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 June 30, 2017
	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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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 July 31, 2017, 10,819,006 shares were issued and 9,007,742 were outstanding.

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION:
Item 1.	Consolidated Financial Statements	1
	Unaudited Consolidated Statements of Financial Condition June 30, 2017 and September 30, 2016	2
	Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended June 30, 2017 and 2016	3
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for for the Three and Nine Months Ended June 30, 2017 and 2016	4
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended June 30, 2017 and 2016	5
	Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2017 and 2016	6
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	49
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	63
Item 4.	Controls and Procedures	63
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	64
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	65
Item 3.	Defaults Upon Senior Securities	65
Item 4.	Mine Safety Disclosures	65
Item 5.	Other Information	66
Item 6.	Exhibits	66
SIGNATURES		66

1

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	June 30,			September 30,
	2017			2016
	(Dollars in Thousands, except share data)
ASSETS
Cash and amounts due from depository institutions	$	2,182		$	1,965
Interest-bearing deposits		20,745			10,475
Total cash and cash equivalents		22,927			12,440
Certificates of deposit		1,853			1,853
Investment and mortgage-backed securities available for sale (amortized cost— June 30, 2017, $184,980; September 30, 2016, $137,222)		183,439			138,694
Investment and mortgage-backed securities held to maturity (fair value— June 30, 2017, $58,570; September 30, 2016, $40,700)		59,654			39,971
Loans receivable—net of allowance for loan losses (June 30, 2017, $4,058; September 30, 2016, $3,269)		544,422			344,948
Accrued interest receivable		3,089			1,928
Real estate owned		192			581
Federal Home Loan Bank stock—at cost		5,767			2,463
Office properties and equipment—net		8,076			1,344
Bank owned life insurance		27,877			13,055
Prepaid expenses and other assets		5,497			2,203
Goodwill		7,163			-
Intangible assets		747			-
TOTAL ASSETS	$	870,703		$	559,480
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	9,569		$	3,804
Interest-bearing		605,277			385,397
Total deposits		614,846			389,201
Advances from Federal Home Loan Bank (short-term)		20,000			20,000
Advances from Federal Home Loan Bank (long-term)		88,078			30,638
Accrued interest payable		1,339			1,403
Advances from borrowers for taxes and insurance		3,982			1,748
Accounts payable and accrued expenses		8,262			2,488
Total liabilities		736,507			445,478
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued		-			-
Common stock, $.01 par value, 40,000,000 shares authorized; 10,819,006 and 9,544,809 issued and 9,007,742 and 8,045,544 outstanding at June 30, 2017 and September 30, 2016, respectively		108			95
Additional paid-in capital		118,480			95,713
Unearned Employee Stock Ownership Plan (ESOP) shares		-			(4,550	)
Treasury stock, at cost: 1,811,264 shares at June 30, 2017 and and 1,499,265 shares at September 30, 2016		(26,692	)		(21,098	)
Retained earnings		42,987			43,044
Accumulated other comprehensive (loss) income		(687	)		798
Total stockholders' equity		134,196			114,002
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	870,703		$	559,480

See notes to unaudited consolidated financial statements.

2

PRUDENTIAL bancorp, inc. and subsidiarIES UNAUDITED

CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended June 30,					Nine Months Ended June 30,
	2017		2016			2017			2016
	(Dollars in Thousands, Except Per Share Data)
INTEREST INCOME:
Interest on loans	$	5,647	$	3,263		$	14,062		$	9,489
Interest on mortgage-backed securities		802		673			2,179			1,868
Interest and dividends on investments		926		529			2,263			1,517
Interest on interest-bearing assets		55		9			102			22
Total interest income		7,430		4,474			18,606			12,896
INTEREST EXPENSE:
Interest on deposits		1,002		682			2,690			2,177
Interest on advances from Federal Home Loan Bank		375		142			918			296
Total interest expense		1,377		824			3,608			2,473
NET INTEREST INCOME		6,053		3,650			14,998			10,423
PROVISION FOR LOAN LOSSES		30		150			2,580			225
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		6,023		3,500			12,418			10,198
NON-INTEREST INCOME:
Fees and other service charges		179		142			472			371
Gain on sale of loans, net		3		-			52			2
Gain on the sale of investment securities (AFS)		70		161			70			161
Gain on the sale of OREO		-		-			-			58
Income from bank owned life insurance		229		83			506			251
Other		144		14			400			40
Total non-interest income		625		400			1,500			883
NON-INTEREST EXPENSE:
Salaries and employee benefits		1,884		1,684			5,593			5,071
Data processing		175		112			481			340
Professional services		230		230			1,018			750
Office occupancy		432		246			1,100			753
Director compensation		57		123			218			351
Deposit insurance premium		52		134			93			306
Advertising		92		17			158			55
Communications expense		104		42			211			121
Furniture and fixtures		81		58			252			171
Merger-related expense		-		-			2,663			-
Intangible asset amortization		37		-			75			-
Other		356		169			1,119			589
Total non-interest expense		3,500		2,815			12,981			8,507
INCOME BEFORE INCOME TAXES		3,148		1,085			937			2,574
INCOME TAXES:
Current expense		941		410			769			807
Deferred expense (benefit)		90		(102	)		(539	)		29
Total income tax expense		1,031		308			230			836
NET INCOME	$	2,117	$	777		$	707		$	1,738
BASIC EARNINGS PER SHARE	$	0.25	$	0.10		$	0.08		$	0.23
DILUTED EARNINGS PER SHARE	$	0.25	$	0.10		$	0.08		$	0.23
DIVIDENDS PER SHARE	$	0.03	$	0.03		$	0.09		$	0.09

See notes to unaudited consolidated financial statements.

3

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

	Three months ended June 30,						Nine months ended June 30,
	2017			2016			2017			2016
	(Dollars in Thousands)
Net income	$	2,117		$	777		$	707		$	1,738
Unrealized holding gains (losses) on available-for-sale securities		1,120			744			(2,881	)		1,897
Tax effect		(381	)		(257	)		979			(645	)
Reclassification adjustment for net security gains realized in net income		(70	)		(161	)		(70	)		(161	)
Tax effect		24			55			24			55
Unrealized holding (losses) gains on interest rate swaps		(91	)		(351	)		701			(351	)
Tax effect		31			119			(238	)		119
Total other comprehensive income (loss)		633			149			(1,485	)		914
Comprehensive income (loss)	$	2,750		$	926		$	(778	)	$	2,652

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, 2016	$	95	$	95,713		$	(4,550	)	$	(21,098	)	$	43,044		$	798		$	114,002
Net income													707						707
Other comprehensive loss																(1,485	)		(1,485	)
Dividends paid ($0.09 per share)													(764	)					(764	)
Issuance of common stock (1,274,197 shares)		13		21,801															21,814
Purchase of treasury stock (43,698 shares)										(1,058	)								(1,058	)
Terminate ESOP (303,115 shares)				733			4,456			(5,189	)								-
Treasury stock used for Recognition and Retention Plan (34,814 shares)				(653	)					653									-
Tax benefit from stock compensation plans				195															195
Stock option expense				349															349
Recognition and Retention Plan expense				284															284
ESOP shares committed to be released (8,879 shares)				58			94												152
BALANCE, June 30, 2017	$	108	$	118,480		$	-		$	(26,692	)	$	42,987		$	(687	)	$	134,196

															Accumulated
			Additional			Unearned									Other		Total
	Common		Paid-In			ESOP			Treasury			Retained			Comprehensive		Stockholders'
	Stock		Capital			Shares			Stock			Earnings			Income		Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, Octoober 1, 2015	$	95	$	95,286		$	(4,926	)	$	(14,691	)	$	41,219		$	18	$	117,001
Net income													1,738					1,738
Other comprehensive income																914		914
Dividends paid ($0.09 per share)													(694	)				(694	)
Tax benefit from stock compensation plans				156														156
Purchase of treasury stock (520,546 shares)										(7,824	)							(7,824	)
Issuance of treasury stock (74,665 shares)										862								862
Treasury stock used for Recognition and Retention Plan (41,800 shares issued)				(640	)					640								-
Stock option expense				278														278
Recognition and Retention Plan expense				251														251
ESOP shares committed to be released (26,649 shares)				102			282											384
BALANCE, June 30, 2016	$	95	$	95,433		$	(4,644	)	$	(21,013	)	$	42,263		$	932	$	113,066

See notes to unaudited consolidated financial statements.

5

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended June 30,
	2017			2016
OPERATING ACTIVITIES:	(Dollars in Thousands)
Net income	$	707		$	1,738
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation		399			242
Net amortization of premiums/discounts		575			11
Provision for loan losses		2,580			225
Net amortization of deferred loan fees and costs		81			172
Share-based compensation expense for stock options and awards		633			529
Income from bank owned life insurance		(506	)		(251	)
Gain from sale of loans held for sale		(52	)		(2	)
Gain from sale of investment securities		(70	)		(161	)
Gain on sale of other real estate owned		(60	)		(58	)
Originations of loans held for sale		(2,634	)		(450	)
Proceeds from sale of loans held for sale		2,686			452
Compensation expense of ESOP		139			384
Deferred income tax (expense) benefit		(539	)		29
Changes in assets and liabilities which used cash:
Accrued interest receivable		(1,161	)		(98	)
Prepaid expenses and other assets		4,846			(898	)
Accrued interest payable		(64	)		(276	)
Accounts payable and accrued expenses		(3,140	)		420
Net cash provided by operating activities		4,420			2,008
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale		(56,970	)		(67,815	)
Purchase of corporate bonds available for sale		(11,714	)		(20,466	)
Purchase of municipal bonds held to maturity		(18,847	)		-
Loans originated		(160,085	)		(59,918	)
Principal collected on loans		118,107			29,488
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity		861			3,748
Available-for-sale		8,131			50,962
Proceeds from the sale of investments and mortgage-backed securities AFS		10,593			25,161
Proceeds from the sale of Polonia Bancorp Inc.'s investment portfolio acquired		42,164			-
Redemption of FHLB Stock		163			-
Purchase of FHLB stock		(67	)		(2,018	)
Proceeds from sale of real estate owned		449			927
Acquisition, net of cash		28,956			-
Purchase of BOLI		(10,000	)		-
Purchases of equipment		(229	)		(169	)
Net cash used in investing activities		(48,488	)		(40,100	)
FINANCING ACTIVITIES:
Net decrease increase in demand deposits, NOW accounts, and savings accounts		(12,686	)		(4,411	)
Net increase in certificates of deposit		66,088			25,977
Proceeds from FHLB advances		9,729			51,999
Repayment of FHLB advances long-term		(9,521	)		(1,772	)
Increase in advances from borrowers for taxes and insurance		2,234			1,099
Cash dividends paid		(764	)		(694	)
Release unallocated shares from ESOP Plan		4,550			-
Repayment of remaining principal balance of ESOP Loan		(734	)		-
Issuance of treasury stock		-			1,502
Purchase of treasury stock		(4,536	)		(8,464	)
Tax benefit related to stock compensation plans		195			156
Net cash provided by financing activities		54,555			65,392

