercial real estate		3,703		27		-
Construction and land development		9,410		126		-
Total Loans	$	18,527	$	173	$	29

	Six Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,781	$	43	$	59
Multi-family residential		348		-		-
Commercial real estate		3,725		42		12
Construction and land development		9,206		252		64
Total Loans	$	18,060	$	337	$	135

	Three Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,068	$	124	$	42
Multi-family residential		361		6		-
Commercial real estate		3,758		51		24
Construction and land development		7,743		106		64
Total Loans	$	21,930	$	287	$	130

	Six Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,179	$	263	$	77
Multi-family residential		363		13		-
Commercial real estate		3,764		102		35
Construction and land development		7,628		210		64
Total Loans	$	21,934	$	588	$	176

Federal regulations and our policy require that the Company utilize an internal asset classification system as a means of reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, consistent with Federal banking regulations, as a part of its credit monitoring system. Management currently classifies problem and potential problem assets as “special mention”, “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the insured institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “special mention.”

The following table presents the classes of the loan portfolio in which a formal risk weighting system is utilized summarized by the aggregate “Pass” and the criticized category of “special mention”, and the classified categories of “substandard”, “doubtful” and “loss” within the Company’s risk rating system as applied to the loan portfolio. The Company had no loans classified as “doubtful” or “loss” at either of the dates presented.

	March 31, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	2,355	$	1,705	$	1,375	$	5,435
Multi-family residential		4,274		-		343		4,617
Commercial real estate		42,088		956		2,757		45,801
Construction and land development		26,834		-		9,504		36,338
Total Loans	$	75,551	$	2,661	$	13,979	$	92,191

	September 30, 2015
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	1,348	$	2,107	$	751	$	4,206
Multi-family residential		5,898		351		-		6,249
Commercial real estate		22,005		965		2,829		25,799
Construction and land development		30,157		-		8,796		38,953
Total Loans	$	59,408	$	3,423	$	12,376	$	75,207

The Company evaluates the classification of one-to-four family residential and consumer loans primarily on a pooled basis. If the Company becomes aware that adverse or distressed conditions exist that may affect a particular single-family residential loan, the loan is downgraded following the above definitions of special mention, substandard, doubtful and loss.

The following table represents loans in which a formal risk rating system is not utilized, but loans are segregated between performing and non-performing based primarily on delinquency status. Non-performing loans that would be included in the table are those loans greater than 90 days past due that do not have a designated risk rating.

	March 31, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	243,285	$	-	$	243,285
Consumer		649		-		649
Total Loans	$	243,934	$	-	$	243,934

	September 30, 2015
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	254,957	$	-	$	254,957
Consumer		392		-		392
Total Loans	$	255,349	$	-	$	255,349

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is due or overdue, as the case may be. The following table presents the loan categories of the loan portfolio summarized by the aging categories of performing and delinquent loans and nonaccrual loans:

	March 31, 2016
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	243,804	$	2,266	$	2,650	$	-	$	2,266	$	248,720	$	4,145
Multi-family residential		4,617		-		-		-		-		4,617		-
Commercial real estate		43,994		1,625		182		-		272		45,801		1,535
Construction and land development		29,374		6,964		-		-		-		36,338		9,503
Consumer		540		109		-		-		109		649		-
Total Loans	$	322,329	$	10,964	$	2,832	$	-	$	2,647	$	336,125	$	15,183

	September 30, 2015
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	255,669	$	1,462	$	2,032	$	-	$	1,462	$	259,163	$	3,547
Multi-family residential		6,249		-		-		-		-		6,249		-
Commercial real estate		25,114		504		181		-		504		25,799		1,589
Construction and land development		38,953		-		-		-		-		38,953		8,796
Consumer		392		-		-		-		-		392		-
Total Loans	$	326,377	$	1,966	$	2,213	$	-	$	1,966	$	330,556	$	13,932

The allowance for loan losses is established through a provision for loan losses charged to expense. The Company maintains the allowance at a level believed to cover all known and inherent losses in the portfolio that are both probable and reasonable to estimate at each reporting date. Management reviews the allowance for loan losses no less than quarterly in order to identify these inherent losses and to assess the overall collection probability for the loan portfolio in view of these inherent losses. For each primary type of loan, a loss factor is established reflecting an estimate of the known and inherent losses in such loan type contained in the portfolio using both a quantitative analysis as well as consideration of qualitative factors. The evaluation process includes, among other things, an analysis of delinquency trends, non-performing loan trends, the level of charge-offs and recoveries, prior loss experience, total loans outstanding, the volume of loan originations, the type, size and geographic concentration of the Company’s loans, the value of collateral securing the loans, the borrowers’ ability to repay and repayment performance, the number of loans requiring heightened management oversight, local economic conditions and industry experience.

Commercial real estate loans entail significant additional credit risks compared to owner-occupied one-to-four family residential mortgage loans, as they generally involve large loan balances concentrated with single borrowers or groups of related borrowers. In addition, the payment experience on loans secured by income-producing properties typically depends on the successful operation of the related real estate project and/or business operation of the borrower who is, in some cases, also the primary occupant, and thus may be subject to a greater extent to the effects of adverse conditions in the real estate market and in the economy in general. Commercial business loans typically involve a higher risk of default than residential loans of like duration since their repayment is generally dependent on the successful operation of the borrower’s business and the sufficiency of collateral, if any. Land acquisition, development and construction lending exposes the Company to greater credit risk than permanent mortgage financing. The repayment of land acquisition, development and construction loans depends upon the sale of the property to third parties or the availability of permanent financing upon completion of all improvements. These events may adversely affect both the borrowers as well as the value of the collateral property. Such lending is additionally subject to the risk that if the estimate of construction cost proves to be inaccurate, the Company potentially will be compelled to advance additional funds. In addition, if the estimate of value proves to be inaccurate, the Company may be confronted with a project, when completed, having less value than the loan amount. If the Company is forced to foreclose on a project prior to completion, there is no assurance that the Company would be able to recover the entire unpaid portion of the loan.

The following table summarizes the primary segments of the allowance for loan losses. Activity in the allowance is presented for the three month periods ended March 31, 2016 and 2015:

	Three Months Ended March 31, 2016
	One- to four-family residential		Multi- family residential			Commercial real estate		Construction and land development			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at December 31, 2015	$	1,471	$	58		$	359	$	757		$	8		$	266	$	2,919
Charge-offs		-		-			-		-			-			-		-
Recoveries		-		-			-		44			-			-		44
Provision		40		(15	)		69		(28	)		(1	)		10		75
ALLL balance at March 31, 2016	$	1,511	$	43		$	428	$	773		$	7		$	276	$	3,038

	Six Months Ended March 31, 2016
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2015	$	1,635		$	66		$	231	$	724	$	5	$	269	$	2,930
Charge-offs		(11	)		-			-		-		-		-		(11	)
Recoveries		-			-			-		44		-		-		44
Provision		(113	)		(23	)		197		5		2		7		75
ALLL balance at March 31, 2016	$	1,511		$	43		$	428	$	773	$	7	$	276	$	3,038

	Three Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential		Commercial real estate			Construction and land development		Commercial  business			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2014	$	1,492		$	51	$	216		$	493	$	5		$	4	$	239		$	2,500
Charge-offs		(212	)		-		-			-		-			-		-			(212	)
Recoveries		-			-		-			-		-			-		-			-
Provision		265			-		(9	)		52		(5	)		-		(3	)		300
ALLL balance at March 31, 2015	$	1,545		$	51	$	207		$	545	$	-		$	4	$	236		$	2,588

	Six Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Commercial  business			Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2014	$	1,663		$	67		$	122	$	323	$	15		$	4	$	231	$	2,425
Charge-offs		(212	)		-			-		-		-			-		-		(212	)
Recoveries		-			-			-		-		-			-		-		-
Provision		94			(16	)		85		222		(15	)		-		5		375
ALLL balance at March 31, 2015	$	1,545		$	51		$	207	$	545	$	-		$	4	$	236	$	2,588

The Company recorded a provision for loan losses in the amount of $75,000 for both the three and six months ended March 31, 2016, compared to the $300,000 provision for the three months and $375,000 for the six months periods ended March 31, 2015.

At March 31, 2016, the Company had ten loans classified as TDRs aggregating $7.9 million, consisting of two single-family residential real estate loans which amounted to $1.6 million, one construction and land development loan totaling $3.4 million and seven commercial real estate loans which amounted to $2.9 million. Of these loans, one single-family residential real estate loan totaling $1.4 million was determined to be non-performing until management has made the decision to designate this credits as performing. Typically management will wait until a minimum of six consecutive contractual payments have been made prior to changing the designation. All TDRs, with the exception of one commercial real estate loan totaling $756,000, were classified as “substandard” as of March 31, 2016. During the three months ended March 31, 2016, two loans classified as TDR, consisting of one construction loan in the amount of $3.4 million and one commercial real estate loan in the amount of $731,000 missed payments and were considered 60-89 days past due. These two loans are a part of the Company’s largest lending relationship.

The Company did not restructure any debt during the three and six month periods ended March 31, 2016 and 2015.

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DEPOSITS

6 Months Ended

Mar. 31, 2016

Deposits [Abstract]

DEPOSITS

6. DEPOSITS

Deposits consist of the following major classifications:

	March 31,					September 30,
	2016					2015
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	57,470		15.0	%	$	60,736		16.6	%
Interest-bearing checking accounts		36,001		9.4			35,649		9.8
Non-interest bearing checking accounts		2,775		0.7			2,293		0.6
Passbook, club and statement savings		69,999		18.2			70,355		19.3
Certificates maturing in six months or less		69,843		18.2			49,857		13.7
Certificates maturing in more than six months		147,982		38.5			146,184		40.0
Total	$	384,070		100.0	%	$	365,074		100.0	%

Certificates of $250,000 and over totaled $17.2 million as of March 31, 2016 and $32.7 million as of September 30, 2015.

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ADVANCES

6 Months Ended

Mar. 31, 2016

Advances from Federal Home Loan Banks [Abstract]

ADVANCES

7. ADVANCES

Pursuant to collateral agreement with the FHLB of Pittsburgh advances are secured by qualifying first mortgage loans.

Type	Maturity Date	Amount		Coupon			Call Date
		(Dollars in Thousands)
Fixed Rate -Advance	1-Apr-16	$	3,000		0.60	%	Not Applicable
Fixed Rate -Advance	4-Apr-16		3,000		0.60	%	Not Applicable
Fixed Rate -Advance	17-Nov-17		10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		3,505		1.16	%	Not Applicable
Fixed Rate -Advance	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate -Advance	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate -Advance	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate -Amortizing	18-Nov-19		5,054		1.53	%	Not Applicable
		$	37,059		1.21	%

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INCOME TAXES

6 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

8. INCOME TAXES

Items that gave rise to significant portions of deferred income taxes are as follows:

	March 31,			September 30,
	2016			2015
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,210		$	1,185
Nonaccrual interest		96			86
Accrued vacation		37			119
Capital loss carryforward		506			534
Split dollar life insurance		19			19
Post-retirement benefits		104			126
Employee benefit plans		579			530
Total deferred tax assets		2,551			2,599
Valuation allowance		(506	)		(534	)
Total deferred tax assets, net of valuation allowance		2,045			2,065
Deferred tax liabilities:
Property		533			365
Unrealized gains on available for sale securities		404			10
Deferred loan fees		657			715
Total deferred tax liabilities		1,594			1,090
Net deferred tax assets	$	451		$	975

The Company establishes a valuation allowance for deferred tax assets when management believes that the use of the deferred tax assets is not likely to be realized through a carry back to taxable income in prior years or future reversals of existing taxable temporary differences, and/or to a lesser extent, future taxable income. The tax deduction generated by the redemption of the shares of a mutual fund held by the Bank and the subsequent impairment charge on the assets acquired through the redemption in kind are considered capital losses and can only be utilized to the extent of capital gains over a five year period, resulting in the establishment of a valuation allowance for the carryforward period. The valuation allowance totaled $506,000 at March 31, 2016, and $534,000 at September 30, 2015.

