CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

12 Months Ended

Sep. 30, 2024

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS [Abstract]

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

CAPITAL REQUIREMENTS AND RESTRICTIONS ON RETAINED EARNINGS

The Company and the Bank are required to comply with the regulatory capital rules administered by federal banking agencies (the "Capital Rules"). Under the Capital Rules and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

The Capital Rules require the Company and the Bank to maintain minimum ratios (set forth in the table below) of total risk-based capital and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and a leverage ratio consisting of Tier 1 capital (as defined) to average assets (as defined). At September 30, 2024, the Company and the Bank exceeded federal regulatory minimum capital requirements to be classified as well-capitalized under the prompt corrective action requirements. The Company and the Bank took the AOCI opt-out election; under the rule, non-advanced approach banking organizations were given a one-time option to exclude certain AOCI components. 

The table below includes certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity.

	Company		Bank		Minimum to be Adequately Capitalized Under Prompt Corrective Action Provisions		Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
At September 30, 2024
Tier 1 leverage capital ratio	9.26	%	9.44	%	4.00	%	5.00	%
Common equity Tier 1 capital ratio	12.61		13.12		4.50		6.50
Tier 1 capital ratio	12.86		13.12		6.00		8.00
Total capital ratio	14.08		13.97		8.00		10.00
At September 30, 2023
Tier 1 leverage capital ratio	8.11	%	8.32	%	4.00	%	5.00	%
Common equity Tier 1 capital ratio	11.25		11.81		4.50		6.50
Tier 1 capital ratio	11.50		11.81		6.00		8.00
Total capital ratio	12.84		12.76		8.00		10.00

The following table provides a reconciliation of the amounts included in the table above for the Company.

	Standardized Approach(1)
(Dollars in thousands)	September 30, 2024		September 30, 2023
Total stockholders' equity	$	839,605	$	650,625
Adjustments:
LESS: Goodwill, net of associated deferred tax liabilities	296,105		297,679
LESS: Certain other intangible assets	18,018		21,228
LESS: Net deferred tax assets from operating loss and tax credit carry-forwards	13,253		19,679
LESS: Net unrealized (losses) on available for sale securities	(152,328)		(254,294)
LESS: Noncontrolling interest	(277)		(1,005)
ADD: Adoption of Accounting Standards Update 2016-13	1,345		2,017
Common Equity Tier 1(1)	666,179		569,355
Long-term borrowings and other instruments qualifying as Tier 1	13,661		13,661
Tier 1 minority interest not included in common equity Tier 1 capital	(150)		(826)
Total Tier 1 capital	679,690		582,190
Allowance for credit losses	44,687		47,960
Subordinated debentures, net of issuance costs	19,693		19,591
Total capital	$	774,070	$	649,741
(1) Capital ratios were determined using the Basel III capital rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum common equity tier 1 capital ratio; those changes were fully phased in through the end of 2021.

The Company and the Bank are required to maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. The capital conservation buffer is exclusively composed of Common Equity Tier 1 capital, and it applies to each of the three risk-based capital ratios but not the leverage ratio. The required Common Equity Tier 1 risk-based, Tier 1 risk-based and total risk-based capital ratios with the buffer are currently 7.0%, 8.5% and 10.5%, respectively.

Based on current and expected continued profitability and subject to continued access to capital markets, we believe that the Company and the Bank will continue to meet the capital conservation buffer of 2.5% in addition to required minimum capital ratios.