6

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS -continued

	Nine Months Ended June 30.
	2017			2016
NET INCREASE IN CASH AND CASH EQUIVALENTS		10,487			27,300
CASH AND CASH EQUIVALENTS—Beginning of period		12,440			11,272
CASH AND CASH EQUIVALENTS—End of period	$	22,927		$	38,572
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid on deposits and advances from FHLB	$	2,842		$	2,749
Income taxes paid		980			450
SUPPLEMENTAL DISCLOSURES OF NONCASH FLOW
Real estate acquired in settlement of of loans		-			207
Acquisition of noncash assets and liabilities
Assets acquired:
Investment securities	$	42,164
Loans		160,157
Premises		6,902
Core deposit intangible		822
Goodwill		7,163
Bank owned life insurance		4,318
Other assets		2,558
Total assets	$	224,084
Liabilities assumed:
Deposits	$	172,243
Advances		57,232
Other liabilities		8,914
Total liabilities assumed	$	238,389
Net non-cash assets (liabilities) acquired		(14,305	)
Cash acquired	$	47,901

See notes to the unaudited consolidated financial statements

7

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 Bank (the “Bank”). The Company 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 (which includes a financial center), administrative office, and 10 full-service financial centers. Nine of the branch offices are located in Philadelphia (Philadelphia County), one is in Drexel Hill, Delaware County, and one is in Huntingdon Valley, Montgomery County (both Pennsylvania counties). The Bank maintains ATMs at all 11 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, the Company is subject to the regulation of the Board of Governors of the Federal Reserve System.

As of January 1, 2017, the Company completed its acquisition of Polonia Bancorp, Inc. (“Polonia Bancorp”) and Polonia Bank, Polonia’s wholly owned subsidiary. Polonia Bancorp and Polonia Bank were merged with and into the Company and the Bank, respectively.

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 nine months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

Use of Estimates in the Preparation of 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, goodwill and intangible assets, 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 at such date 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.

8

Dividends with respect to non-vested share awards granted pursuant to the Company’s 2008 Recognition and Retention Plan (“2008 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 will not receive any dividends declared on the common stock subject to the award prior to the date the shares are 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 nine month period ended June 30, 2017, the Company repurchased 303,115 shares of common stock of unallocated shares held in a suspense account by the Bank’s ESOP as collateral with an aggregate value of $5.2 million in order to payoff the associated loans that were terminated as of December 31, 2016 in connection with the termination of the Bank’s ESOP. In addition, 42,791 shares of common stock were purchased in conjunction with the termination of the Polonia Bank ESOP as a result of the acquisition. The remaining shares purchased were related to the Company buying shares for the benefit of the employee stock benefits plans.

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 June 30, 2017.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The ASU’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 ASU specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This ASU was to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period; the effective date was deferred by a year discussed below. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606.  However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

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 ASU 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 ASU (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 ASU 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 ASU 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 ASU 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 and/or results of operations.

9

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. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1 percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this ASU apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The standards in this ASU 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 ASU 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 August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

10

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), which requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. Consequently, the amendments in this ASU eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those annual reporting periods. For all other entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual periods beginning after December 15, 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. That is, earlier adoption should be in the first interim period if an entity issues interim financial statements. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to the amount of retained earnings as of the beginning of the period of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), which amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screening process requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this ASU to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this ASU should be applied prospectively on or after the effective date. This ASU is not expected to have a significant impact on the Company’s financial statements.

11

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. This ASU is not expected to have a significant impact on the Company’s financial statements.

In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). The amendments in this Update clarify what constitutes a financial asset within the scope of Subtopic 610-20. The amendments also clarify that entities should identify each distinct nonfinancial asset or in-substance nonfinancial asset that is promised to a counterparty and to derecognize each asset when the counterparty obtains control. There is also additional guidance provided for partial sales of a nonfinancial asset and when derecognition, and the related gain or loss, should be recognized. The amendments in this Update are effective at the same time as the amendments in Update 2014-09. Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of this standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. 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 July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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2. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income 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 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, consisting of restricted stock and stock options 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 June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	2,117	$	2,117	$	777	$	777
Weighted average shares outstanding		8,652,699		8,652,699		7,330,386		7,330,386
Effect of common stock equivalents		-		656,370		-		200,986
Adjusted weighted average shares used in earnings  per share computation		8,652,699		9,309,069		7,330,386		7,531,372
Earnings per share - basic and diluted	$	0.25	$	0.25	$	0.10	$	0.10

	Nine Months Ended June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	707	$	707	$	1,738	$	1,738
Weighted average shares outstanding		8,202,850		8,202,850		7,442,956		7,442,956
Effect of common stock equivalents		-		570,792		-		210,125
Adjusted weighted average shares used in earnings per share computation		8,202,850		8,773,642		7,442,956		7,653,081
Earnings per share - basic and diluted	$	0.08	$	0.08	$	0.23	$	0.23

All exercisable stock options outstanding as of June 30, 2017 and 2016 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 June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	(1,320	)	$	783
Unrealized gains on available for sale securities		693			255
Unrealized losses on interest rate swaps		(60	)		(106	)
Total other comprehensive income		633			149
Ending Balance	$	(687	)	$	932

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

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

	Nine Months Ended June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	798		$	18
Unrealized (loss) gains on available for sale securities		(1,948	)		1,020
Unrealized gains (losses) on interest rate swaps.		463			(106	)
Total other comprehensive income (loss)		(1,485	)		914
Ending Balance	$	(687	)	$	932

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

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	Three Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income

	Nine Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income 

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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:

	June 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,989	$	-	$	(369	)	$	20,620
Mortgage-backed securities - U.S. government agencies		126,912		152		(1,349	)		125,715
Corporate bonds		37,073		271		(299	)		37,045
Total debt securities available for sale		184,974		423		(2,017	)		183,380
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	184,980	$	476	$	(2,017	)	$	183,439
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	236	$	(1,735	)	$	32,001
Mortgage-backed securities - U.S. government agencies		7,387		347		(29	)		7,705
Municipal bonds		18,767		184		(87	)		18,864
Total securities held to maturity	$	59,654	$	767	$	(1,851	)	$	58,570

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	September 30, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,988	$	36	$	-		$	21,024
Mortgage-backed securities - U.S. government agencies		90,817		860		(102	)		91,575
Corporate bonds		25,411		661		(19	)		26,053
Total debt securities available for sale		137,216		1,557		(121	)		138,652
FHLMC preferred stock		6		36		-			42
Total securities available for sale	$	137,222	$	1,593	$	(121	)	$	138,694
Securities Held to Maturity:
U.S. government and agency obligations	$	33,499	$	399	$	(129	)	$	33,769
Mortgage-backed securities - U.S. government agencies		6,472		459		-			6,931
Total securities held to maturity	$	39,971	$	858	$	(129	)	$	40,700

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The following table shows the gross unrealized losses and related fair values of the Company’s investments and mortgage-backed securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at June 30, 2017:

	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	$	(369	)	$	20,620	$	-		$	-	$	(369	)	$	20,620
Mortgage-backed securities - agency		(1,129	)		81,547		(220	)		11,013		(1,349	)		92,560
Corporate bonds		(299	)		15,987		-			-		(299	)		15,987
Total securities available for sale	$	(1,797	)	$	118,154	$	(220	)	$	11,013	$	(2,017	)	$	129,167
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,735	)	$	28,765	$	-		$	-	$	(1,735	)	$	28,765
Mortgage-backed securities - agency		(29	)		1,216		-			-		(29	)		1,216
Municipal bonds		(87	)		5,836		-			-		(87	)		5,836
Total securities held to maturity	$	(1,851	)	$	35,817	$	-		$	-	$	(1,851	)	$	35,817
Total	$	(3,648	)	$	153,971	$	(220	)	$	11,013	$	(3,868	)	$	164,984

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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, 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:
Mortgage-backed securities - agency	$	(50	)	$	16,498	$	(52	)	$	6,718	$	(102	)	$	23,216
Corporate bonds		(19	)		3,955		-			-		(19	)		3,955
Total securities available for sale	$	(69	)	$	20,453	$	(52	)	$	6,718	$	(121	)	$	27,171
Securities Held to Maturity:
U.S. government and agency obligations	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total securities held to maturity	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total	$	(198	)	$	40,824	$	(52	)	$	6,718	$	(250	)	$	47,542

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 its 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).

For both the three and nine months ended June 30, 2017 and 2016, the Company did not record any credit losses on investment securities through earnings.

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U.S. Government and Agency Obligations - At June 30, 2017, there were 14 securities in a gross unrealized loss position for less than 12 months. 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 June 30, 2017.

Mortgage-Backed Securities – At June 30, 2017, there were 35 mortgage-backed securities in a gross unrealized loss position for less than 12 months, while there were nine securities in a gross unrealized loss position 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 June 30, 2017.

Corporate Bonds – At June 30, 2017, there were 15 securities in a gross unrealized loss for less than 12 months. These securities are backed by publicly traded companies and have an investment grade rating by one or more of the three following rating agencies (S&P, Moody’s or Fitch). As a result, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2017.

Municipal Bonds – At June 30, 2017, there were nine securities in a gross unrealized loss for less than 12 months. These securities are backed by local municipalities/school districts located in the Commonwealth of Pennsylvania and have an investment grade rating from one or more of the three following rating agencies (S&P, Moody’s or Fitch). As a result, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2017.

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.