There is currently no liability for uncertain tax positions and no known unrecognized tax benefits. The Company recognizes, when applicable, interest and penalties related to unrecognized tax benefits in the provision for income taxes in the Consolidated Statements of Operations as a component of income tax expense. The Company’s federal and state income tax returns for taxable years through September 30, 2012 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

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STOCK COMPENSATION PLANS

6 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

STOCK COMPENSATION PLANS

9. STOCK COMPENSATION PLANS

The Company maintains an employee stock ownership plan (“ESOP”) for substantially all of its full-time employees. The ESOP purchased 427,057 shares (on a converted basis) of the Company’s common stock for an aggregate cost of approximately $4.5 million in fiscal 2005. The ESOP purchased an additional 255,564 shares during December 2013 and an additional 30,100 shares at the beginning January 2014, of the Company’s common stock for an aggregate cost of approximately $3.1 million. The shares were purchased with the proceeds of loans from the Company. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants as the loans are repaid. Shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. As of March 31, 2016, the ESOP held 697,271 shares and the Company had allocated a total of 286,635 shares from the suspense account to participants. For the six months ended March 31, 2016 and 2015, the Company recognized $265,000 and $238,000, respectively, in compensation expense related to the ESOP.

The Company maintains the 2008 Recognition and Retention Plan (“2008 RRP”) which is administered by a committee of the Board of Directors of the Company. The RRP provides for the grant of shares of common stock of the Company to officers, employees and directors of the Company. In order to fund the grant of shares under the RRP, the RRP Trust purchased 213,528 shares (on a converted basis) of the Company’s common stock in the open market for approximately $2.5 million, at an average purchase price per share of $11.49 as part of the 2008 RRP. The Company made sufficient contributions to the RRP Trust to fund these purchases. As of March 31, 2016, all the shares, with exception of 6,262 shares that had been forfeited, had been awarded as part of the 2008 RRP. Shares subject to awards under the 2008 RRP generally vest at the rate of 20% per year over five years. During February 2015, shareholders approved the 2014 Stock Incentive Plan (the “2014 SIP”). As part of the 2014 SIP, a maximum of 285,655 shares can be awarded as restricted stock awards or units, of which 235,500 shares were awarded during February 2015 of which 30,500 shares had been forfeited as of March 31, 2016.

Compensation expense related to the shares subject to restricted stock awards granted is recognized ratably over the five-year vesting period in an amount which totals the grant date fair value multiplied by the number of shares subject to the grant. During the three and six months ended March 31, 2016, an aggregate of $115,000 and $243,000, respectively, was recognized in compensation expense for the 2008 RRP and the grants pursuant to the 2014 SIP. Income tax benefits of $39,000 and $83,000 were recognized for the three and six months ended March 31, 2016. During the three and six months ended March 31, 2015, $84,000 and $105,000 was recognized in compensation expense for the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $29,000 and $36,000, respectively, was recognized for the three and six months ended March 31, 2015. At March 31, 2016, approximately $2.5 million in additional compensation expense for the shares awarded which remained outstanding related to the 2008 RRP and for the 2014 SIP remained unrecognized. At March 31, 2015, approximately $3.0 million in additional compensation expense for the shares awarded related to the 2018 RRP and the 2014 SIP remained unrecognized.

A summary of the Company’s non-vested stock award activity for the six months ended March 31, 2016 and 2015 is presented in the following tables:

	Six Months Ended March 31, 2016
	Number of Shares (1)			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Issued		-			-
Forfeited		(36,762	)		11.55
Vested		(49,511	)		11.47
Nonvested stock awards at the March 31, 2016		155,155		$	11.87

	Six Months Ended March 31, 2015
	Number of Shares			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2014		38,055		$	8.07
Issued		235,500			12.23
Forfeited		-			-
Vested		(9,578	)		8.07
Nonvested stock awards at the March 31, 2015		263,977		$	12.07

The Company maintains the 2008 Stock Option Plan (the “2008 Option Plan”) which authorizes the grant of stock options to officers, employees and directors of the Company to acquire shares of common stock with an exercise price at least equal to the fair market value of the common stock on the grant date. Options generally become vested and exercisable at the rate of 20% per year over five years and are generally exercisable for a period of ten years after the grant date. A total of 533,808 shares (on a converted basis) of common stock were approved for future issuance pursuant to the 2008 Stock Option Plan. As of March 31, 2016, all of the options had been awarded under the 2008 Option Plan. As of March 31, 2016, 442,155 options (on a converted basis) were vested under the 2008 Option Plan. The 2014 SIP reserved up to 714,145 shares for issuance pursuant to options. Options to purchase 587,112 shares were awarded during February 2015, 608,737 shares pursuant to the 2014 SIP and the remainder pursuant to the 2008 Option Plan. As of March 31, 2016, the 2008 Option Plan had 7,932 forfeited shares and the 2014 SIP had 78,000 forfeited shares.

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP as of March 31, 2016 and 2015 are presented below:

	Six Months Ended March 31, 2016
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(130,535	)		11.49
Forfeited		(93,939	)		11.55
Outstanding at March 31, 2016		849,956		$	12.03
Exercisable at March 31, 2016		347,037		$	11.38

	Six Months Ended March 31, 2015
	Number of Shares		Weighted Average Exercise Price
Outstanding at October 1, 2014		530,084	$	10.86
Granted		608,737		12.23
Exercised		-		-
Forfeited		-		-
Outstanding at March 31, 2015		1,138,821	$	11.59
Exercisable at March 31, 2015		417,767	$	11.37

The weighted average remaining contractual term was approximately 6.5 years for options outstanding as of March 31, 2016.

The estimated fair value of options granted during fiscal 2009 was $2.98 per share, $2.92 for options granted during fiscal 2010, $3.34 for options granted during fiscal 2013, $4.67 for the options granted during fiscal 2014 and $4.58 for options granted during fiscal 2015. The fair value for grants made in fiscal 2015 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $12.23, expected term of seven years, volatility rate of 38.16%, interest rate of 1.62% and a yield rate of 0.98%.

During the three and six months ended March 31, 2016, $112,000 and $248,000 was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. Ttax benefits of $13,000 and $29,000, respectively, were recognized for the three and six months ended March 31, 2016. During the three and six months ended March 31, 2015, $86,000 and $111,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. Tax benefits of $9,000 and $12,000, respectively, were recognized for the three and six months ended March 31, 2015.

At March 31, 2016, there was approximately $2.1 million in additional compensation expense to be recognized for awarded options which remained outstanding and unvested at such date. The weighted average period over which this expense will be recognized is approximately 3.9 years.

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COMMITMENTS AND CONTINGENT LIABILITIES

6 Months Ended

Mar. 31, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

10. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2016, the Company had $23.0 million in outstanding commitments to originate fixed and variable-rate loans with market interest rates ranging from 3.75% to 5.50%. At September 30, 2015, the Company had $2.5 million in outstanding commitments to originate fixed and variable-rate loans with market interest rates ranging from 4.25% to 5.25%. The aggregate undisbursed portion of loans-in-process amounted to $12.8 million at March 31, 2016 and $17.0 million at September 30, 2015.

The Company also had commitments under unused lines of credit of $3.4 million as of March 31, 2016 and $6.1 million as of September 30, 2015 and letters of credit outstanding of $2.9 million as of March 31, 2016 and $2.6 million as of September 30, 2015.

Among the Company’s contingent liabilities are exposures to limited recourse arrangements with respect to the Company’s sales of whole loans and participation interests. At March 31, 2016, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $49,000. This exposure is for the life of the related loans and payables, on our proportionate share, as actual losses are incurred.

The Company is involved in various legal proceedings occurring in the ordinary course of business. Management of the Company, based on discussions with litigation counsel, believes that such proceedings will not have a material adverse effect on the financial condition, operations or cash flows of the Company. However, there can be no assurance that any of the outstanding legal proceedings to which the Company is a party will not be decided adversely to the Company's interests and not have a material adverse effect on the financial condition and operations of the Company.

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FAIR VALUE MEASUREMENT

6 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

10. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2016 and September 30, 2015, respectively. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.

Generally accepted accounting principles used in the United States establish a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value.

The three broad levels of hierarchy are as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Those assets as of March 31, 2016 which are to be measured at fair value on a recurring basis are as follows:

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,974	$	-	$	18,974
Mortgage-backed securities - U.S. Government agencies		-		104,581		-		104,581
Corporate bonds		-		19,644				19,644
FHLMC preferred stock		36		-		-		36
Total	$	36	$	143,199	$	-	$	143,235

Those assets as of September 30, 2015 which are measured at fair value on a recurring basis are as follows:

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,712	$	-	$	18,712
Mortgage-backed securities - U.S. Government agencies		-		58,712		-		58,712
FHLMC preferred stock		59		-		-		59
Total	$	59	$	77,424	$	-	$	77,483

Certain assets are measured at fair value on a nonrecurring basis; that is, the instruments are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (for example, when there is evidence of impairment). The Company measures impaired loans and real estate owned at fair value on a non-recurring basis.

Impaired Loans

The Company considers loans to be impaired when it becomes more likely than not that the Company will be unable to collect all amounts due in accordance with the contractual terms of the loan agreements. Collateral dependent impaired loans are based on the fair value of the collateral which is based on appraisals and would be categorized as Level 2 measurement.  In some cases, adjustments are made to the appraised values for various factors including the age of the appraisal, age of the comparable included in the appraisal, and known changes in the market and in the collateral. These adjustments are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement. These loans are reviewed for impairment and written down to their net realizable value by charges against the allowance for loan losses. The collateral underlying these loans had a fair value in excess of $19.0 million, as of March 31, 2016.

Real Estate Owned

Once an asset is determined to be uncollectible, the underlying collateral is generally repossessed and reclassified to foreclosed real estate and repossessed assets. These repossessed assets are carried at the lower of cost or fair value of the collateral, based on independent appraisals, less cost to sell and would be categorized as Level 2 measurement. In some cases, adjustments are made to the appraised values for various factors including age of the appraisal, age of the comparable included in the appraisal, and known changes in the market and in the collateral. Thus the evaluations are based upon unobservable inputs, and therefore, the fair value measurement has been categorized as a Level 3 measurement.

Summary of Non-Recurring Fair Value Measurements

	At March 31, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,975	$	18,975
Total	$	-	$	-	$	18,975	$	18,975

	At September 30, 2015
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,770	$	16,770
Real estate owned		-		869		-		869
Total	$	-	$	869	$	16,770	$	17,639

The following table provides information describing the valuation processes used to determine nonrecurring fair value measurements categorized within Level 3 of the fair value hierarchy:

	At March 31, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,975	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2015
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,770	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount
Real estate owned	$	869	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs, which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

The fair value of financial instruments has been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

					Fair Value Measurements at
					March 31, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	7,330	$	7,330	$	7,330	$	-	$	-
Investment and mortgage-backed securities available for sale		143,235		143,235		36		143,199		-
Investment and mortgage-backed securities held to maturity		44,488		45,591		-		45,591		-
Loans receivable, net		322,182		322,200		-		-		322,200
Accrued interest receivable		1,774		1,774		1,774		-		-
Federal Home Loan Bank stock		1,851		1,851		1,851		-		-
Bank owned life insurance		12,890		12,890		12,890		-		-
Liabilities:
Checking accounts		38,776		38,776		38,776		-		-
Money market deposit accounts		57,470		57,470		57,470		-		-
Passbook, club and statement savings accounts		69,999		69,999		69,999		-		-
Certificates of deposit		217,825		220,340		-		-		220,340
Advances from Federal Home Loan Bank		37,059		37,096		-		-		37,096
Accrued interest payable		543		543		543		-		-
Advances from borrowers for taxes and insurance		1,777		1,777		1,777		-		-

					Fair Value Measurements at
					September 30, 2015
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	11,272	$	11,272	$	11,272	$	-	$	-
Investment and mortgage-backed securities available for sale		77,483		77,483		59		77,424		-
Investment and mortgage-backed securities held to maturity		66,384		66,877		-		66,877		-
Loans receivable, net		312,633		312,613		-		-		312,613
Accrued interest receivable		1,665		1,665		1,665		-		-
Federal Home Loan Bank stock		369		369		369		-		-
Bank owned life insurance		12,722		12,722		12,722		-		-
Liabilities:
Checking accounts		37,942		37,942		37,942		-		-
Money market deposit accounts		60,736		60,736		60,736		-		-
Passbook, club and statement savings accounts		70,355		70,355		70,355		-		-
Certificates of deposit		196,041		199,639		-		-		199,639
Accrued interest payable		1,291		1,291		1,291		-		-
Advances from borrowers for taxes and insurance		1,670		1,670		1,670		-		-

Cash and Cash Equivalents—For cash and cash equivalents, the carrying amount is a reasonable estimate of fair value.