	June 30, 2017
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	2,867	$	2,794	$	4,048	$	4,066
Due after five through ten years		20,583		20,661		18,748		18,872
Due after ten years		28,817		27,410		35,266		34,727
Total	$	52,267	$	50,865	$	58,062	$	57,665

During both the three and nine month periods ended June 30, 2017, the Company sold two mortgage-back securities with an aggregate amortized cost of $5.1 million at an recognized aggregate gain of $18,000 (pre-tax) and a corporate bond with an amortized cost of $5.2 million for a $52,000 (pre-tax) gain. During both three and nine month periods ended June 30, 2016, the Company sold five mortgage-back securities with an aggregate amortized cost of $11.0 million at a recognized aggregate gain of $153,000 (pre-tax). Also, during the same periods the Company had an aggregate of $11.0 million of agency securities called at the stated par value which was higher than the aggregated amortized cost and recorded a gain of $8,000.

21

During the both three and nine month periods ended June 30, 2017 and 2016, the Company did not pledge any investment securities as collateral for any of its FHLB advances.

5. LOANS RECEIVABLE

Loans receivable consist of the following:

	June 30,			September 30,
	2017			2016
	(Dollars in Thousands)
One-to-four family residential	$	354,338		$	233,531
Multi-family residential		16,913			12,478
Commercial real estate		129,846			79,859
Construction and land development		93,671			21,839
Commercial business		490			99
Leases		4,922			3,286
Consumer		1,995			799
Total loans		602,175			351,891
Undisbursed portion of loans-in-process		(50,792	)		(5,371	)
Deferred loan fees and (costs)		(2,903	)		1,697
Allowance for loan losses		(4,058	)		(3,269	)
Net loans	$	544,422		$	344,948

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 June 30, 2017:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,242		158		1,224		1,011		4		27		24		368		4,058
Total ending allowance balance	$	1,242	$	158	$	1,224	$	1,011	$	4	$	27	$	24	$	368	$	4,058
Loans:
Individually evaluated for impairment	$	6,679	$	323	$	2,377	$	8,713	$	-	$	-	$	-			$	18,092
Collectively evaluated for impairment		347,659		16,590		127,469		84,958		490		4,922		1,995				584,083
Total loans	$	354,338	$	16,913	$	129,846	$	93,671	$	490	$	4,922	$	1,995			$	602,175

22

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, 2016:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,627		137		859		316		1		21		10		298		3,269
Total ending allowance balance	$	1,627	$	137	$	859	$	316	$	1	$	21	$	10	$	298	$	3,269
Loans:
Individually evaluated for impairment	$	5,553	$	335	$	3,154	$	10,288	$	99	$	-	$	-			$	19,429
Collectively evaluated for impairment		227,978		12,143		76,705		11,551		-		3,286		799				332,462
Total loans	$	233,531	$	12,478	$	79,859	$	21,839	$	99	$	3,286	$	799			$	351,891

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction, multi-family, commercial real estate and commercial business loans, all loans and leases more than 90 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 June 30, 2017, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

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					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	$	-	$	-	$	6,679	$	6,679	$	6,908
Multi-family residential		-		-		323		323		323
Commercial real estate		-		-		2,377		2,377		2,377
Construction and land development		-		-		8,713		8,713		10,532
Total impaired loans	$	-	$	-	$	18,092	$	18,092	$	20,140

The following table presents impaired loans by class as of September 30, 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	$	-	$	-	$	5,553	$	5,553	$	5,869
Multi-family residential		-		-		335		335		335
Commercial real estate		-		-		3,154		3,154		3,154
Construction and land development		-		-		10,288		10,288		10,288
Commercial loans		-		-		99		99		99
Total impaired loans	$	-	$	-	$	19,429	$	19,429	$	19,745

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

24

	Three Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
		(Dollars in Thousands)
One-to-four family residential	$	5,965	$	12	$	34
Multi-family residential		326		6		-
Commercial real estate		2,801		6		-
Construction and land development		9,607		-		-
Total impaired loans	$	18,699	$	24	$	34

	Three Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,052	$	14	$	30
Multi-family residential		341		6		-
Commercial real estate		3,595		35		-
Construction and land development		9,808		-		-
Total impaired loans	$	18,796	$	55	$	30

	Nine Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,280	$	59	$	91
Multi-family residential		329		17		-
Commercial real estate		2,938		41		12
Construction and land development		10,399		-		-
Total impaired loans	$	18,946	$	117	$	103

25

	Nine Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,978	$	89	$	78
Multi-family residential		346		18		-
Commercial real estate		3,667		74		12
Construction and land development		9,432		-		62
Total impaired loans	$	18,423	$	181	$	152

Federal regulations and our loan 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 three aforementioned categories but possess weaknesses are required to be designated “special mention.”

The following tables present the classes of the loan portfolio in which a formal risk rating 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.

	June 30, 2017
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,645	$	1,951	$	3,596
Multi-family residential		16,590		-		323		16,913
Commercial real estate		126,656		1,458		1,732		129,846
Construction and land development		84,958		-		8,713		93,671
Commercial business		490		-		-		490
Total loans	$	228,694	$	3,103	$	12,719	$	244,516

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	September 30, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,681	$	1,212	$	2,893
Multi-family residential		12,144		-		334		12,478
Commercial real estate		76,185		943		2,731		79,859
Construction and land development		11,551		-		10,288		21,839
Commercial business		99		-		-		99
Total loans	$	99,979	$	2,624	$	14,565	$	117,168

The Company evaluates the classification of one-to-four family residential, leases 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 or consumer loan, the loan is downgraded following the above definitions of special mention, substandard, doubtful and loss.

The following tables represent 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 tables are those loans greater than 90 days past due as to principal and/or interest that do not have a designated risk rating.

	June 30, 2017
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	344,967	$	5,775	$	350,742
Leases		4,922		-		4,922
Consumer		1,995		-		1,995
Total residential and consumer loans	$	351,884	$	5,775	$	357,659

	September 30, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	226,394	$	4,244	$	230,638
Leases		3,286		-		3,286
Consumer		799		-		799
Total residential and consumer loans	$	230,479	$	4,244	$	234,723

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:

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	June 30, 2017
							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	$	349,359	$	1,910	$	3,069	$	-	$	1,910	$	354,338	$	5,775
Multi-family residential		16,913		-		-		-		-		16,913
Commercial real estate		128,035		465		1,346		-		465		129,846		1,603
Construction and land development		84,958		-		8,714		-		-		93,671		8,714
Commercial business		490		-		-		-		-		490		-
Leases		4,922		-		-		-		-		4,922		-
Consumer		1,936		59		-		-		59		1,995		-
Total loans	$	586,613	$	2,434	$	13,129	$	-	$	2,434	$	602,175	$	16,092

	September 30, 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	$	228,904	$	1,860	$	2,767	$	-	$	1,860	$	233,531	$	4,244
Multi-family residential		12,478		-		-		-		-		12,478		-
Commercial real estate		78,513		-		1,346		-		-		79,859		1,346
Construction and land development		11,551		-		10,288		-		-		21,839		10,288
Commercial business		99		-		-		-		-		99		-
Leases		3,286		-		-		-		-		3,286		-
Consumer		799		-		-		-		-		799		-
Total loans	$	335,630	$	1,860	$	14,401	$	-	$	1,860	$	351,891	$	15,878

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.

28

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 the sale of the properties, potentially reducing both the borrower’s ability to make required payments as well as reducing the value of the collateral properties. 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 to allow completion of the project. 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 tables summarize the primary segments of the allowance for loan losses. Activity in the allowance is presented for the both three and nine month periods ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial Business		Leases			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at March 31, 2017	$	1,350		$	122	$	862	$	1,035		$	-	$	28		$	135		$	364	$	3,896
Charge-offs		-			-		-		-			-		-			-			-		-
Recoveries		132			-		-		-			-		-			-			-		132
Provision		(241	)		36		362		(24	)		4		(1	)		(111	)		5		30
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27		$	24		$	369	$	4,058

	Nine Months Ended June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial business		Leases		Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2016	$	1,627		$	137	$	859	$	316		$	1	$	21	$	10		$	298	$	3,269
Charge-offs		(113	)		-		-		(1,819	)		-		-		(16	)		-		(1,948	)
Recoveries		157			-		-		-			-		-		-			-		157
Provision		(430	)		21		365		2,514			3		6		30			71		2,580
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27	$	24		$	369	$	4,058

29

	Three Months Ended June 30, 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 March 31, 2016	$	1,511		$	43	$	428	$	773	$	7	$	276	$	3,038
Charge-offs		-			-		-		-		-		-		-
Recoveries		81			-		-		-		-		-		81
Provision		(147	)		19		236		4		2		36		150
ALLL balance at June 30, 2016	$	1,445		$	62	$	664	$	777	$	9	$	312	$	3,269

	Nine Months Ended June 30, 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		93			-			32		-		-		-		125
Provision		(272	)		(4	)		401		53		4		43		225
ALLL balance at June 30, 2016	$	1,445		$	62		$	664	$	777	$	9	$	312	$	3,269

The Company recorded a provision for loan losses in the amount of $30,000 and $2.6 million, respectively, for the three and nine months ended June 30, 2017. The level of the provision for loan losses for the nine months ended June 30, 2017 was primarily due to a $1.9 million charge-off related to a borrower (discussed below) whose primary project financed currently by the Bank involves the proposed development of 169 residential lots. The Bank and the borrower are in litigation and no resolution of the situation has been arrived at as of June 30, 2017 hereof in part due to the bankruptcy filing by the borrower effected in June 2017. In light of the status of both the litigation as well as the progress of construction of the project, the Company recorded a $1.9 million non-cash charge-off during the quarter ended March 31, 2017. The remaining portion of the provision recorded during the nine-months ended June 30, 2017 was related to an increase in the outstanding balance of loans. For both the three and nine month period ended June 30, 2017, the provision allocation was effected due to the increased balance of commercial real estate loans which generally have a slightly higher level of inherent risk, compared to single-family residential loans. The loans acquired from Polonia Bancorp initially did not have any impact on the allowance for loan losses, because they were acquired at their fair value. Any write-downs to fair value were reflected in the one-time merger-related charge. In the event that the credit quality of any loans acquired from Polonia Bancorp credit should deteriorate in the future, additional provisions may be required.

30

At June 30, 2017, the Company had nine loans aggregating $6.1 million that were classified as troubled debt restructurings (“TDRs”). Three of such loans aggregating $4.9 million were designated non-performing as of June 30, 2017; one of such loans in the amount of $1.4 million has continued to make payments in accordance with the restructured terms, but management continues to have concerns over the borrower’s ability to make future payments and as a result has determined to not return the loan to performing status. The remaining two TDRs classified non-accrual totaling $3.5 million are a part of one of the Bank’s largest borrowing relationships totaling $8.9 million (after taking into account the $1.9 million write-down recognized during the quarter ending March 31, 2017). The primary project of the borrower is the subject of litigation between the Bank and the borrower and as a result, the project is currently not proceeding. The borrower has recently filed for bankruptcy under Chapter 11. The Company has removed the underlying litigation noted above between the borrower from state court to the federal bankruptcy court. The remaining six TDRs have performed in accordance with the terms of their revised agreements and have been placed on accruing status. As of June 30, 2017, the Company had reviewed $18.1 million of loans for possible impairment of which $12.7 million was classified substandard compared to $19.4 million reviewed for possible impairment and $14.6 million of which was classified substandard as of September 30, 2016.

6. DEPOSITS

Deposits consist of the following major classifications:

	June 30,					September 30,
	2017					2016
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	81,211		13.2	%	$	55,552		14.3	%
Interest-bearing checking accounts		54,574		8.9			34,984		9.3
Non interest-bearing checking accounts		9,569		1.6			3,804		0.7
Passbook, club and statement savings		104,446		17.0			70,924		18.2
Certificates maturing in six months or less		123,656		20.1			97,418		25.0
Certificates maturing in more than six months		241,390		39.2			126,519		32.5
Total	$	614,846		100.0	%	$	389,201		100.0	%

Certificates of $250,000 and over totaled $24.6 million as of June 30, 2017 and $17.0 million as of September 30, 2016.

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7. ADVANCES FROM FEDERAL HOME LOAN BANK

Short-Term

The following table reflects the outstanding balances and related information for short-term borrowings (less than one year) from the Federal Home Loan Bank of Pittsburgh, (“FHLB”).

	Three Months			Nine Months
	Ended			Ended
	June 30, 2017			June 30, 2017
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			21,667
Maximum month-end balance		20,000			35,000
Weight-average rate at period end		1.25	%		1.25	%
Weight-average rate during the period		1.12	%		0.80	%

	Three Months			Nine Months
	Ended			Ended
	June 30, 2016			June 30, 2016
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			20,000
Maximum month-end balance		20,000			20,000
Weight-average rate at period end		0.56	%		0.56	%
Weight-average rate during the period		0.56	%		0.56	%

As of June 30, 2017, $20.0 million of the outstanding balance is related to two $10.0 million 30 day FHLB advances associated with an interest rate swap contract with a weighted average effective cost of 117 basis points.

Average balances outstanding during the periods presented represent daily average balance and interest rates represent interest expense divided by the related average balance.

The Bank maintains borrowing facilities with the FHLB and Federal Reserve Bank of Philadelphia and the interest rate will be based on market rates that are available on the date of execution.

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Long-Term

Pursuant to collateral agreement with the FHLB, advances are secured by a blanket pledge of qualifying loans held by the Bank and qualifying fixed-income securities and FHLB stock. The long-term advances outstanding as of June 30, 2017 are as follows:

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate - Advances	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate - Amortizing	1-Dec-17		1,009		1.16	%	Not Applicable
Fixed Rate - Advances	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,045		2.53	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,031		2.13	%	Not Applicable
Fixed Rate - Advances	20-Jun-18		3,015		1.86	%	Not Applicable
Fixed Rate - Advances	25-Jun-18		3,022		2.09	%	Not Applicable
Fixed Rate - Advances	27-Aug-18		7,223		4.15	%	Not Applicable
Fixed Rate - Advances	15-Nov-18		3,017		1.89	%	Not Applicable
Fixed Rate - Advances	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate - Advances	26-Nov-18		2,010		1.81	%	Not Applicable
Fixed Rate - Advances	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate - Advances	16-Aug-19		3,063		2.66	%	Not Applicable
Fixed Rate - Advances	9-Oct-19		2,038		2.53	%	Not Applicable
Fixed Rate - Amortizing	18-Nov-19		3,363		1.53	%	Not Applicable
Fixed Rate - Advances	26-Nov-19		3,047		2.35	%	Not Applicable
Fixed Rate - Advances	22-Jun-20		3,068		2.60	%	Not Applicable
Fixed Rate - Advances	24-Jun-20		2,059		2.85	%	Not Applicable
Fixed Rate - Advances	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate - Advances	17-Aug-20		2,073		3.06	%	Not Applicable
Fixed Rate - Advances	9-Oct-20		2,066		2.92	%	Not Applicable
Fixed Rate - Advances	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate - Advances	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate - Advances	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate - Advances	19-Aug-21		249		1.55	%	Not Applicable
Fixed Rate - Advances	7-Oct-21		2,095		3.19	%	Not Applicable
Fixed Rate - Advances	12-Oct-21		2,089		3.23	%	Not Applicable
Fixed Rate - Advances	6-Jun-22		10,000		2.05	%	Not Applicable
		$	88,078		2.19	%	(a)

(a) Weighted average coupon rate.

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The long-term advances outstanding as of September 30, 2016 are as follows:

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate -Advance	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		2,511		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		4,382		1.53	%	Not Applicable
Fixed Rate -Advance	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate -Advance	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate -Advance	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate -Advance	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate -Advance	19-Aug-21		249		1.55	%	Not Applicable
		$	30,638		1.34	%	(a)
(a) Weighted average coupon rate.

8. DERIVATIVES

The Company has contracted with a third party to participate in pay-fixed interest rate swap contracts. The amount of swaps outstanding at June 30, 2017 is being utilized to hedge $20. million in floating-rate debt consisting solely of FHLB advances.

Below is a summary of the interest rate swap agreements and the terms there of as of June 30, 2017.

	June 30, 2017
	Notional		Pay			Receive	Maturity	Unrealized
	Amount		Rate			Rate	Date	Gain
	(Dollars in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	214
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		221
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		64
								$	499

All three interest rate swaps are carried at fair value in accordance with FASB ASC 815 "Derivatives and Hedging."

Below is a summary of the interest rate swap agreements and the terms as of September 30, 2016. They are the same swap agreements that were in force as of June 30, 2017.

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	September 30, 2016
	Notinal Amount		Pay Rate			Receive Rate	Maturity Date	Unrealized Loss
						(Dollar in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	(92	)
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		(103	)
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		(7	)
								$	(202	)

All three interest swaps are carried at fair value in accordance with FASB ASC 815 “Derivatives and Hedging.”

9. INCOME TAXES

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

	June 30,			September 30,
	2017			2016
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,647		$	1,289
Nonaccrual interest		286			163
Accrued vacation		12			13
Capital loss carryforward		387			378
Split dollar life insurance		18			18
Post-retirement benefits		97			96
Other real estate owned		3			-
Unrealized losses on available for sale securities		524			-
Goodwill		2,729			-
Purchase accounting (Polonia Bancorp)		935			-
Unrealized losses on interest rate swaps		-			69
Employee benefit plans		327			434
Total deferred tax assets		6,965			2,460
Valuation allowance		(387	)		(378	)
Total deferred tax assets, net of valuation allowance		6,578			2,082
Deferred tax liabilities:
Property		393			423
Unrealized gains on available for sale securities		-			500
Section 481(a) Adjustment		-			12
Unrealized gains on interest rate swaps		170			-
Deferred loan fees		534			578
Total deferred tax liabilities		1,097			1,513
Net deferred tax assets	$	5,481		$	569

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 fully 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 recognized over a five year period, resulting in the establishment of a valuation allowance for the carryforward period. The valuation allowance totaled $387,000 at June 30, 2017 and $378,000 at September 30, 2016.

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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, 2014 have been closed for purposes of examination by the Internal Revenue Service and the Pennsylvania Department of Revenue.

10. STOCK COMPENSATION PLANS

As of December 31, 2016, the Boards of Directors of the Company and the Bank voted to terminate the Bank’s employee stock ownership plan (“ESOP”) effective December 31, 2016. The Company has submitted the proper notices with the Internal Revenue Service and is awaiting receipt of a determination letter in connection with the termination of the ESOP before the final allocation is made to the individual participants. The Bank maintained the ESOP for substantially for the benefit all its full-time employees. The ESOP purchased 427,057 shares of common stock for an aggregate cost of approximately $4.5 million in fiscal 2005 in connection with the Bank’s mutual holding company reorganization. The ESOP purchased in connection with the second-step conversion of the Bank an additional 255,564 shares during December 2013 and an additional 30,100 shares at the beginning of 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 two 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 upon release differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. As of June 30, 2017, the ESOP held 394,156 shares of which a total of 243,734 shares were allocated to participants, 303,115 shares were used to payoff the remaining $5.2 million balance the two loans used to fund the ESOP plan and released an additional 35,517 shares as of December 31, 2016. For the nine months ended June 30, 2017 and 2016, the Company recognized $139,000 (which was recorded during the first quarter of the current period) and $384,000, respectively, in compensation expense related to the ESOP. In connection with the termination of the ESOP, the ESOP was required to repay the outstanding indebtness the collateral held in the suspense account. Approximately 115,000 unallocated shares will be allocated to eligible participants upon approval by the Internal Revenue Service.

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 2008 RRP purchased 213,528 shares of the Company’s common stock in the open market for an aggregating cost of approximately $2.5 million, at an average purchase price per share of $11.49. The Company made sufficient contributions to the 2008 RRP to fund these purchases. As of June 30, 2017, all the shares 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 of common stock can be awarded as restricted stock awards or units, of which 233,500 shares were awarded during February 2015 of which 53,462 shares have been forfeited as of June 30, 2017. In August 2016, the Company granted 7,473 shares under the 2008 RRP and 3,027 shares under the 2014 SIP. In March 2017, the Company granted 17,128 shares under the 2014 SIP.