Investments and Mortgage-Backed Securities—The fair value of investment securities and mortgage-backed securities is based on quoted market prices, dealer quotes, and prices obtained from independent pricing services.

Loans Receivable—The fair value of loans is estimated based on present value using the current market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The carrying value that fair value is compared to is net of the allowance for loan losses and other associated premiums and discounts. Due to the significant judgment involved in evaluating credit quality, loans are classified within Level 3 of the fair value hierarchy.

Accrued Interest Receivable – For accrued interest receivable, the carrying amount is a reasonable estimate of fair value.

Federal Home Loan Bank (FHLB) Stock—Although FHLB stock is an equity interest in an FHLB, it is carried at cost because it does not have a readily determinable fair value as its ownership is restricted and it lacks a market. The estimated fair value approximates the carrying amount.

Bank Owned Life Insurance—The fair value of bank owned life insurance is based on the cash surrender value obtained from an independent advisor that is derivable from observable market inputs.

Checking Accounts, Money Market Deposit Accounts, Passbook Accounts, Club Accounts, Statement Savings Accounts, and Certificates of Deposit—The fair value of passbook accounts, club accounts, statement savings accounts, checking accounts, and money market deposit accounts is the amount reported in the financial statements. The fair value of certificates of deposit is based on market rates currently offered for deposits of similar remaining maturity.

Advances from Federal Home Loan Bank—The fair value of advances from FHLB is the amount payable on demand at the reporting date.

Accrued Interest Payable – For accrued interest payable, the carrying amount is a reasonable estimate of fair value.

Advances from borrowers for taxes and insurance – For advances from borrowers for taxes and insurance, the carrying amount is a reasonable estimate of fair value.

Commitments to Extend Credit and Letters of Credit—The majority of the Bank’s commitments to extend credit and letters of credit carry current market interest rates if converted to loans. Because commitments to extend credit and letters of credit are generally unassignable by either the Bank or the borrower, they only have value to the Bank and the borrower. The estimated fair value approximates the recorded deferred fee amounts, which are not significant.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2016 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2016, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of Prudential. and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2015.

Use of Estimates in the Financial Statements

Use of Estimates in the Financial Statements—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. The most significant estimates and assumptions in the Company’s consolidated financial statements are recorded in the allowance for loan losses, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Share-Based Compensation

Share-Based Compensation – The Company accounts for stock-based compensation issued to employees, and where appropriate, non-employees, at fair value. Under fair value provisions, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the appropriate vesting period using the straight-line method. The amount of stock-based compensation recognized at any date must at least equal the portion of the grant date fair value of the award that is vested at that date and as a result it may be necessary to recognize the expense using a ratable method. Determining the fair value of stock-based awards at the date of grant requires judgment, including estimating the expected term of the stock options and the expected volatility of the Company’s stock. In addition, judgment is required in estimating the amount of stock-based awards that are expected to be forfeited. If actual results differ significantly from these estimates or different key assumptions were used, it could have a material effect on the Company’s consolidated financial statements.

Dividends with respect to non-vested share awards granted pursuant to the Company’s 2008 Recognition and Retention Plan (“Plan”) and held in the Trust (the “Trust”) are held for the benefit of the recipients and are paid out proportionately by the Trust to the recipients of stock awards granted pursuant to the Plan as soon as practicable after the stock awards are earned. A recipient of a share award granted under the 2014 Stock Incentive Plan is not entitled to receive any dividends declared on the common stock subject to the award until earned.

Treasury Stock

Treasury Stock – Stock held in treasury by the Company is accounted for using the cost method, which treats stock held in treasury as a reduction to total stockholders’ equity. During the six month period ended March 31, 2016, the Company repurchased 430,626 shares at an approximate total cost of $6.7 million, in addition the Company purchased 41,000 shares at an aggregate cost of $640,000 out of treasury for the benefit of the Company’s 2014 Stock Incentive Plan.

FHLB Stock

 FHLB Stock – FHLB stock is classified as a restricted equity security because ownership is restricted and there is not an established market for its resale.  FHLB stock is carried at cost and is evaluated for impairment when certain conditions warrant further consideration. Management concluded that the FHLB stock was not impaired at March 31, 2016.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2014-01, Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Qualified Affordable Housing Projects. The amendments in this Update permit reporting entities to make an accounting policy election to account for their investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the income statement as a component of income tax expense (benefit). The amendments in this Update should be applied retrospectively to all periods presented. A reporting entity that uses the effective yield method to account for its investments in qualified affordable housing projects before the date of adoption may continue to apply the effective yield method for those preexisting investments. The amendments in this Update became effective for public business entities for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2014. Early adoption is permitted. This ASU did not have a significant impact on the Company’s financial statements.

In January 2014, the FASB issued ASU 2014-04, Receivables – Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure. The amendments in this Update clarify that an in-substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to requirements of the applicable jurisdiction. The amendments in this Update were effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. An entity can elect to adopt the amendments in this Update using either a modified retrospective transition method or a prospective transition method. This ASU did not have a significant impact on the Company’s financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The Update’s core principle is that a company will recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, this update specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This Update is effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In June 2014, the FASB issued ASU 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments when the Terms of an Award Provide that a Performance Target Could Be Achieved After the Requisite Service Period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. The amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. Entities may apply the amendments in this Update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted, the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). This ASU clarifies how current U.S. GAAP should be interpreted in subjectively evaluating the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Public business entities are required to implement the new requirements in fiscal years and interim periods within those fiscal years beginning after December 15, 2015. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2014, the FASB issued ASU 2014-17, Business Combinations (Topic 805): Pushdown Accounting. The amendments in this Update apply to the separate financial statements of an acquired entity and its subsidiaries that are a business or nonprofit activity (either public or nonpublic) upon the occurrence of an event in which an acquirer (an individual or an entity) obtains control of the acquired entity. An acquired entity may elect the option to apply pushdown accounting in the reporting period in which the change-in-control event occurs. If pushdown accounting is not applied in the reporting period in which the change-in-control event occurs, an acquired entity will have the option to elect to apply pushdown accounting in a subsequent reporting period to the acquired entity's most recent change-in-control event. The amendments in this Update were effective on November 18, 2014. After the effective date, an acquired entity was permitted to make an election to apply the guidance to future change-in-control events or to its most recent change-in-control event. This ASU did not have a significant impact on the Company’s financial statements.

In January 2015, the FASB issued ASU 2015-01, Income Statement –Extraordinary and Unusual Items, as part of its initiative to reduce complexity in accounting standards. This Update eliminates from GAAP the concept of extraordinary items. The amendments in this Update are effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. A reporting entity may apply the amendments prospectively. A reporting entity also may apply the amendments retrospectively to all prior periods presented in the financial statements. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810). The amendments in this Update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically, the amendments (1) modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (“VIEs”) or voting interest entities; (2) eliminate the presumption that a general partner should consolidate a limited partnership; (3) affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and (4) provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds. The amendments in this Update are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and for interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest-Imputation of Interest (Subtopic 835-30), as part of its initiative to reduce complexity in accounting standards. To simplify presentation of debt issuance costs, the amendments in this Update require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this Update. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within fiscal years beginning after December 15, 2016. An entity should apply the new guidance on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-05, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), as part of its initiative to reduce complexity in accounting standards. This guidance will help entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement. The amendments in this Update provide guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. For public business entities, the FASB decided that the amendments will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. For all other entities, the amendments will be effective for annual periods beginning after December 15, 2015, and interim periods in annual periods beginning after December 15, 2016. Early adoption is permitted for all entities. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2015, the FASB issued ASU 2015-06, Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master Limited Partnership Dropdown Transactions. Topic 260, Earnings Per Share, contains guidance that addresses master limited partnerships that originated from Emerging Issues Task Force (“EITF”) Issue No. 07-4, Application of the Two-Class Method Under FASB Statement No. 128 to Master Limited Partnerships. Under Topic 260, master limited partnerships apply the two-class method of calculating earnings per unit because the general partner, limited partners, and incentive distribution rights holders each participate differently in the distribution of available cash in accordance with the contractual rights contained in the partnership agreement. The amendments in this Update specify that for purposes of calculating historical earnings per unit under the two-class method, the earnings (losses) of a transferred business before the date of a dropdown transaction should be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners (which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction occurs for purposes of computing earnings per unit under the two-class method are also required. The amendments in this Update are effective for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-07, Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or Its Equivalent). The Update applies to reporting entities that elect to measure the fair value of an investment using the net asset value per share (or its equivalent) practical expedient. Under the amendments in this Update, investments for which fair value is measured at net asset value per share (or its equivalent) using the practical expedient should not be categorized in the fair value hierarchy. Removing those investments from the fair value hierarchy not only eliminates the diversity in practice resulting from the way in which investments measured at net asset value per share (or its equivalent) with future redemption dates are classified, but also ensures that all investments categorized in the fair value hierarchy are classified using a consistent approach. Investments that calculate net asset value per share (or its equivalent), but for which the practical expedient is not applied will continue to be included in the fair value hierarchy. A reporting entity should continue to disclose information on investments for which fair value is measured at net asset value (or its equivalent) as a practical expedient to help users understand the nature and risks of the investments and whether the investments, if sold, are probable of being sold at amounts different from net asset value. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. A reporting entity should apply the amendments retrospectively to all periods presented. The retrospective approach requires that an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity's financial statements. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-08, Business Combinations - Pushdown Accounting - Amendment to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 115. This ASU was issued to amend various SEC paragraphs pursuant to the issuance of Staff Accounting Bulletin No. 115 which deleted certain topics related to push down accounting in order to make the SEC’s interpretive guidance consistent with current accounting and audit guidance. This ASU did not have a significant impact on the Company’s financial statements.

In May 2015, the FASB issued ASU 2015-09, Financial Services – Insurance (Topic 944): Disclosure About Short-Duration Contracts. The amendments apply to all insurance entities that issue short-duration contracts as defined in Topic 944, Financial Services – Insurance. The amendments require insurance entities to disclose for annual reporting periods certain information about the liability for unpaid claims and claim adjustment expenses. The amendments also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. Additionally, the amendments require insurance entities to disclose for annual and interim reporting periods a rollforward of the liability for unpaid claims and claim adjustment expenses, described in Topic 944. For health insurance claims, the amendments require the disclosure of the total of incurred-but-not-reported liabilities plus expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. For all other entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within annual periods beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In June 2015, the FASB issued ASU 2015-10, Technical Corrections and Improvements. The amendments in this Update represent changes to clarify the FASB Accounting Standards Codification (“Codification”), correct unintended application of guidance, or make minor improvements to the Codification that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Transition guidance varies based on the amendments in this Update. The amendments in this Update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this ASU. This ASU is not expected to have a significant impact on the Company’s financial statements.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contract with Customers (Topic 606). The amendments in this Update defer the effective date of ASU 2014-09 for all entities by one year. Public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. All other entities should apply the guidance in ASU 2014-09 to annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is evaluating the effect of adopting this new accounting ASU.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805). The amendments in this Update require that an acquirer recognizes adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this Update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2016, and interim periods within fiscal years beginning after December 15, 2017. This ASU is not expected to have a significant impact on the Company’s financial statements.