36

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 nine months ended June 30, 2017, an aggregate of $149,000 and $430,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $51,000 and $146,000, was recognized for the three and nine months ended June 30, 2017, respectively. During the three and nine months ended June 30, 2016, $87,000 and $329,000 was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $30,000 and $112,000 was recognized for the three and nine months ended June 30, 2016. At June 30, 2017, approximately $1.2 million in additional compensation expense for shares awarded related to the 2008 RRP and 2014 SIP remained unrecognized. The weighted average period over which this expense will be recognized is approximately 3.1 years.

A summary of the Company’s non-vested stock award activity for the nine months ended June 30, 2017 and 2016 is presented in the following tables:

	Nine Months Ended June 30, 2017
	Number of Shares (1)			Weighted Average Grant Date Fair Value
Nonvested stock awards at October 1, 2016		172,788		$	12.03
Granted		17,128			17.43
Forfeited		-			-
Vested		(43,755	)		11.59
Nonvested stock awards at the June 30, 2017		146,161		$	12.78

	Nine Months Ended June 30, 2016
	Number of Shares			Weighted Average Grant Date Fair Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Granted		-			-
Forfeited		(30,180	)		11.55
Vested		(55,279	)		11.59
Nonvested stock awards at the June 30, 2016		155,969		$	11.83

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 of common stock were approved for future issuance pursuant to the 2008 Option Plan. As of June 30, 2017, all of the options had been awarded under the 2008 Option Plan. As of June 30, 2017, 467,758 options 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. During August 2016, the Company granted 18,866 shares under the 2008 Option Plan and 8,634 shares under the 2014 SIP. In March 2017, the Company granted 22,828 shares under the 2014 SIP. In May 2017, the Company granted 25,000 shares under the 2014 SIP.

37

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP for the nine months ended June 30, 2017 and 2016 are presented below:

	Nine Months Ended June 30, 2017
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2016		921,909		$	11.70
Granted		47,828			17.48
Exercised		(40,757	)		11.48
Forfeited		-			-
Outstanding at  June 30, 2017		928,980		$	11.85
Exercisable at June 30, 2017		552,435		$	11.43

	Nine Months Ended June 30, 2016
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(89,358	)		11.61
Forfeited		(80,476	)		11.52
Outstanding at June 30, 2016		904,596		$	11.99
Exercisable at June 30, 2016		489,679		$	11.45

The weighted average remaining contractual term was approximately 4.5 years for options outstanding as of June 30, 2017.

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, $4.58 for options granted during fiscal 2015, $2.13 for options granted during fiscal 2016, and $3.18 for options granted during fiscal 2017. 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 of 0.98%. The fair value for grants made in fiscal 2016 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $14.42, expected term of seven years, volatility of 13.82%, interest rate of 1.36% and a yield of 0.80%. The fair value for grants made in March and May 2017 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $17.43, expected term of seven years, volatility of 14.4%, interest rate of 2.22% and a yield of 0.69%.

38

During the three and nine months ended June 30, 2017, $139,000 and $397,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. A tax benefit of $17,000 and $49,000 was recognized for the three and nine months ended June 30, 2017, respectively. During the three and nine months ended June 30, 2016, $106,000 and $322,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. A tax benefit of $36,000 and $44,000, respectively, was recognized for the three and nine months ended June 30, 2016.

At June 30, 2017, there was approximately $1.5 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 3.2 years.

11. COMMITMENTS AND CONTINGENT LIABILITIES

At June 30, 2017, the Company had $34.7 million in outstanding commitments to originate fixed-rate and variable-rate loans with market interest rates ranging from 4.00% to 5.50%. At September 30, 2016, the Company had $9.9 million in outstanding commitments to originate fixed-rate loans with market interest rates ranging from 3.75% to 5.0%. The aggregate undisbursed portion of loans-in-process amounted to $50.8 million at June 30, 2017 and $5.4 million at September 30, 2016.

The Company also had commitments under unused lines of credit of $8.9 million as of June 30, 2017 and $3.3 million as of September 30, 2016 and letters of credit outstanding of $1.5 million as of June 30, 2017 and $1.9 million as of September 30, 2016.

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 June 30, 2017, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $1.8 million related to loans sold to the FHLB. This exposure is for the life of the related loans and payables, on our proportionate share, as actual losses are incurred. These loans are seasoned loans and remain performing.

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.

12. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2017 and September 30, 2016, 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.

39

Those assets as of June 30, 2017 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	$	-	$	20,620	$	-	$	20,620
Mortgage-backed securities - U.S. Government agencies		-		125,715		-		125,715
Corporate bonds		-		37,045		-		37,045
FHLMC preferred stock		59		-		-		59
Interest rate swap contracts		-		499		-		499
Total	$	59	$	183,879	$	-	$	183,938

Those assets as of September 30, 2016 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	$	-	$	21,024	$	-	$	21,024
Mortgage-backed securities - U.S. Government agencies		-		91,575		-		91,575
Corporate bonds		-		26,053		-		26,053
FHLMC preferred stock		42		-		-		42
Total	$	42	$	138,652	$	-	$	138,694
Liabilities:
Interest rate swap contracts	$	-	$	202	$	-	$	202
Total	$	-	$	202	$	-	$	202

40

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 (principle and interest) 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 $18.0 million as of June 30, 2017 and $19.4 million as of September 30, 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. As a result, 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 June 30, 2017
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,092	$	18,092
Real estate owned		-		-		192		192
Total	$	-	$	-	$	18,284	$	18,284

	At September 30, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	19,429	$	19,429
Real estate owned		-		-		581		581
Total	$	-	$	-	$	20,010	$	20,010

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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 June 30, 2017
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,092	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 10% discount/10%
Real estate owned	$	581	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	19,429	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 46% discount/10%
Real estate owned	$	581	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.

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					Fair Value Measurements at
					June 30, 2017
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	22,927	$	22,927	$	22,927	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		183,439		183,439		59		183,380		-
Investment and mortgage-backed securities held to maturity		59,654		58,570		-		58,570		-
Loans receivable, net		544,422		548,697		-		-		548,697
Accrued interest receivable		3,089		3,089		3,089		-		-
Other real estate owned		192		192		192		-		-
Federal Home Loan Bank stock		5,767		5,767		5,767		-		-
Bank owned life insurance		27,877		27,877		27,877		-		-
Interest rate swap contracts		499		499		-		499		-
Liabilities:
Checking accounts		64,143		64,143		64,143		-		-
Money market deposit accounts		81,211		81,211		81,211		-		-
Passbook, club and statement savings accounts		104,446		104,446		104,446		-		-
Certificates of deposit		365,046		360,527		-		-		360,527
Accrued interest payable		1,339		1,339		1,339		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		88,078		87,372		-		-		87,372
Advances from borrowers for taxes and insurance		3,982		3,982		3,982		-		-

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					Fair Value Measurements at
					September 30, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	12,440	$	12,440	$	12,440	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		138,694		138,694		42		138,652		-
Investment and mortgage-backed securities held to maturity		39,971		40,700		-		40,700		-
Loans receivable, net		344,948		344,100		-		-		344,100
Accrued interest receivable		1,928		1,928		1,928		-		-
Federal Home Loan Bank stock		2,463		2,463		2,463		-		-
Bank owned life insurance		13,055		13,055		13,055		-		-
Liabilities:
Checking accounts		38,788		38,788		38,788		-		-
Money market deposit accounts		55,552		55,552		55,552		-		-
Passbook, club and statement savings accounts		70,924		70,924		70,924		-		-
Certificates of deposit		223,937		225,383		-		-		225,383
Accrued interest payable		1,403		1,403		1,403		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		30,638		30,222		-		-		30,222
Advances from borrowers for taxes and insurance		1,748		1,748		1,748		-		-
Interest rate swap contracts		202		202		-		202		-

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.

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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.

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

Long-term 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.

Interest rate swaps – The fair values of the interest rate swap contracts are based upon the estimated amount the Company would receive or pay, as applicable, to terminate the contracts.

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.

13. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company’s goodwill and intangible assets are related to the acquisition of Polonia Bancorp on January 1, 2017.

	Balance							Balance
	October 1,		Additions/					June 30,		Amortization
	2016		Adjustments		Amortization			2017		Period
Goodwill	$	-	$	7,163	$	-		$	7,163
Core deposit intangible		-		822		(75	)		747	10 years
	$	-	$	7,985	$	(75	)	$	7,910

As of June 30, 2017, the current fiscal year and the future fiscal periods amortization expense for the core deposit intangible is:

(In thousands)
2017	$	37
2018		138
2019		123
2020		108
Thereafter		341

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14. BUSINESS COMBINATIONS

On January 1, 2017, the previously announced proposed acquisition (the “Merger”) of Polonia Bancorp pursuant to the Agreement of Plan of Merger by and between Polonia Bancorp and the Company, dated as of June 2, 2016 (the “ Merger Agreement”) was completed. The shareholders of Polonia Bancorp had the option to receive $11.09 per share in cash or 0.7460 of a share of the Company common stock for each share of Polonia Bancorp common stock held thereby, subject to allocation provisions to assure that, in the aggregate, Polonia Bancorp shareholders received total merger consideration that consisted of 50% stock and 50% cash. As a result of Polonia Bancorp shareholder stock and cash elections and the related proration provisions of the Merger Agreement, the Company issued 1,274,197 shares of its common stock and approximately $18.9 million was paid in cash for the Merger.

In connection with the Merger, the consideration paid and the estimated fair value of identifiable assets and liabilities assumed as of the date of the Merger are summarized in the following table:

(dollars in thousands)
Consideration paid:
Common stock issued (1,274,197 shares) at a fair value per share of $17.12 per share.	$	21,814
Cash for common stock exchanged		18,944
Cash in lieu of fractional shares		1
		40,759
Assets acquired:
Cash and due from banks		47,901
Investments available for sale		42,164
Loans		160,157
Premises and equipment		6,902
Deferred taxes		3,921
Bank-owned life insurance		4,316
Core deposit intangible		822
Other assets		5,802
Total assets		271,985
Liabilities assumed:
Deposits		172,243
FHLB advances, short-term		7,000
FHLB advances, long-term		50,232
Other liabilities		8,914
Total liabilities		238,389
Net assets acquired		33,596
Goodwill resulting from the acquisition	$	7,163

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The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed as of the date of acquisition of Polonia Bancorp. The core deposit intangible will be amortized over a 10 years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.

(Dollars in thousands, except per share data)
Purchase Consideration
Polonia Common Stock:
Total shares of common stock outstanding		3,416,311
Common stock issued cap		1,708,155
Shares redeemed for cash cap		1,708,156
Prudential common stock issued (conversion rate 0.7460)		1,274,197
Prudential closing price at December 31, 2016	$	17.12
Cash-out rate paid per share for Polonia Bancorp common stock	$	11.09
Purchase consideration assigned to Polonia Bancorp shares exchanged for Company Common Stock	$	21,814
Cash Paid to Polonia for Polonia Bancorp shares	$	18,944
Cash Paid for fractional shares	$	1
	$	40,759
Net Assets Acquired
Polonia Bancorp stockholders' equity		35,412
Core deposit intangible assets		822
Estimated adjustments to reflect assets acquired at fair value:
Investment securities		(781	)
Portfolio loans		(4,643	)
Allowance for loan and lease losses		1,002
Premises		3,049
Other Assets		(73	)
Deferred Taxes		934
Total fair value adjustment to assets acquired		310
Estimated adjustments to reflect liabilities assumed at fair value:
Time deposits		894
Borrowings		1,232
Total fair value adjustment to liabilities assumed		2,126
Total net assets acquired		33,596
Goodwill resulting from merger		7,163

Pro Forma Income Statements

The following pro forma income statements for the three and nine months ended June 30, 2017 and 2016 presents pro forma results of operations of the combined institution (Polonia Bancorp and the Company) had the merger occurred on April 1, 2017 and 2016. The pro forma income statement adjustments are limited to the effects of fair value mark amortization and accretion and intangible asset amortization. No cost savings or additional merger expenses have been included in the pro forma results of operations for the three and nine months ended June 30, 2017 and 2016.

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	Unaudited
	Three Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		6,053		5,681
Provision for loan and leases losses		30		150
Net interest income after provision for loan and lease losses		6,023		5,531
Non-interest income		625		721
Non-interest expenses		3,500		5,156
Income before income taxes		3,148		1,096
Income tax expense		1,031		318
Net income		2,117		778
Per share data
Weighed average basic shares outstanding		8,652,699		8,655,077
Dilutive shares		656,370		270,973
Adjusted weighted-average dilutive shares		9,309,069		8,926,050
Basic earnings per common share	$	0.25	$	0.09
Dilutive earnings per common share	$	0.25	$	0.09

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the Merger. The dilutive shares reflect the Company’s estimated diluted shares for the period.

	Unaudited
	Nine Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		14,998		17,648
Provision for loan and leases losses		2,580		225
Net interest income after provision for loan and lease losses		12,418		17,423
Non-interest income		1,500		2,134
Non-interest expenses		12,981		17,582
Income before income taxes		937		1,975
Income tax expense		230		704
Net income		707		1,271
Per share data
Weighed average basic shares outstanding		8,202,850		8,655,077
Dilutive shares		570,792		246,791
Adjusted weighted-average dilutive shares		8,773,642		8,901,868
Basic earnings per common share	$	0.08	$	0.10
Dilutive earnings per common share	$	0.08	$	0.10

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the merger. The dilutive shares reflect the Company’s estimated diluted shares for the period

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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, 2016 (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 Bank (the “Bank”) as a result of the second-step conversion of the Bank 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 (which includes a financial center), with ten additional financial centers located in Philadelphia, Montgomery 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. Effective January 1, 2017, the Company completed its acquisition of Polonia Bancorp, Inc. (“Polonia Bancorp”) and its wholly owned subsidiary, Polonia Bank, pursuant to the terms of an Agreement and Plan of Merger dated June 2, 2016.

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.

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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 Company’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 an individual loan analysis of commercial real estate loans, construction and land development loans and multi-family loans that have a risk rating of “substandard” and/or non-performing. Under most circumstances, if a specific impairment is warranted then that portion of the loan will be immediately charged-off. 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.

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. There were no securities with a Level 3 classification as of June 30, 2017 or September 30, 2016. 

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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 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 real estate owned, along with both available-for-sale (“AFS”) and held-to-maturity (“HTM”) securities that have deteriorated fair values or declines in credit rating that fall below investment grade, 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.

Forward-looking Statements. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, expectations or predictions of future financial or business performance, conditions relating to the Company, or other effects of the merger of the Company and Polonia Bancorp. These forward-looking statements include statements with respect to the Company’s beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions, that are subject to significant risks and uncertainties, and are subject to change based on various factors (some of which are beyond the Company’s control). The words “may,” “could,” “should,” “would,” “will,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan” and similar expressions are intended to identify forward-looking statements.

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In addition to factors previously disclosed in the reports filed by the Company with the Securities and Exchange Commission (“SEC”) and those identified elsewhere in this Form 10-Q, the following factors, among others, could cause actual results to differ materially from forward looking statements or historical performance: difficulties and delays in integrating the Polonia Bancorp business or fully realizing anticipated cost savings and other benefits of the merger; business disruptions following the merger; the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations; 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, investment and mortgage-backed securities 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; and the success of the Company at managing the risks involved in the foregoing.

The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by or on behalf of the Company to reflect events or circumstances occurring after the date of this Form 10-Q.

For a complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review the Company’s filings with the SEC, including the “Risk Factors” section in its most recent Annual Report on Form 10-K, as supplemented by its quarterly or other reports subsequently filed with the SEC.

Market Overview. The economy has shown signs of improvement during the six months of calendar 2017 and we still view the current environment as challenging. During the six months of 2017, the stock market has reached record highs and the unemployment rate fall below 5.0% along with an increase in demand for commercial real estate within the Company’s lending area. Since December 2015, the Federal Reserve Bank increased the discount rate 75 basis points. The prime rate used by most banks was impacted by a similar increase during that time frame.

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 June 30, 2017 and September 30, 2016, and the results of operations for the three and nine months ended June 30, 2017 and 2016.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2017 AND SEPTEMBER 30, 2016

At June 30, 2017, the Company had total assets of $870.7 million, as compared to $559.5 million at September 30, 2016, an increase of $311.2 million or 55.6%. The substantial majority of the growth was attributable to the acquisition of Polonia Bancorp. In addition to the acquisition, the Company experienced growth in the balance of net loans receivable of $35.9 million or 10.4% not related to the acquisition when compared to the $344.9 million balance of net loans receivable as of September 30, 2016.

Total liabilities increased by $291.0 million to $736.5 million at June 30, 2017 from $445.5 million at September 30, 2016. As with the asset growth, the bulk of the liability growth resulted from the acquisition of Polonia Bancorp. In addition to the deposits assumed, the Company assumed $56.0 million in FHLB advances in addition to the $64.8 million of such borrowings the Company already held. In addition to the deposit growth resulting from the acquisition, the Company experienced growth in deposits of $54.4 million or 14.0% when compared the balance outstanding at June 30, 2017 to the $389.2 million balance as of September 30, 2016.

Total stockholders’ equity increased by $20.2 million to $134.2 million at June 30, 2017 from $114.0 million at September 30, 2016. This increase was primarily due to the issuance of common stock to the stockholders of Polonia Bancorp in connection with the acquisition. Another item that impacted stockholders’ equity was the termination of the Bank’s employee stock ownership plan (“ESOP”) effective as of December 31, 2016. A portion of the shares of common stock held in the ESOP’s suspense account was used to satisfy the ESOP’s indebtedness in full. In addition, stockholders’ equity was affected by a $1.5 million decline in the fair value of the Company’s available-for-sale portfolio.

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COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2017 AND 2016

Net income. The Company reported net income of $2.1 million, or $0.25 per basic and diluted share, for the quarter ended June 30, 2017 as compared to net income of $777,000, or $0.10 per basic and diluted share, for the same quarter in fiscal 2016. The increase in the current period reflected the beneficial effects resulting from the acquisition of Polonia Bancorp completed on January 1, 2017, that was spearheaded by our new management team, combined with the results of the implementation by our new management team of strategies to improve earnings by increasing earning assets while simultaneously controlling operating expenses. For the nine months ended June 30, 2017, the Company recognized net income of $707,000, or $0.08 per basic and diluted share, as compared to net income of $1.7 million, or $0.23 per basic and diluted share, for the same period in fiscal 2016. The nine-month period in 2017 included a one-time $2.7 million pre-tax expense related to the Polonia Bancorp acquisition as well as a $1.9 million non-cash pre-tax charge-off associated with a large lending relationship.

Net interest income. For the three months ended June 30, 2017, net interest income increased to $6.1 million as compared to $3.7 million for the same period in fiscal 2016. The increase reflected a $3.0 million, or 66.1%, increase in interest income, partially offset by an increase of $553,000, or 67.1%, in interest paid on deposits and borrowings. For the nine months ended June 30, 2017, net interest income increased to $15.0 million as compared to $10.4 million for the same period in fiscal 2016. The increase reflected a $5.7 million, or 44.3%, increase in interest income, partially offset by an increase of $1.1 million, or 45.9%, in interest paid on deposits and borrowings. The increase in net interest income in both periods in fiscal 2017 was primarily due to the increase in the weighted average balance of earning assets reflecting in large part the addition of earning assets acquired as of January 1, 2017 upon completion of the Polonia Bancorp acquisition. In addition, during the third quarter of fiscal 2017 the average outstanding balance of loans increased $20.1 million while the average balance of investment securities increased $21.6 million, with such growth primarily funded with an increase in deposits.

For the three and nine months ended June 30, 2017, the net interest margin was 2.99% and 2.83%, respectively, compared to 2.78% and 2.74% for the same periods in fiscal 2016. The margin improvements reflected in large part the increase in the weighted average balances of interest-earning assets noted above as well, to a lesser degree, the increase in the weighted average yield on earning assets which reflected primarily the effects of purchase accounting fair value adjustments on the assets acquired from Polonia Bancorp.

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.