In November 2015, the FASB issued ASU 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The amendments in this Update apply to all entities that present a classified statement of financial position. For public business entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments in this Update are effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Earlier application is permitted for all entities as of the beginning of an interim or annual reporting period. The amendments in this Update may be applied either prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. This ASU is not expected to have a significant impact on the Company’s financial statements.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (g) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (h) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. For all other entities including not-for-profit entities and employee benefit plans within the scope of Topics 960 through 965 on plan accounting, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. All entities that are not public business entities may adopt the amendments in this Update earlier as of the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The standard requires lessees to recognize the assets and liabilities that arise from leases on the balance sheet.  A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.  A short-term lease is defined as one in which: (a) the lease term is 12 months or less, and (b) there is not an option to purchase the underlying asset that the lessee is reasonably certain to exercise. For short-term leases, lessees may elect to recognize lease payments over the lease term on a straight-line basis. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2018, and interim periods within those years. For all other entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2019, and for interim periods within fiscal years beginning after December 15, 2020. The amendments should be applied at the beginning of the earliest period presented using a modified retrospective approach with earlier application permitted as of the beginning of an interim or annual reporting period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-04, Liabilities – Extinguishments of Liabilities (Subtopic 405-20). The standard provides that liabilities related to the sale of prepaid stored-value products within the scope of this Update are financial liabilities. The amendments in the Update provide a narrow scope exception to the guidance in Subtopic 405-20 to require that breakage for those liabilities be accounted for consistent with the breakage guidance in Topic 606. The amendments in this Update are effective for public business entities, certain not-for-profit entities, and certain employee benefit plans for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Earlier application is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this Update apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a heading instrument under Topic 815. The standards in this Update clarify that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require designation of that hedging relationship provided that all other hedge accounting criteria continue to be met. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. An entity has an option to apply the amendments in this ASU on either a prospective basis or a modified retrospective basis. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815). The amendments apply to all entities that are issuers of or investors in debt instruments (or hybrid financial instruments that are determined to have a debt host) with embedded call (put) options. The amendments in this update clarify the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt host. An entity performing the assessment under the amendments in this Update is required to assess the embedded call (put) options solely in accordance with the four-step decision sequence. For public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. For entities other than public business entities, the amendments in this Update are effective for financial statements issued for fiscal years beginning after December 15, 2017, and interim periods within fiscal years beginning after December 15, 2018. Early adoption is permitted, including adoption in an interim period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-07, Investments – Equity Method and Joint Ventures (Topic 323). The Update affects all entities that have an investment that becomes qualified for the equity method of accounting as a result of an increase in the level of ownership interest or degree of influence. The amendments in this Update eliminate the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor's previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. Therefore, upon qualifying for the equity method of accounting, no retroactive adjustment of the investment is required. The amendments in this Update require that an entity that has an available-for-sale equity security that becomes qualified for the equity method of accounting recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The amendments should be applied prospectively upon their effective date to increases in the level of ownership interest or degree of influence that result in the adoption of the equity method. Earlier application is permitted. This ASU is not expected to have a significant impact on the Company’s financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services (that are an output of the entity’s ordinary activities) in exchange for consideration. The amendments in this update do not change the core principle of the guidance in Topic 606; they simply clarify the implementation guidance on principal versus agent considerations. The amendments in this Update are intended to improve the operability and understandability of the implementation guidance on principal versus agent considerations. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements of Update 2014-09. ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718). The amendments in this Update affect all entities that issue share-based payment awards to their employees. The standards in this Update provide simplification for several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as with equity or liabilities, and classification on the statement of cash flows. Some of the areas for simplification apply only to nonpublic entities. In addition to those simplifications, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment. This should not result in a change in practice because the guidance that is being superseded was never effective. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. For all other entities, the amendments are effective for annual periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. Early adoption is permitted for any entity in any interim or annual period. This ASU is not expected to have a significant impact on the Company’s financial statements.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606). The amendments in this Update affect entities with transactions included within the scope of Topic 606, which includes entities that enter into contracts with customers to transfer goods or services in exchange for consideration. The amendments in this Update do not change the core principle for revenue recognition in Topic 606. Instead, the amendments provide (1) more detailed guidance in a few areas and (2) additional implementation guidance and examples based on feedback the FASB received from its stakeholders. The amendments are expected to reduce the degree of judgment necessary to comply with Topic 606, which the FASB expects will reduce the potential for diversity arising in practice and reduce the cost and complexity of applying the guidance. The amendments in this Update affect the guidance in ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which is not yet effective. The effective date and transition requirements for the amendments in this Update are the same as the effective date and transition requirements in Topic 606 (and any other Topic amended by Update 2014-09). ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, defers the effective date of Update 2014-09 by one year. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position and/or results of operations.

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EARNINGS PER SHARE (Tables)

6 Months Ended

Mar. 31, 2016

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

	Three Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	548	$	548	$	1,701	$	1,701
Weighted average shares outstanding		7,380,880		7,380,880		8,571,846		8,571,846
Effect of common stock equivalents		-		270,973		-		1,103,728
Adjusted weighted average shares used in earnings per share computation		7,380,880		7,651,853		8,571,846		9,675,574
Earnings per share - basic and diluted	$	0.08	$	0.07	$	0.20	$	0.18

	Six Months Ended March 31,
	2016				2015
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	961	$	961	$	2,172	$	2,172
Weighted average shares outstanding		7,498,933		7,498,933		8,712,938		8,712,938
Effect of common stock equivalents		-		246,791		-		1,163,172
Adjusted weighted average shares used in earnings per share computation		7,498,933		7,745,724		8,712,938		9,876,110
Earnings per share - basic and diluted	$	0.13	$	0.12	$	0.25	$	0.22

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income [Abstract]

Schedule of changes in accumulated other comprehensive income

	Three Months Ended March 31,
	2016			2015
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities (a)			securities (a)
Beginning Balance	$	(764	)	$	(467	)
Other comprehensive income gain before reclassification		1,547			568
Total other comprehensive income		1,547			568
Ending Balance	$	783		$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

	Six Months Ended March 31,
	2016		2015
	(Dollars in Thousands)
	Unrealized gains (losses)		Unrealized gains (losses)
	on available for sale		on available for sale
	securities (a)		securities (a)
Beginning Balance	$	18	$	(953	)
Other comprehensive income gain before reclassification		765		1,054
Total other comprehensive income		765		1,054
Ending Balance	$	783	$	101

(a) All amounts are net of tax. Amounts in parentheses indicate debits.

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INVESTMENT AND MORTGAGE-BACKED SECURITIES (Tables)

6 Months Ended

Mar. 31, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of amortized cost and fair value of securities, with gross unrealized gains and losses

	March 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	11	$	(25	)	$	18,974
Mortgage-backed securities - U.S. government agencies		103,653		1,060		(132	)		104,581
Corporate bonds		19,401		243		-			19,644
Total debt securities available for sale		142,042		1,314		(157	)		143,199
FHLMC preferred stock		6		30		-			36
Total securities available for sale	$	142,048	$	1,344	$	(157	)	$	143,235
Securities Held to Maturity:
U.S. government and agency obligations	$	34,102	$	423	$	(135	)	$	34,390
Mortgage-backed securities - U.S. government agencies		10,386		815		-			11,201
Total securities held to maturity	$	44,488	$	1,238	$	(135	)	$	45,591

	September 30, 2015
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	18,988	$	-	$	(276	)	$	18,712
Mortgage-backed securities - U.S. government agencies		58,462		475		(225	)		58,712
Total debt securities available for sale		77,450		475		(501	)		77,424
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	77,456	$	528	$	(501	)	$	77,483
Securities Held to Maturity:
U.S. government and agency obligations	$	54,929	$	462	$	(849	)	$	54,542
Mortgage-backed securities - U.S. government agencies		11,455		880		-			12,335
Total securities held to maturity	$	66,384	$	1,342	$	(849	)	$	66,877

Schedule of gross unrealized losses and related fair values of investment securities

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(10	)	$	2,990	$	(15	)	$	4,984	$	(25	)	$	7,974
Mortgage-backed securities - U.S. government agencies		(41	)		10,246		(91	)		11,462		(132	)		21,708
Total securities available for sale		(51	)		13,236		(106	)		16,446		(157	)		29,682
Securities Held to Maturity:
U.S. government and agency obligations		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total securities held to maturity		(7	)		5,987		(128	)		13,846		(135	)		19,833
Total	$	(58	)	$	19,223	$	(234	)	$	30,292	$	(292	)	$	49,515

	Less than 12 months					More than 12 months					Total
	Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	(85	)	$	4,910	$	(191	)	$	13,802	$	(276	)	$	18,712
Mortgage-backed securities - agency		(138	)		22,173		(87	)		9,206		(225	)		31,379
Total securities available for sale		(223	)		27,083		(278	)		23,008		(501	)		50,091
Securities Held to Maturity:
U.S. government and agency obligations		-			-		(849	)		42,603		(849	)		42,603
Total securities held to maturity		-			-		(849	)		42,603		(849	)		42,603
Total	$	(223	)	$	27,083	$	(1,127	)	$	65,611	$	(1,350	)	$	92,694

Schedule of amortized cost and fair value of debt securities by contractual maturity

	March 31, 2016
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due within one year	$	-	$	-	$	-	$	-
Due after one through five years		-		-		-		-
Due after five through ten years		1,999		2,235		19,401		19,644
Due after ten years		32,103		32,155		18,988		18,974
Total	$	34,102	$	34,390	$	38,389	$	38,618

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LOANS RECEIVABLE (Tables)

6 Months Ended

Mar. 31, 2016

Receivables [Abstract]

Schedule of summary of loans receivable

	March 31,			September 30,
	2016			2015
	(Dollars in Thousands)
One-to-four family residential	$	248,720		$	259,163
Multi-family residential		4,617			6,249
Commercial real estate		45,801			25,799
Construction and land development		36,338			38,953
Consumer		649			392
Total loans		336,125			330,556
Undisbursed portion of loans-in-process		(12,838	)		(17,097	)
Deferred loan costs		1,933			2,104
Allowance for loan losses		(3,038	)		(2,930	)
Net loans	$	322,182		$	312,633

Schedule of loans individually and collectively evaluated for impairment by loan segment

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,511		43		428		773		7		276		3,038
Total ending allowance balance	$	1,511	$	43	$	428	$	773	$	7	$	276	$	3,038
Loans:
Individually evaluated for impairment	$	5,435	$	343	$	3,694	$	9,503	$	-			$	18,975
Collectively evaluated for impairment		243,285		4,274		42,107		26,835		649				317,150
Total loans	$	248,720	$	4,617	$	45,801	$	36,338	$	649	$	-	$	336,125

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial business		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for Loan Losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,635		66		231		724		-		5		269		2,930
Total loans	$	1,635	$	66	$	231	$	724	$	-	$	5	$	269	$	2,930
Loans:
Individually evaluated for impairment	$	4,206	$	-	$	3,768	$	8,796	$	-	$	-	$	-	$	16,770
Collectively evaluated for impairment		254,957		6,249		22,031		30,157		-		392		-		313,786
Total loans	$	259,163	$	6,249	$	25,799	$	38,953	$	-	$	392	$	-	$	330,556

Schedule of impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	5,435	$	5,435	$	5,780
Multi-family residential		-		-		343		343		343
Commercial real estate		-		-		3,694		3,694		3,694
Construction and land development		-		-		9,503		9,503		9,503
Total Loans	$	-	$	-	$	18,975	$	18,975	$	19,320

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,206	$	4,206	$	4,550
Commercial real estate		-		-		3,768		3,768		3,768
Construction and land development		-		-		8,796		8,796		8,796
Total Loans	$	-	$	-	$	16,770	$	16,770	$	17,114

Schedule of average investment in impaired loans and related interest income recognized

	Three Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,069	$	20	$	29
Multi-family residential		345		-		-
Commercial real estate		3,703		27		-
Construction and land development		9,410		126		-
Total Loans	$	18,527	$	173	$	29

	Six Months Ended March 31, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,781	$	43	$	59
Multi-family residential		348		-		-
Commercial real estate		3,725		42		12
Construction and land development		9,206		252		64
Total Loans	$	18,060	$	337	$	135

	Three Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,068	$	124	$	42
Multi-family residential		361		6		-
Commercial real estate		3,758		51		24
Construction and land development		7,743		106		64
Total Loans	$	21,930	$	287	$	130

	Six Months Ended March 31, 2015
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	10,179	$	263	$	77
Multi-family residential		363		13		-
Commercial real estate		3,764		102		35
Construction and land development		7,628		210		64
Total Loans	$	21,934	$	588	$	176

Schedule of classes of the loan portfolio in which a formal risk weighting system is utilized

	March 31, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	2,355	$	1,705	$	1,375	$	5,435
Multi-family residential		4,274		-		343		4,617
Commercial real estate		42,088		956		2,757		45,801
Construction and land development		26,834		-		9,504		36,338
Total Loans	$	75,551	$	2,661	$	13,979	$	92,191

	September 30, 2015
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	1,348	$	2,107	$	751	$	4,206
Multi-family residential		5,898		351		-		6,249
Commercial real estate		22,005		965		2,829		25,799
Construction and land development		30,157		-		8,796		38,953
Total Loans	$	59,408	$	3,423	$	12,376	$	75,207

Schedule of loans in which a formal risk rating system is not utilized, but loans are segregated between performing and non-performing

	March 31, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	243,285	$	-	$	243,285
Consumer		649		-		649
Total Loans	$	243,934	$	-	$	243,934

	September 30, 2015
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	254,957	$	-	$	254,957
Consumer		392		-		392
Total Loans	$	255,349	$	-	$	255,349

Schedule of loan categories of the loan portfolio summarized by the aging categories of performing and delinquent loans and nonaccrual loans

	March 31, 2016
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	243,804	$	2,266	$	2,650	$	-	$	2,266	$	248,720	$	4,145
Multi-family residential		4,617		-		-		-		-		4,617		-
Commercial real estate		43,994		1,625		182		-		272		45,801		1,535
Construction and land development		29,374		6,964		-		-		-		36,338		9,503
Consumer		540		109		-		-		109		649		-
Total Loans	$	322,329	$	10,964	$	2,832	$	-	$	2,647	$	336,125	$	15,183

	September 30, 2015
							90 Days+		Total
			30-89 Days		90 Days +		Past Due		Past Due		Total		Non-
	Current		Past Due		Past Due		and Accruing		and Accruing		Loans		Accrual
	(Dollars in Thousands)
One-to-four family residential	$	255,669	$	1,462	$	2,032	$	-	$	1,462	$	259,163	$	3,547
Multi-family residential		6,249		-		-		-		-		6,249		-
Commercial real estate		25,114		504		181		-		504		25,799		1,589
Construction and land development		38,953		-		-		-		-		38,953		8,796
Consumer		392		-		-		-		-		392		-
Total Loans	$	326,377	$	1,966	$	2,213	$	-	$	1,966	$	330,556	$	13,932

Schedule of primary segments of the allowance for loan losses, segmented into the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment.

	Three Months Ended March 31, 2016
	One- to four-family residential		Multi- family residential			Commercial real estate		Construction and land development			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at December 31, 2015	$	1,471	$	58		$	359	$	757		$	8		$	266	$	2,919
Charge-offs		-		-			-		-			-			-		-
Recoveries		-		-			-		44			-			-		44
Provision		40		(15	)		69		(28	)		(1	)		10		75
ALLL balance at March 31, 2016	$	1,511	$	43		$	428	$	773		$	7		$	276	$	3,038

	Six Months Ended March 31, 2016
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2015	$	1,635		$	66		$	231	$	724	$	5	$	269	$	2,930
Charge-offs		(11	)		-			-		-		-		-		(11	)
Recoveries		-			-			-		44		-		-		44
Provision		(113	)		(23	)		197		5		2		7		75
ALLL balance at March 31, 2016	$	1,511		$	43		$	428	$	773	$	7	$	276	$	3,038

	Three Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential		Commercial real estate			Construction and land development		Commercial  business			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2014	$	1,492		$	51	$	216		$	493	$	5		$	4	$	239		$	2,500
Charge-offs		(212	)		-		-			-		-			-		-			(212	)
Recoveries		-			-		-			-		-			-		-			-
Provision		265			-		(9	)		52		(5	)		-		(3	)		300
ALLL balance at March 31, 2015	$	1,545		$	51	$	207		$	545	$	-		$	4	$	236		$	2,588

	Six Months Ended March  31, 2015
	One- to four-family residential			Multi- family residential			Commercial real estate		Construction and land development		Commercial  business			Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2014	$	1,663		$	67		$	122	$	323	$	15		$	4	$	231	$	2,425
Charge-offs		(212	)		-			-		-		-			-		-		(212	)
Recoveries		-			-			-		-		-			-		-		-
Provision		94			(16	)		85		222		(15	)		-		5		375
ALLL balance at March 31, 2015	$	1,545		$	51		$	207	$	545	$	-		$	4	$	236	$	2,588

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DEPOSITS (Tables)

6 Months Ended

Mar. 31, 2016

Deposits [Abstract]

Schedule of major classifications of deposits

	March 31,					September 30,
	2016					2015
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	57,470		15.0	%	$	60,736		16.6	%
Interest-bearing checking accounts		36,001		9.4			35,649		9.8
Non-interest bearing checking accounts		2,775		0.7			2,293		0.6
Passbook, club and statement savings		69,999		18.2			70,355		19.3
Certificates maturing in six months or less		69,843		18.2			49,857		13.7
Certificates maturing in more than six months		147,982		38.5			146,184		40.0
Total	$	384,070		100.0	%	$	365,074		100.0	%

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ADVANCES (Tables)

6 Months Ended

Mar. 31, 2016

Advances from Federal Home Loan Banks [Abstract]

Schedule of collateral agreement with the FHLB

Type	Maturity Date	Amount		Coupon			Call Date
		(Dollars in Thousands)
Fixed Rate -Advance	1-Apr-16	$	3,000		0.60	%	Not Applicable
Fixed Rate -Advance	4-Apr-16		3,000		0.60	%	Not Applicable
Fixed Rate -Advance	17-Nov-17		10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		3,505		1.16	%	Not Applicable
Fixed Rate -Advance	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate -Advance	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate -Advance	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate -Amortizing	18-Nov-19		5,054		1.53	%	Not Applicable
		$	37,059		1.21	%

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INCOME TAXES (Tables)

6 Months Ended

Mar. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of deferred income taxes

	March 31,			September 30,
	2016			2015
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,210		$	1,185
Nonaccrual interest		96			86
Accrued vacation		37			119
Capital loss carryforward		506			534
Split dollar life insurance		19			19
Post-retirement benefits		104			126
Employee benefit plans		579			530
Total deferred tax assets		2,551			2,599
Valuation allowance		(506	)		(534	)
Total deferred tax assets, net of valuation allowance		2,045			2,065
Deferred tax liabilities:
Property		533			365
Unrealized gains on available for sale securities		404			10
Deferred loan fees		657			715
Total deferred tax liabilities		1,594			1,090
Net deferred tax assets	$	451		$	975

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STOCK COMPENSATION PLANS (Tables)

6 Months Ended

Mar. 31, 2016

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of summary of the non-vested stock award activity

	Six Months Ended March 31, 2016
	Number of Shares (1)			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Issued		-			-
Forfeited		(36,762	)		11.55
Vested		(49,511	)		11.47
Nonvested stock awards at the March 31, 2016		155,155		$	11.87

	Six Months Ended March 31, 2015
	Number of Shares			Weighted Average Grant Date Fair  Value
Nonvested stock awards at October 1, 2014		38,055		$	8.07
Issued		235,500			12.23
Forfeited		-			-
Vested		(9,578	)		8.07
Nonvested stock awards at the March 31, 2015		263,977		$	12.07

Schedule of summary of the status of the company' stock options under the stock option plan

	Six Months Ended March 31, 2016
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(130,535	)		11.49
Forfeited		(93,939	)		11.55
Outstanding at March 31, 2016		849,956		$	12.03
Exercisable at March 31, 2016		347,037		$	11.38

	Six Months Ended March 31, 2015
	Number of Shares		Weighted Average Exercise Price
Outstanding at October 1, 2014		530,084	$	10.86
Granted		608,737		12.23
Exercised		-		-
Forfeited		-		-
Outstanding at March 31, 2015		1,138,821	$	11.59
Exercisable at March 31, 2015		417,767	$	11.37

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FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Mar. 31, 2016

Fair Value Disclosures [Abstract]

Schedule of assets measured at fair value on recurring basis

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,974	$	-	$	18,974
Mortgage-backed securities - U.S. Government agencies		-		104,581		-		104,581
Corporate bonds		-		19,644				19,644
FHLMC preferred stock		36		-		-		36
Total	$	36	$	143,199	$	-	$	143,235

	Category Used for Fair Value Measurement
	Level 1		Level 2		Level 3		Total
	(Dollars in Thousands)
Assets:
Securities available for sale:
U.S. Government and agency obligations	$	-	$	18,712	$	-	$	18,712
Mortgage-backed securities - U.S. Government agencies		-		58,712		-		58,712
FHLMC preferred stock		59		-		-		59
Total	$	59	$	77,424	$	-	$	77,483

Schedule of summary of non-recurring fair value measurements

	At March 31, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,975	$	18,975
Total	$	-	$	-	$	18,975	$	18,975

	At September 30, 2015
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,770	$	16,770
Real estate owned		-		869		-		869
Total	$	-	$	869	$	16,770	$	17,639

Schedule of nonrecurring fair value measurements categorized within level 3 of the fair value hierarchy

	At March 31, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,975	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2015
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,770	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	10% discount
Real estate owned	$	869	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

(1) Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs, which are not identifiable.

(2) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

(3) Includes qualitative adjustments by management and estimated liquidation expenses.