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	Three Months
	Ended June 30,
	2017								2016
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	123,709	$	611			1.98	%	$	51,070	$	529			2.91	%
Mortgage-backed securities		132,867		1,106			3.34			129,557		673			2.62
Loans receivable(2)		531,130		5,647			4.26			334,410		3,263			3.96
Other interest-earning assets		24,192		66			1.09			12,450		9			0.29
Total interest-earning assets		811,898		7,430			3.67			527,487		4,474			3.44
Cash and non interest-bearing balances		2,392								1,781
Other non interest-earning assets		52,538								20,950
Total assets	$	866,828							$	550,218
Interest-bearing liabilities:
Savings accounts	$	106,801		11			0.04		$	73,031		18			0.10
Money market deposit and NOW accounts		146,843		38			0.10			91,884		34			0.15
Certificates of deposit		362,960		952			1.05			218,857		629			1.17
Total deposits		616,604		1,001			0.65			383,772		681			0.72
Advances from FHLB		102,786		375			1.46			44,200		142			1.30
Advances from borrowers for taxes and												1
insurance		3,253		1			0.12			2,131		1			0.19
Total interest-bearing liabilities		722,643		1,377			0.76			430,103		824			0.78
Non interest-bearing liabilities:
Non interest-bearing demand accounts		9,300								2,795
Other liabilities		2,384								1,752
Total liabilities		734,327								434,650
Stockholders' equity		132,501								115,568
Total liabilities and stockholders' equity	$	866,828							$	550,218
Net interest-earning assets	$	89,255							$	97,384
Net interest income; interest rate spread			$	6,053			2.67	%			$	3,650			2.66	%
Net interest margin(3)							2.99	%							2.81	%
Average interest-earning assets to average interest-bearing liabilities				112.35	%							122.64	%

(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.

54

	Nine Months
	Ended June 30,
	2017								2016
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	107,488	$	2,263			2.81	%	$	60,356	$	1,517			2.69	%
Mortgage-backed securities		118,085		2,179			2.47			111,126		1,868			2.59
Loans receivable(2)		462,793		14,062			4.06			323,830		9,489			3.90
Other interest-earning assets		21,217		102			0.64			10,511		22			0.28
Total interest-earning assets		709,583		18,606			3.51			505,823		12,896			3.40
Cash and non interest-bearing balances		2,380								1,887
Other non interest-earning assets		42,797								19,929
Total assets	$	754,760							$	527,639
Interest-bearing liabilities:
Savings accounts	$	95,614		36			0.05		$	72,786		65			0.12
Money market deposit and NOW accounts		166,923		148			0.12			93,339		129			0.19
Certificates of deposit		262,450		2,502			1.27			203,440		1,981			1.27
Total deposits		524,987		2,686			0.68			369,565		2,175			0.78
Advances from FHLB		89,870		918			1.37			23,306		296			1.30
Advances from borrowers for taxes and
insurance		2,607		4			0.21			1,892		2			0.14
Total interest-bearing liabilities		617,464		3,608			0.78			394,763		2,473			0.81
Non interest-bearing liabilities:
Non interest-bearing demand accounts		7,709								2,689
Other liabilities		3,606								3,219
Total liabilities		628,779								400,671
Stockholders' equity		125,981								115,861
Total liabilities and stockholders' equity	$	754,760							$	516,532
Net interest-earning assets	$	92,119							$	111,060
Net interest income; interest rate spread			$	14,998			2.73	%			$	10,423			2.58	%
Net interest margin(3)							2.83	%							2.74	%
Average interest-earning assets to average interest-bearing liabilities				114.92	%							125.44	%

(1) Yields and rates for the nine months 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.

55

Provision for loan losses. The Company recorded a provision for loan losses in the amount of $30,000 and $2.6 million, respectively, for the three and nine months ended June 30, 2017. The provision for loan losses for the nine months ended June 30, 2017 was primarily due to a $1.9 million charge-off related to the borrower discussed below whose primary project financed currently by the Bank involves the proposed development of 169 residential lots. As noted below, the Bank and the borrower are in litigation and no resolution of the situation has been arrived at as of the date hereof in part due to the bankruptcy filing by the borrower effected in June 2017. In light of the status of both the litigation as well as the progress of construction of the project, the Company recorded a $1.9 million non-cash charge-off during the quarter ended March 31, 2017. The remaining portion of the provision recorded during the nine-months ended June 30, 2017 was related to an increase in the outstanding balance of loans. The loans acquired from Polonia Bancorp initially did not have any impact on the allowance for loan losses, because they were acquired at their fair value recorded in the quarter ended March 31, 2017. Any write-downs to fair value were reflected in the one-time merger-related charge recorded in the quarter ended March 31, 2017. In the event that the credit quality of any loans acquired from Polonia Bancorp should deteriorate in the future, additional provisions to the allowance may be required.

The allowance for loan losses totaled $4.1 million, or 0.7% of total loans and 25.2% of total non-performing loans (which included loans acquired from Polonia Bancorp at their fair-value) at June 30, 2017 as compared to $3.3 million, or 1.0% of total loans and 20.6% of total non-performing loans at September 30, 2016. The Company believes that the allowance for loan losses at June 30, 2017 was sufficient to cover all inherent and known losses associated with the loan portfolio at such date.

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 (see the discussion in “Critical Accounting Policies - Allowance for Loan Losses” “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in PART I hereof).

At June 30, 2017, the Company’s non-performing assets totaled $16.1 million or 1.9% of total assets as compared to $15.9 million or 2.8% of total assets at September 30, 2016. Non-performing assets at June 30, 2017 included five construction loans aggregating $8.7 million, 33 one-to-four family residential loans aggregating $4.4 million, one single-family residential investment property loan in the amount $1.4 million and five commercial real estate loans aggregating $1.6 million. Non-performing assets also included at June 30, 2017 one real estate owned property consisting of a single-family residential property with a carrying value of $192,000. At June 30, 2017, the Company had nine loans aggregating $6.1 million that were classified as troubled debt restructurings (“TDRs”). Three of such loans aggregating $4.9 million were designated non-performing as of June 30, 2017 and on non-accrual status; one of such loans in the amount of $1.4 million has continued to make payments in accordance with the restructured loan terms, but management continues to have concerns over the borrower’s ability to make future payments and as a result has determined to not return the loan to performing status. The remaining two TDRs classified non-accrual totaling $3.5 million are a part of one of the Bank’s largest borrowing relationships totaling $8.9 million (after taking into account the $1.9 million write-down recognized during the quarter ending March 31, 2017). The primary project of the borrower is the subject of litigation between the Bank and the borrower and as a result, the project currently is not proceeding. The borrower has recently filed for bankruptcy under Chapter 11of the federal bankruptcy code. The Company has removed the underlying litigation noted above between the borrower from state court to the federal bankruptcy court in which the bankruptcy proceeding is being heard (further discussed in Item 1, Legal Proceedings, in PART II hereof). The remaining six TDRs have performed in accordance with the terms of their revised agreements and have been placed on accruing status. As of June 30, 2017, the Company had reviewed $18.1 million of loans for possible impairment of which $12.7 million was classified substandard compared to $19.4 million reviewed for possible impairment and $14.6 million of which was classified substandard as of September 30, 2016. The Company did not have any assets classified doubtful or loss as of either June 30, 2017 or September 30, 2016.

At June 30, 2017, the Company had $2.4 million of loans delinquent 30-89 days as to interest and/or principal. Such amount consisted of 13 one-to-four family residential loans totaling $1.9 million, one commercial real estate loan in the amount of $465,000, and one consumer loan in the amount of $60,000.

At June 30, 2017, we also had a total of ten loans aggregating $3.1 million that had been designated “special mention”. These loans consist of three one-to-four family residential loans totaling $1.6 million and six commercial real estate loans totaling $1.5 million. At September 30, 2016, we had a total of five loans aggregating $2.6 million designated as “special mention”, consisting of three one-to-four family residential loans totaling $1.7 million and two commercial real estate loans totaling $943,000.

The following table shows the amounts of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due as to principal and/or interest and real estate owned) as of June 30, 2017 and September 30, 2016. At neither date did the Company have any accruing loans 90 days or more past due that were accruing.

56

	June 30,  2017			September 30, 2016
	(Dollars in Thousands)
Non-accruing loans:
One-to-four family residential	$	5,775		$	4,244
Commercial real estate		1,603			1,346
Construction and land development		8,714			10,288
Total non-accruing loans		16,092			15,878
Real estate owned, net:  (1)		192			581
Total non-performing assets	$	16,384		$	16,459
Total non-performing loans as a percentage of loans, net		2.96	%		4.56	%
Total non-performing loans as a percentage of total assets		1.85	%		2.84	%
Total non-performing assets as a percentage of total assets		1.87	%		2.94	%

(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 $625,000 and $1.5 million, respectively, for the three and nine month periods ended June 30, 2017, compared to $400,000 and $883,000, respectively, for the comparable periods in fiscal 2016. The increase experienced in both of the 2017 periods was primarily attributable to the addition of five full-service financial centers, along with the related customer deposit base (increased ATM fees and account service charges and transaction fees), acquired from Polonia Bancorp along with an increased return on bank owned life insurance (“BOLI”) as a result of the increase in the amount of BOLI due to the purchase of an additional $10.0 million of BOLI in the quarter ended December 31, 2016.

Non-interest expense. For the three and nine months periods ended June 30, 2017, non-interest expense increased $685,000 or 24.3% and $4.5 million or 52.6%, respectively, compared to the same periods in the prior fiscal year. The primary reason for the increase for both three and nine months periods ended June 30, 2017 was the additional expense resulting from the Polonia Bancorp acquisition which added five additional financial centers to our branch network as well as additional personnel. In addition, during the nine-month period ended June 30, 2017, the Company recorded a one-time merger related charge of approximately $2.7 million, pre-tax.

Income tax expense. For the three-month period ended June 30, 2017, the Company recorded income tax expense of $1.0 million resulting in an effective tax rate of 32.8%, compared to $308,000 and an effective tax rate of 28.4% for the same period in 2016. For the nine-month period ended June 30, 2017, the Company recorded income tax expense of $230,000 resulting in an effective tax rate of 24.6%, compared to $836,000 and an effective tax rate of 32.5% for the same period in 2016. The effective tax rate for the nine-month period ended June 30, 2017 was lower due to the net loss recognized during the second quarter of fiscal 2017 primarily as a result of the one-time merger-related costs incurred in connection with the acquisition of Polonia Bancorp combined with the $1.9 million write-down related to the large borrowing relationship discussed above.