Schedule of the estimated fair value amounts

					Fair Value Measurements at
					March 31, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	7,330	$	7,330	$	7,330	$	-	$	-
Investment and mortgage-backed securities available for sale		143,235		143,235		36		143,199		-
Investment and mortgage-backed securities held to maturity		44,488		45,591		-		45,591		-
Loans receivable, net		322,182		322,200		-		-		322,200
Accrued interest receivable		1,774		1,774		1,774		-		-
Federal Home Loan Bank stock		1,851		1,851		1,851		-		-
Bank owned life insurance		12,890		12,890		12,890		-		-
Liabilities:
Checking accounts		38,776		38,776		38,776		-		-
Money market deposit accounts		57,470		57,470		57,470		-		-
Passbook, club and statement savings accounts		69,999		69,999		69,999		-		-
Certificates of deposit		217,825		220,340		-		-		220,340
Advances from Federal Home Loan Bank		37,059		37,096		-		-		37,096
Accrued interest payable		543		543		543		-		-
Advances from borrowers for taxes and insurance		1,777		1,777		1,777		-		-

					Fair Value Measurements at
					September 30, 2015
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	11,272	$	11,272	$	11,272	$	-	$	-
Investment and mortgage-backed securities available for sale		77,483		77,483		59		77,424		-
Investment and mortgage-backed securities held to maturity		66,384		66,877		-		66,877		-
Loans receivable, net		312,633		312,613		-		-		312,613
Accrued interest receivable		1,665		1,665		1,665		-		-
Federal Home Loan Bank stock		369		369		369		-		-
Bank owned life insurance		12,722		12,722		12,722		-		-
Liabilities:
Checking accounts		37,942		37,942		37,942		-		-
Money market deposit accounts		60,736		60,736		60,736		-		-
Passbook, club and statement savings accounts		70,355		70,355		70,355		-		-
Certificates of deposit		196,041		199,639		-		-		199,639
Accrued interest payable		1,291		1,291		1,291		-		-
Advances from borrowers for taxes and insurance		1,670		1,670		1,670		-		-

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SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals)	6 Months Ended
	Mar. 31, 2016 USD ($) Branch ATMs shares	Mar. 31, 2015 USD ($) shares
Significant Accounting Policies [Line Items]
Number of full service branch offices	5
Number of ATMs in banking offices | ATMs	6
Purchase of treasury stock, shares | shares	430,626	309,614
Purchase of treasury stock | $	$ 6,705,000	$ 3,790,000
2014 Stock Incentive Plan
Significant Accounting Policies [Line Items]
Purchase of treasury stock, shares | shares	41,000
Purchase of treasury stock | $	$ 640,000
Philadelphia (Philadelphia County)
Significant Accounting Policies [Line Items]
Number of full service branch offices	5
Drexel Hill, Delaware County, Pennsylvania
Significant Accounting Policies [Line Items]
Number of full service branch offices	1

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EARNINGS PER SHARE - Calculated basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Earnings per share - basic
Net income	$ 548	$ 1,701	$ 961	$ 2,172
Weighted average shares outstanding - basic	7,380,880	8,571,846	7,498,933	8,712,938
Effect of common stock equivalents - basic
Adjusted weighted average shares used in earnings per share computation - basic	7,380,880	8,571,846	7,498,933	8,712,938
Earnings per share - basic (in dollars per share)	$ 0.08	$ 0.20	$ 0.13	$ 0.25
Earnings per share - diluted
Net income	$ 548	$ 1,701	$ 961	$ 2,172
Weighted average shares outstanding - diluted	7,380,880	8,571,846	7,498,933	8,712,938
Effect of common stock equivalents - diluted	270,973	1,103,728	246,791	1,163,172
Adjusted weighted average shares used in earnings per share computation - diluted	7,651,853	9,675,574	7,745,724	9,876,110
Earnings per share - diluted (in dollars per share)	$ 0.07	$ 0.18	$ 0.12	$ 0.22

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Changes in accumulated other comprehensive income (loss) by component net of tax (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning Balance				$ 18
Total other comprehensive income		$ 1,547	$ 568	765	$ 1,054
Ending Balance		783		783
Unrealized gains (losses) on available for sale securities
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning Balance	[1]	(764)	(467)	18	(953)
Other comprehensive income (loss) gain before reclassification	[1]	1,547	568	765	1,054
Total other comprehensive income	[1]	1,547	568	765	1,054
Ending Balance	[1]	$ 783	$ 101	$ 783	$ 101

[1] All amounts are net of tax. Amounts in parentheses indicate debits.

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of investment and mortgage-backed securities, with gross unrealized gains and losses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Securities Available for Sale:
Amortized Cost	$ 142,048	$ 77,456
Gross Unrealized Gains	1,344	528
Gross Unrealized Losses	(157)	(501)
Fair Value	143,235	77,483
Securities Held to Maturity:
Amortized Cost	44,488	66,384
Gross Unrealized Gains	1,238	1,342
Gross unrealized losses	(135)	(849)
Fair value	45,591	66,877
Debt securities available for sale
Securities Available for Sale:
Amortized Cost	142,042	77,450
Gross Unrealized Gains	1,314	475
Gross Unrealized Losses	(157)	(501)
Fair Value	143,199	77,424
U.S. government and agency obligations
Securities Available for Sale:
Amortized Cost	18,988	$ 18,988
Gross Unrealized Gains	11
Gross Unrealized Losses	(25)	$ (276)
Fair Value	18,974	18,712
Securities Held to Maturity:
Amortized Cost	34,102	54,929
Gross Unrealized Gains	423	462
Gross unrealized losses	(135)	(849)
Fair value	34,390	54,542
Mortgage-backed securities - US government agencies
Securities Available for Sale:
Amortized Cost	103,653	58,462
Gross Unrealized Gains	1,060	475
Gross Unrealized Losses	(132)	(225)
Fair Value	104,581	58,712
Securities Held to Maturity:
Amortized Cost	10,386	11,455
Gross Unrealized Gains	$ 815	$ 880
Gross unrealized losses
Fair value	$ 11,201	$ 12,335
Corporate bonds
Securities Available for Sale:
Amortized Cost	19,401
Gross Unrealized Gains	$ 243
Gross Unrealized Losses
Fair Value	$ 19,644
FHLMC preferred stock
Securities Available for Sale:
Amortized Cost	6	6
Gross Unrealized Gains	$ 30	$ 53
Gross Unrealized Losses
Fair Value	$ 36	$ 59

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Gross unrealized losses and related fair values of investment securities, aggregated by investment category and length of time (Details 1) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	$ (51)	$ (223)
Less than 12 months - Fair value	13,236	27,083
More than 12 months - Gross Unrealized Losses	(106)	(278)
More than 12 months - Fair value	16,446	23,008
Gross Unrealized Losses - Total	(157)	(501)
Fair Value - Total	29,682	$ 50,091
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(7)
Less than 12 months - Fair value	5,987
More than 12 months - Gross Unrealized Losses	(128)	$ (849)
More than 12 months - Fair value	13,846	42,603
Gross Unrealized Losses -Total	(135)	(849)
Fair Value - Total	19,833	42,603
Less than 12 months - Gross Unrealized Losses	(58)	(223)
Less than 12 months - Fair Value	19,223	27,083
More than 12 months Gross Unrealized Losses	(234)	(1,127)
More than 12 months - Fair Value	30,292	65,611
Gross Unrealized Losses, Total	(292)	(1,350)
Fair Value - Total	49,515	92,694
U.S. government and agency obligations
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(10)	(85)
Less than 12 months - Fair value	2,990	4,910
More than 12 months - Gross Unrealized Losses	(15)	(191)
More than 12 months - Fair value	4,984	13,802
Gross Unrealized Losses - Total	(25)	(276)
Fair Value - Total	7,974	$ 18,712
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(7)
Less than 12 months - Fair value	5,987
More than 12 months - Gross Unrealized Losses	(128)	$ (849)
More than 12 months - Fair value	13,846	42,603
Gross Unrealized Losses -Total	(135)	(849)
Fair Value - Total	19,833	42,603
Mortgage-backed securities - US government agencies
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(41)	(138)
Less than 12 months - Fair value	10,246	22,173
More than 12 months - Gross Unrealized Losses	(91)	(87)
More than 12 months - Fair value	11,462	9,206
Gross Unrealized Losses - Total	(132)	(225)
Fair Value - Total	$ 21,708	$ 31,379

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of debt securities, by contractual maturity (Details 3) $ in Thousands	Mar. 31, 2016 USD ($)
Held to Maturity, Amortized Cost
Due within one year
Due after one through five years
Due after five through ten years	$ 1,999
Due after ten years	32,103
Total	$ 34,102
Held to Maturity, Fair Value
Due within one year
Due after one through five years
Due after five through ten years	$ 2,235
Due after ten years	32,155
Total	$ 34,390
Available for Sale, Amortized Cost
Due within one year
Due after one through five years
Due after five through ten years	$ 19,401
Due after ten years	18,988
Total	$ 38,389
Available for Sale, Fair Value
Due within one year
Due after one through five years
Due after five through ten years	$ 19,644
Due after ten years	18,974
Total	$ 38,618

XML

INVESTMENT AND MORTGAGE-BACKED SECURITIES (Detail Textuals)	Mar. 31, 2016 Security
U.S. government and agency obligations
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company	3
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	9
U.S. Agency Issued Mortgage-Backed Securities
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company	7
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	7

XML

LOANS RECEIVABLE - Summary of Loans receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for loan losses	$ (3,038)		$ (2,930)
Net loans	322,182		312,633
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
One-to-four family residential	248,720		259,163
Multi-family residential	4,617		6,249
Commercial real estate	45,801		25,799
Construction and land development	36,338		38,953
Consumer	649		392
Total loans	336,125		330,556
Undisbursed portion of loans-in-process	(12,838)		(17,097)
Deferred loan costs	1,933		2,104
Allowance for loan losses	(3,038)	$ (2,919)	(2,930)	$ (2,588)	$ (2,500)	$ (2,425)
Net loans	$ 322,182		$ 312,633

XML

LOANS RECEIVABLE - Summary of loans individually evaluated for impairment by loan segment (Details 1) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014
Allowance for loan losses
Total ending allowance balance	$ 3,038		$ 2,930
Loans Receivable
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 3,038		$ 2,930
Total ending allowance balance	3,038	$ 2,919	2,930	$ 2,588	$ 2,500	$ 2,425
Loans
Individually evaluated for impairment	18,975		16,770
Collectively evaluated for impairment	317,150		313,786
Total loans	$ 336,125		$ 330,556
Loans Receivable | One-to-four family residential
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 1,511		$ 1,635
Total ending allowance balance	1,511	1,471	1,635	1,545	1,492	1,663
Loans
Individually evaluated for impairment	5,435		4,206
Collectively evaluated for impairment	243,285		254,957
Total loans	$ 248,720		$ 259,163
Loans Receivable | Multi-family residential
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 43		$ 66
Total ending allowance balance	43	58	$ 66	51	51	67
Loans
Individually evaluated for impairment	343
Collectively evaluated for impairment	4,274		$ 6,249
Total loans	$ 4,617		$ 6,249
Loans Receivable | Commercial real estate
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 428		$ 231
Total ending allowance balance	428	359	231	207	216	122
Loans
Individually evaluated for impairment	3,694		3,768
Collectively evaluated for impairment	42,107		22,031
Total loans	$ 45,801		$ 25,799
Loans Receivable | Construction and land development
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 773		$ 724
Total ending allowance balance	773	757	724	$ 545	493	323
Loans
Individually evaluated for impairment	9,503		8,796
Collectively evaluated for impairment	26,835		30,157
Total loans	$ 36,338		$ 38,953
Loans Receivable | Commercial business
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment
Total ending allowance balance					5	15
Loans
Individually evaluated for impairment
Collectively evaluated for impairment
Total loans
Loans Receivable | Consumer
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 7		$ 5
Total ending allowance balance	$ 7	8	$ 5	$ 4	4	4
Loans
Individually evaluated for impairment
Collectively evaluated for impairment	$ 649		$ 392
Total loans	$ 649		$ 392
Loans Receivable | Unallocated
Allowance for loan losses
Individually evaluated for impairment
Collectively evaluated for impairment	$ 276		$ 269
Total ending allowance balance	$ 276	$ 266	$ 269	$ 236	$ 239	$ 231
Loans
Individually evaluated for impairment
Collectively evaluated for impairment
Total loans

XML

LOANS RECEIVABLE - Impaired loans by class, segregated by those for which specific allowance was required and those for which specific allowance was not necessary (Details 2) - Loans Receivable - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment
Impaired Loans with Specific Allowance - Related Allowance
Impaired Loans with No Specific Allowance - Recorded Investment	$ 18,975	$ 16,770
Total Impaired Loans - Recorded Investment	18,975	16,770
Total impaired loans - Unpaid Principal Balance	$ 19,320	$ 17,114
One-to-four family residential
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment
Impaired Loans with Specific Allowance - Related Allowance
Impaired Loans with No Specific Allowance - Recorded Investment	$ 5,435	$ 4,206
Total Impaired Loans - Recorded Investment	5,435	4,206
Total impaired loans - Unpaid Principal Balance	$ 5,780	$ 4,550
Multi-family residential
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment
Impaired Loans with Specific Allowance - Related Allowance
Impaired Loans with No Specific Allowance - Recorded Investment	$ 343
Total Impaired Loans - Recorded Investment	343
Total impaired loans - Unpaid Principal Balance	$ 343
Commercial real estate
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment
Impaired Loans with Specific Allowance - Related Allowance
Impaired Loans with No Specific Allowance - Recorded Investment	$ 3,694	$ 3,768
Total Impaired Loans - Recorded Investment	3,694	3,768
Total impaired loans - Unpaid Principal Balance	$ 3,694	$ 3,768
Construction and land development
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment
Impaired Loans with Specific Allowance - Related Allowance
Impaired Loans with No Specific Allowance - Recorded Investment	$ 9,503	$ 8,796
Total Impaired Loans - Recorded Investment	9,503	8,796
Total impaired loans - Unpaid Principal Balance	$ 9,503	$ 8,796

XML

LOANS RECEIVABLE - Average recorded investment in impaired loans and related interest income recognized (Details 3) - Loans Receivable - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	$ 18,527	$ 21,930	$ 18,060	$ 21,934
Income Recognized on Accrual Basis	173	287	337	588
Income Recognized on Cash Basis	29	130	135	176
One-to-four family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	5,069	10,068	4,781	10,179
Income Recognized on Accrual Basis	20	124	43	263
Income Recognized on Cash Basis	29	42	59	77
Multi-family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	$ 345	361	$ 348	363
Income Recognized on Accrual Basis		$ 6		$ 13
Income Recognized on Cash Basis
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	$ 3,703	$ 3,758	$ 3,725	$ 3,764
Income Recognized on Accrual Basis	$ 27	51	42	102
Income Recognized on Cash Basis		24	12	35
Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Average Recorded Investment	$ 9,410	7,743	9,206	7,628
Income Recognized on Accrual Basis	$ 126	106	252	210
Income Recognized on Cash Basis		$ 64	$ 64	$ 64

XML

LOANS RECEIVABLE - Summary of classes of loan portfolio in which formal risk weighting system is used (Details 4) - Loans Receivable - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 336,125	$ 330,556
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	248,720	259,163
Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,617	6,249
Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	45,801	25,799
Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total loans	36,338	$ 38,953
Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total loans
Consumer
Financing Receivable, Recorded Investment [Line Items]
Total loans	649	$ 392
Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total loans	92,191	75,207
Risk Rating System | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	5,435	4,206
Risk Rating System | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,617	6,249
Risk Rating System | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	45,801	25,799
Risk Rating System | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total loans	36,338	38,953
Risk Rating System | Pass
Financing Receivable, Recorded Investment [Line Items]
Total loans	75,551	59,408
Risk Rating System | Pass | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,355	1,348
Risk Rating System | Pass | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	4,274	5,898
Risk Rating System | Pass | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	42,088	22,005
Risk Rating System | Pass | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total loans	26,834	30,157
Risk Rating System | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,661	3,423
Risk Rating System | Special Mention | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 1,705	2,107
Risk Rating System | Special Mention | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans		351
Risk Rating System | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 956	$ 965
Risk Rating System | Special Mention | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total loans
Risk Rating System | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 13,979	$ 12,376
Risk Rating System | Substandard | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	1,375	$ 751
Risk Rating System | Substandard | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	343
Risk Rating System | Substandard | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total loans	2,757	$ 2,829
Risk Rating System | Substandard | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 9,504	$ 8,796

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LOANS RECEIVABLE - Loans in which formal risk rating system is not utilized, but loans are segregated between performing and non-performing based primarily on delinquency status (Details 5) - Loans Receivable - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 336,125	$ 330,556
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	248,720	259,163
Consumer
Financing Receivable, Recorded Investment [Line Items]
Total loans	649	392
Non Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total loans	243,934	255,349
Non Risk Rating System | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	243,285	254,957
Non Risk Rating System | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total loans	649	392
Non Risk Rating System | Performing
Financing Receivable, Recorded Investment [Line Items]
Total loans	243,934	255,349
Non Risk Rating System | Performing | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans	243,285	254,957
Non Risk Rating System | Performing | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total loans	$ 649	$ 392
Non Risk Rating System | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total loans
Non Risk Rating System | Nonperforming | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total loans
Non Risk Rating System | Nonperforming | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total loans

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LOANS RECEIVABLE - Loan categories of loan portfolio summarized by aging categories of performing loans and nonaccrual loans (Details 6) - Loans Receivable - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 322,329	$ 326,377
90 Days+ Past Due and Accruing
Total Past Due and Accruing	$ 2,647	$ 1,966
Total Loans	336,125	330,556
Non- Accrual	15,183	13,932
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	10,964	1,966
90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,832	2,213
One-to-four family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 243,804	$ 255,669
90 Days+ Past Due and Accruing
Total Past Due and Accruing	$ 2,266	$ 1,462
Total Loans	248,720	259,163
Non- Accrual	4,145	3,547
One-to-four family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,266	1,462
One-to-four family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	2,650	2,032
Multi-family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 4,617	$ 6,249
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	$ 4,617	$ 6,249
Non- Accrual
Multi-family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans
Multi-family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 43,994	$ 25,114
90 Days+ Past Due and Accruing
Total Past Due and Accruing	$ 272	$ 504
Total Loans	45,801	25,799
Non- Accrual	1,535	1,589
Commercial real estate | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	1,625	504
Commercial real estate | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	182	181
Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 29,374
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	$ 36,338
Non- Accrual	9,503
Construction and land development | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 6,964
Construction and land development | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 540	$ 392
90 Days+ Past Due and Accruing
Total Past Due and Accruing	$ 109
Total Loans	$ 649	$ 392
Non- Accrual
Consumer | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans	$ 109
Consumer | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Total Loans

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LOANS RECEIVABLE - Activity in allowance (Details 7) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance			$ 2,930
Provision	$ 75	$ 300	75	$ 375
ALLL balance	3,038		3,038
Loans Receivable
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 2,919	2,500	2,930	2,425
Charge-offs		$ (212)	(11)	$ (212)
Recoveries	$ 44		44
Provision	75	$ 300	75	$ 375
ALLL balance	3,038	2,588	3,038	2,588
Loans Receivable | One- to four-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 1,471	1,492	1,635	1,663
Charge-offs		$ (212)	$ (11)	$ (212)
Recoveries
Provision	$ 40	$ 265	$ (113)	$ 94
ALLL balance	1,511	1,545	1,511	1,545
Loans Receivable | Multi-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 58	$ 51	$ 66	$ 67
Charge-offs
Recoveries
Provision	$ (15)		$ (23)	$ (16)
ALLL balance	43	$ 51	43	51
Loans Receivable | Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 359	$ 216	$ 231	$ 122
Charge-offs
Recoveries
Provision	$ 69	$ (9)	$ 197	$ 85
ALLL balance	428	207	428	207
Loans Receivable | Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 757	$ 493	$ 724	$ 323
Charge-offs
Recoveries	$ 44		$ 44
Provision	(28)	$ 52	5	$ 222
ALLL balance	773	545	$ 773	545
Loans Receivable | Commercial business
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance		$ 5		$ 15
Charge-offs
Recoveries
Provision		$ (5)		$ (15)
ALLL balance
Loans Receivable | Consumer
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 8	$ 4	$ 5	$ 4
Charge-offs
Recoveries
Provision	$ (1)		$ 2
ALLL balance	7	$ 4	7	$ 4
Loans Receivable | Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 266	$ 239	$ 269	$ 231
Charge-offs
Recoveries
Provision	$ 10	$ (3)	$ 7	$ 5
ALLL balance	$ 276	$ 236	$ 276	$ 236

XML

LOANS RECEIVABLE (Detail Textuals)	3 Months Ended		6 Months Ended
	Mar. 31, 2016 USD ($) Security	Mar. 31, 2015 USD ($)	Mar. 31, 2016 USD ($) Security	Mar. 31, 2015 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	2
Provision	$ 75,000	$ 300,000	$ 75,000	$ 375,000
Loans Receivable
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	10
Pre-Modification Outstanding Recorded Investment	$ 7,900,000
Provision	75,000	300,000	75,000	375,000
Loans Receivable | One- to four-family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision	$ 40,000	265,000	(113,000)	94,000
Loans Receivable | Single family real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	2
Pre-Modification Outstanding Recorded Investment	$ 1,600,000
Loans Receivable | Single family real estate | Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	1
Pre-Modification Outstanding Recorded Investment	$ 1,400,000
Loans Receivable | Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	7
Pre-Modification Outstanding Recorded Investment	$ 2,900,000
Provision	69,000	(9,000)	$ 197,000	85,000
Number of loans exception to TDRs | Security			1
Exception to TDRs			$ 756,000
Loan 60 to 89 days past due	$ 731,000
Loans Receivable | Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Security	1
Pre-Modification Outstanding Recorded Investment	$ 3,400,000
Provision	(28,000)	$ 52,000	$ 5,000	$ 222,000
Loan 60 to 89 days past due	$ 3,400,000

XML

DEPOSITS - Major classifications of deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Amount
Money market deposit accounts	$ 57,470	$ 60,736
Interest-bearing checking accounts	36,001	35,649
Non-interest bearing checking accounts	2,775	2,293
Passbook, club and statement savings	69,999	70,355
Certificates maturing in six months or less	69,843	49,857
Certificates maturing in more than six months	147,982	146,184
Total deposits	$ 384,070	$ 365,074
Percent
Money market deposit accounts	15.00%	16.60%
Interest-bearing checking accounts	9.40%	9.80%
Non-interest bearing checking accounts	0.70%	0.60%
Passbook, club and statement savings	18.20%	19.30%
Certificates maturing in six months or less	18.20%	13.70%
Certificates maturing in more than six months	38.50%	40.00%
Total	100.00%	100.00%

XML

DEPOSITS (Detail Textuals) - USD ($) $ in Millions	Mar. 31, 2016	Sep. 30, 2015
Deposits [Abstract]
Certificates of $250,000 and over	$ 17.2	$ 32.7

XML

ADVANCES (Details) $ in Thousands	6 Months Ended
	Mar. 31, 2016 USD ($)
Federal Home Loan Bank, Advances [Line Items]
Amount	$ 37,059
Coupon	1.21%
Fixed Rate -Advance Maturity Date 1-Apr-16
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Apr. 01, 2016
Amount	$ 3,000
Coupon	0.60%
Call Date	Not Applicable
Fixed Rate -Advance Maturity Date 4-Apr-16
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Apr. 04, 2016
Amount	$ 3,000
Coupon	0.60%
Call Date	Not Applicable
Fixed Rate -Advance Maturity Date 17-Nov-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Nov. 17, 2017
Amount	$ 10,000
Coupon	1.20%
Call Date	Not Applicable
Fixed Rate -Amortizing Maturity Date 1-Dec-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Dec. 01, 2017
Amount	$ 3,505
Coupon	1.16%
Call Date	Not Applicable
Fixed Rate -Advance Maturity Date 4-Dec-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Dec. 04, 2017
Amount	$ 2,000
Coupon	1.15%
Call Date	Not Applicable
Fixed Rate -Advance Maturity Date 16-Nov-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Nov. 16, 2018
Amount	$ 7,500
Coupon	1.40%
Call Date	Not Applicable
Fixed Rate -Advance Maturity Date 3-Dec-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Dec. 03, 2018
Amount	$ 3,000
Coupon	1.54%
Call Date	Not Applicable
Fixed Rate -Amortizing Maturity Date 18-Nov-19
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Nov. 18, 2019
Amount	$ 5,054
Coupon	1.53%
Call Date	Not Applicable

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INCOME TAXES - Items that gave rise to significant portions of deferred income taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Deferred tax assets:
Allowance for loan losses	$ 1,210	$ 1,185
Nonaccrual interest	96	86
Accrued vacation	37	119
Capital loss carryforward	506	534
Split dollar life insurance	19	19
Post-retirement benefits	104	126
Employee benefit plans	579	530
Total deferred tax assets	2,551	2,599
Valuation allowance	(506)	(534)
Total deferred tax assets, net of valuation allowance	2,045	2,065
Deferred tax liabilities:
Property	533	365
Unrealized gains on available for sale securities	404	10
Deferred loan fees	657	715
Total deferred tax liabilities	1,594	1,090
Net deferred tax assets	$ 451	$ 975

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INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Valuation allowance	$ 506	$ 534

XML

STOCK COMPENSATION PLANS - Summary of non-vested stock award activity (Details) - 2008 Recognition and Retention Plan ("2008 RRP") - Nonvested Stock Awards - $ / shares	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Number of Shares
Nonvested stock awards at October 1	241,428	38,055
Issued		235,500
Forfeited	(36,762)
Vested	(49,511)	(9,578)
Nonvested stock awards at the March 31	155,155	263,977
Weighted Average Grant Date Fair Value
Nonvested stock awards at October 1	$ 11.74	$ 8.07
Issued		$ 12.23
Forfeited	$ 11.55
Vested	11.47	$ 8.07
Nonvested stock awards at the March 31	$ 11.87	$ 12.07

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STOCK COMPENSATION PLANS - Summary of status of stock options under Stock Option Plan (Details 1) - Stock Options Plan - Stock Options - $ / shares	6 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Number of Shares
Outstanding at October 1	1,074,430	530,084
Granted		608,737
Exercised	(130,535)
Forfeited	(93,939)
Outstanding at March 31	849,956	1,138,821
Exercisable at March 31	347,037	417,767
Weighted Average Exercise Price
Outstanding at October 1	$ 11.92	$ 10.86
Granted		$ 12.23
Exercised	$ 11.49
Forfeited	11.55
Outstanding at March 31	12.03	$ 11.59
Exercisable at March 31	$ 11.38	$ 11.37

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STOCK COMPENSATION PLANS (Detail Textuals) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	6 Months Ended
	Jan. 31, 2014	Dec. 31, 2013	Mar. 31, 2016	Mar. 31, 2015
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP shares committed to be released, shares			17,758	17,756
Compensation expense of ESOP			$ 265	$ 238
Employee Stock Ownership Plan ESOP Plan
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
Number of common shares purchased under employee stock ownership plan (ESOP)	30,100	255,564	427,057
Aggregate cost of common stock purchased under employee stock ownership plan (ESOP)	$ 3,100		$ 4,500
Number of shares allocated from suspense account to participants			697,271
ESOP shares committed to be released, shares			286,635
Compensation expense of ESOP			$ 265	$ 238

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STOCK COMPENSATION PLANS (Detail Textuals 1) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	Feb. 28, 2015	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
2008 Recognition and Retention Plan ("2008 RRP")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares purchased by RRP trust				213,528
Value of shares purchased in open market by RRP trust				$ 2,500,000
Average price per share of common stock purchased in the open market		$ 11.49		$ 11.49
Number of forfeit shares exceptional for award				6,262
Percentage of vesting per year				20.00%
Vesting period of awards granted				5 years
2014 Stock Incentive Plan | Restricted stock awards or units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of forfeit shares exceptional for award	30,500
Maximum number of shares awarded under the plan	285,655
Number of shares granted	235,500
2008 RRP and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense		$ 115,000	$ 84,000	$ 243,000	$ 105,000
Tax benefit (expense) from stock-based compensation		$ 39,000,000	$ 29,000,000	$ 83,000,000	$ 36,000,000

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STOCK COMPENSATION PLANS (Detail Textuals 2) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Feb. 28, 2015	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2010	Sep. 30, 2009
2008 Stock Option Plan (the "2008 Option Plan") | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage of vesting and exercisable per year				20.00%
Vesting period of options				5 years
Exercisable period of options after grant date				10 years
Number of common stock available for issuance		533,808		533,808
Number of vested options				442,155
Number of shares forfeited				7,932
Weighted average remaining contractual term for options outstanding				6 years 6 months
Estimated fair value of options granted per share						$ 4.58	$ 4.67	$ 3.34	$ 2.92	$ 2.98
Fair value, valuation method				Black-Scholes pricing model
Exercise price and fair value		$ 12.23		$ 12.23
Expected term				7 years
Volatility rate				38.16%
Expected interest rate				1.62%
Expected yield				0.98%
Unrecognized compensation expense for options		$ 2,100,000		$ 2,100,000
Weighted average period for expense recognize				3 years 10 months 24 days
2014 Stock Incentive Plan | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares for issuance pursuant to options		714,145		714,145
Number of shares purchased for award	587,112			608,737
Number of shares forfeited				78,000
2008 RRP and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense		$ 115,000	$ 84,000	$ 243,000	$ 105,000
Tax benefit from stock-based compensation		39,000	29,000	83,000	36,000
Unrecognized compensation expense for options		2,500,000	3,000,000	2,500,000	3,000,000
2008 Option Plan and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense		112,000	86,000	248,000	111,000
Tax benefit from stock-based compensation		$ 13,000	$ 9,000	$ 29,000	$ 12,000

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COMMITMENTS AND CONTINGENT LIABILITIES (Detail Textuals) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2016	Sep. 30, 2015
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 49,000
Loans Receivable
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Aggregate undisbursed portion of loans-in-process	12,838,000	$ 17,097,000
Loan Origination Commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	23,000,000	2,500,000
Aggregate undisbursed portion of loans-in-process	$ 12,800,000	$ 17,000,000
Loan Origination Commitments | Minimum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	5.50%	4.25%
Loan Origination Commitments | Maximum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	3.75%	5.25%
Unused lines of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 3,400,000	$ 6,100,000
Letters of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 2,900,000	$ 2,600,000

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FAIR VALUE MEASUREMENT - Assets measured at fair value on recurring basis (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 143,235	$ 77,483
U.S. Government and agency obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	18,974	18,712
Mortgage-backed securities - U.S. Government agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	104,581	58,712
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	19,644
FHLMC preferred stock
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	36	59
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	36	59
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 143,199	$ 77,424
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 18,974	$ 18,712
Fair Value, Measurements, Recurring | U.S. Government and agency obligations | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | Mortgage-backed securities - U.S. Government agencies | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | Mortgage-backed securities - U.S. Government agencies | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 104,581	$ 58,712
Fair Value, Measurements, Recurring | Mortgage-backed securities - U.S. Government agencies | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | Corporate bonds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | Corporate bonds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 19,644
Fair Value, Measurements, Recurring | Corporate bonds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | FHLMC preferred stock | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale	$ 36	$ 59
Fair Value, Measurements, Recurring | FHLMC preferred stock | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale
Fair Value, Measurements, Recurring | FHLMC preferred stock | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investment and mortgage-backed securities available for sale

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FAIR VALUE MEASUREMENT - Changes in level 3 assets measured at fair value (Details 1) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 18,975	$ 16,770
Real estate owned		869
Total	$ 18,975	$ 17,639
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Real estate owned
Total
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans
Real estate owned		$ 869
Total		869
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 18,975	$ 16,770
Real estate owned
Total	$ 18,975	$ 16,770

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FAIR VALUE MEASUREMENT - Valuation processes used to determine nonrecurring fair value measurements categorized within level 3 (Details 2) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands		6 Months Ended	12 Months Ended
		Mar. 31, 2016	Sep. 30, 2015
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		$ 18,975	$ 17,639
Level 3
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		18,975	16,770
Level 3 | Impaired loan | Property Appraisals Valuation Technique
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		$ 18,975	$ 16,770
Valuation Technique	[1],[2]	Property appraisals	Property appraisals
Unobservable Input	[3]	Management discount for selling costs, property type and market volatility	Management discount for selling costs, property type and market volatility
Management discount rate		10.00%	10.00%
Level 3 | Real estate owned | Property Appraisals Valuation Technique
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value			$ 869
Valuation Technique	[1],[2]		Property appraisals
Unobservable Input	[3]		Management discount for selling costs, property type and market volatility
Management discount rate			10.00%

[1] Fair value is generally determined through independent appraisals of the underlying collateral, which generally includes various Level 3 inputs, which are not identifiable.

[2] Includes qualitative adjustments by management and estimated liquidation expenses.

[3] Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses. The range and weighted average of liquidation expenses and other appraisal adjustments are presented as a percent of the appraisal.

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FAIR VALUE MEASUREMENT - Assets measured at fair value on a non-recurring basis and the adjustments to the carrying value (Details 3) - USD ($) $ in Thousands	Mar. 31, 2016	Sep. 30, 2015	Mar. 31, 2015	Sep. 30, 2014
Assets:
Cash and cash equivalents	$ 7,330	$ 11,272	$ 27,422	$ 45,382
Investment and mortgage-backed securities available for sale	143,235	77,483
Investment and mortgage-backed securities held to maturity	44,488	66,384
Loans receivable, net	322,182	312,633
Accrued interest receivable	1,774	1,665
Federal Home Loan Bank stock	1,851	369
Bank owned life insurance	12,890	12,722
Liabilities:
Checking accounts	38,776	37,942
Money market deposit accounts	57,470	60,736
Passbook, club and statement savings accounts	69,999	70,355
Certificates of deposit	217,825	196,041
Advances from Federal Home Loan Bank	37,059
Accrued interest payable	543	1,291
Advances from borrowers for taxes and insurance	1,777	1,670
Fair Value
Assets:
Cash and cash equivalents	7,330	11,272
Investment and mortgage-backed securities available for sale	143,235	77,483
Investment and mortgage-backed securities held to maturity	45,591	66,877
Loans receivable, net	322,200	312,613
Accrued interest receivable	1,774	1,665
Federal Home Loan Bank stock	1,851	369
Bank owned life insurance	12,890	12,722
Liabilities:
Checking accounts	38,776	37,942
Money market deposit accounts	57,470	60,736
Passbook, club and statement savings accounts	69,999	70,355
Certificates of deposit	220,340	199,639
Advances from Federal Home Loan Bank	37,096
Accrued interest payable	543	1,291
Advances from borrowers for taxes and insurance	1,777	1,670
Level 1
Assets:
Cash and cash equivalents	7,330	11,272
Investment and mortgage-backed securities available for sale	$ 36	$ 59
Investment and mortgage-backed securities held to maturity
Loans receivable, net
Accrued interest receivable	$ 1,774	$ 1,665
Federal Home Loan Bank stock	1,851	369
Bank owned life insurance	12,890	12,722
Liabilities:
Checking accounts	38,776	37,942
Money market deposit accounts	57,470	60,736
Passbook, club and statement savings accounts	$ 69,999	$ 70,355
Certificates of deposit
Advances from Federal Home Loan Bank
Accrued interest payable	$ 543	$ 1,291
Advances from borrowers for taxes and insurance	$ 1,777	$ 1,670
Level 2
Assets:
Cash and cash equivalents
Investment and mortgage-backed securities available for sale	$ 143,199	$ 77,424
Investment and mortgage-backed securities held to maturity	$ 45,591	$ 66,877
Loans receivable, net
Accrued interest receivable
Federal Home Loan Bank stock
Bank owned life insurance
Liabilities:
Checking accounts
Money market deposit accounts
Passbook, club and statement savings accounts
Certificates of deposit
Advances from Federal Home Loan Bank
Accrued interest payable
Advances from borrowers for taxes and insurance
Level 3
Assets:
Cash and cash equivalents
Investment and mortgage-backed securities available for sale
Investment and mortgage-backed securities held to maturity
Loans receivable, net	$ 322,200	$ 312,613
Accrued interest receivable
Federal Home Loan Bank stock
Bank owned life insurance
Liabilities:
Checking accounts
Money market deposit accounts
Passbook, club and statement savings accounts
Certificates of deposit	$ 220,340	$ 199,639
Advances from Federal Home Loan Bank	$ 37,096
Accrued interest payable
Advances from borrowers for taxes and insurance

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FAIR VALUE MEASUREMENT (Detail Textuals) $ in Millions	Mar. 31, 2016 USD ($)
Level 2
Financing Receivable, Impaired [Line Items]
Collateral dependent impaired loans, fair value	$ 19.0