57

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 June 30, 2017, our cash and cash equivalents amounted to $22.9 million. In addition, our available-for-sale investment securities amounted to an aggregate of $183.4 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 June 30, 2017, the Company had $34.7 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 $8.9 million and letters of credit outstanding of $1.5 million at June 30, 2017. Certificates of deposit as of June 30, 2017 that are maturing in six months or less totaled $123.7 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 June 30, 2017, we had $108.1 million in outstanding FHLB advances and had the ability to obtain an additional $266.8 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 of Philadelphia discount window.

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

58

The following table summarizes the Company’s and Bank’s regulatory capital ratios as of June 30, 2017 and September 30, 2016 and compares them to current regulatory guidelines. The Company is not subject to capital ratios imposed by Basel III on bank holding companies because the Company is deemed to be a small bank holding company.

							To Be
							Well Capitalized
				Required for			Under Prompt
				Capital Adequacy			Corrective Action
	Actual Ratio			Purposes			Provisions
June 30, 2017:
Tier 1 capital (to average assets)
The Company		14.76	%		N/A			N/A
The Bank		13.44	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		24.60	%		N/A			N/A
The Bank		22.40	%		5.1	%(a)		6.5	%
Tier 1 capital (to risk-weighted assets)
The Company		24.60	%		N/A			N/A
The Bank		22.40	%		6.6	%(a)		8.0	%
Total capital (to risk-weighted assets)
The Company		25.44	%		N/A			N/A
The Bank		23.24	%		8.6	%(a)		10.0	%
September 30, 2016:
Tier 1 capital (to average assets)
Company		20.41	%		N/A			N/A
Bank		18.15	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		38.57	%		N/A			N/A
The Bank		34.36	%		4.5	%		6.5	%
Tier 1 capital (to risk-weighted assets)
Company		38.57	%		N/A			N/A
Bank		34.36	%		4.0	%		6.0	%
Total capital (to risk-weighted assets)
Company		39.70	%		N/A			N/A
Bank		35.49	%		8.0	%		10.0	%

(a) Includes intial 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.

59

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 Chief Operating Officer, Chief Financial Officer, Chief Lending Officer, Chief Credit Officer, Chief Risk Officer 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 short duration or variable rate construction and development and commercial real estate loans as well as our portfolio of step-up callable agency bonds and agency issued collateralized mortgage-backed securities (“CMOs”) with short effective lives. In addition, we implemented two interest rate swaps to reduce our funding costs for a five-year period. 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 the 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 June 30, 2017, 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 June 30, 2017, 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 5.8% to 31.6%. The annual prepayment rate for mortgage-backed securities is assumed to range from 0.5% to 17.9%. For savings accounts, checking accounts and money markets, the decay rates vary on an annual basis over a ten year period.

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				More than			More than			More than
	3 Months			3 Months			1 Year			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)	$	9,712		$	14,869		$	39,038		$	33,834		$	150,640		$	248,093
Loans receivable(3)		70,442			68,607			145,745			97,366			162,262			544,422
Other interest-earning assets(4)		29,237			-			-			1,355			-			30,592
Total interest-earning assets	$	109,391		$	83,476		$	184,783		$	132,555		$	312,902		$	823,107
Interest-bearing liabilities:
Savings accounts	$	2,919		$	9,106		$	14,961		$	14,429		$	63,031		$	104,446
Money market deposit and NOW accounts		4,815			13,600			22,950			21,189			82,801			145,355
Certificates of deposit		58,162			147,356			117,675			41,853			-			365,046
Advances from FHLB		935			30,365			37,533			39,245			-			108,078
Advances from borrowers for taxes and insurance		3,982			-			-			-			-			3,982
Total interest-bearing liabilities	$	70,813		$	200,427		$	193,119		$	116,716		$	145,832		$	726,907
Interest-earning assets less interest-bearing liabilities	$	38,578		($	116,951	)	($	8,336	)	$	15,839		$	167,070		$	96,200
Cumulative interest-rate sensitivity gap (5)	$	38,578		($	78,373	)	($	86,709	)	($	70,870	)	$	96,200
Cumulative interest-rate gap as a percentage of total assets at June 30, 2017		4.43	%		-9.00	%		-9.96	%		-8.14	%		11.05	%
Cumulative interest-earning assets as a percentage of cumulative interest- bearing liabilities at June 30, 2017		154.48	%		71.11	%		81.33	%		87.80	%		113.23	%

(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.

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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.

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 June 30, 2017 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	$	112,487	$	(54,348	)		(32.58	)%		14.61	%		(4.53	)%
200		129,495		(37,340	)		(22.38	)%		16.15	%		(2.99	)%
100		148,402		(18,433	)		(11.05	)%		17.74	%		(1.40	)%
Static		166,835		-			-			19.14	%		-
(100)		172,954		6,119			3.67	%		19.31	%		0.17	%
(200)		169,927		3,092			1.85	%		18.69	%		(0.45	)%
(300)		174,683		7,848			4.70	%		18.91	%		(0.23	)%

At September 30, 2016, the Company’s NPV was $129.7 million or 23.2% of the market value of assets. Following a 200 basis point increase in interest rates, the Company’s “post shock” NPV would be $102.1 million or 20.0% 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At June 30, 2017, 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, 2016, set forth in Item 7, “Management’s 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.

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PART II

Item 1. Legal Proceedings

As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016, 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 (the “Philadelphia Litigation”) in the Court of Common Pleas, Philadelphia, Pennsylvania (the “Court”), against the Bank seeking damages in an amount in excess of $27.0 million. The lawsuit asserts allegations related to a loan granted by the Bank to the Gualtieri Parties to develop a 169-unit townhouse and condominium project located in Bristol Borough in Bucks County, Pennsylvania (the “Project”).

In May 2016, the Bank filed a motion with the court seeking to dismiss the majority of claims asserted in the Philadelphia Litigation.  In August 2016, the Court dismissed a majority of the Gualtieri Parties’ claims. The Bank has also counterclaimed against the Gualtieri Parties for failure to satisfy the nine loans extended thereto and for failure to complete the Project. In February 2017, the Court stayed the Philadelphia Litigation pending possible resolution of the Litigation. No resolution was obtained and the stay has expired.

Since commencement of the Philadelphia Litigation, the Bank has filed Complaints for Confession against the Gualtieri Parties and certain other entities affiliated with Renato J. Gualtieri (“Gualtieri Parties and Affiliated Entities”) based on the claimed defaults under the nine loans issued by the Bank. These actions have been stayed pending the resolution of the Philadelphia Litigation. The Bank has also filed foreclosure actions with regard to the commercial properties collateralizing the loans issued to the Gualtieri Parties and Affiliated Entities.

Shortly after the Court lifted the stay in the Philadelphia Litigation, the Gualtieri Parties and Affiliated Entities filed for bankruptcy under Chapter 11. The Bank has removed the underlying Philadelphia Litigation from state court to the federal bankruptcy court.

As the Philadelphia Litigation is in its early stages, no prediction can be made as to the outcome thereof. However, the Bank believes that it has meritorious defenses to the remaining claims under the Philadelphia Litigation and it intends to vigorously defend the case.

In addition, as the Chapter 11 bankruptcy is in its early stages, no prediction can be made as to the outcome thereof. However, the Bank believes that it has meritorious challenges to the Chapter 11 bankruptcy filed by the Gualtieri Parties and Affiliated Entities.

The Bank recently filed a motion in the Federal Bankruptcy Court seeking to convert the bankruptcy to a Chapter 7 or in the alternative to appoint a Chapter 11 trustee to preserve the assets securing the Bank’s loans with the Gualtieri Parties and Affiliated Entities.

As previously disclosed, the Bank had reached a preliminary settlement in two putative shareholder derivative and class action lawsuits related to the Bank’s merger with Polonia Bancorp, consolidated as Parshall v. Eugene Andruczyk et al., which were filed in the Circuit Court for Montgomery County, Maryland (“Maryland Court”) on July 21, 2016 (both lawsuits are collectively referred to as the “Lawsuit”).

The merger with Polonia Bancorp was completed effective as of January 1, 2017.

On May 26, 2017, the Maryland Court entered an Order providing final approval of the settlement. 

In addition to the lawsuits noted above, the Company is involved in various other legal actions arising in the ordinary course of its business. All such actions in the aggregate involve amounts that are believed by management to be immaterial to the financial condition and results of operations of the Company.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended September 30, 2016, as such factors could materially affect the Company’s business, financial condition, or future results of operations. As of June 30, 2017, 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, 2016. The risks described in the 2016 Annual Report on Form 10-K for the year ended September 30, 2016 are not the only risks that the Company faces. Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, also may have a material adverse impact on the Company’s business, financial conditions, or results of operations.

64

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

(a) and (b) Not applicable

(c) The Company currently has a board approved stock repurchase plan in operation but did not repurchases any equity shares of common stock during for the quarter ended June 30, 2017 pursuant to the plan, due to the current market conditions.

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)
April 1 - 30, 2017		-			$	-		-		188,159
May 1 - 31, 2017		-				-		-		188,159
June 1 - 30, 2017		254	(2	)		18.16		-		188,159
		254			$	18.16

(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.

(2) Shares repurchased in connection with withholding shares to meet income tax withholding obligations upon the vesting of restricted stock awards.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

65

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.
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.

Date:	August 9, 2017	By:	/s/ Dennis Pollack
			Dennis Pollack
			President and Chief Executive Officer
Date:	August 9, 2017	By:	/s/ Jack E. Rothkopf
			Jack E. Rothkopf Senior Vice President, Chief Financial Officer and Treasurer

66

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: August 9, 2017	/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: August 9, 2017	/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 June 30, 2017 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: August 9, 2017	/s/ Dennis Pollack
	Name: Dennis Pollack
	Title: President and Chief Executive Officer

Date: August 9, 2017	/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	9 Months Ended
	Jun. 30, 2017	Jul. 31, 2017
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		9,007,742
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3

XML

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
ASSETS
Cash and amounts due from depository institutions	$ 2,182	$ 1,965
Interest-bearing deposits	20,745	10,475
Total cash and cash equivalents	22,927	12,440
Certificates of deposit	1,853	1,853
Investment and mortgage-backed securities available for sale (amortized cost- June 30, 2017, $184,980; September 30, 2016, $137,222)	183,439	138,694
Investment and mortgage-backed securities held to maturity (fair value- June 30, 2017, $58,570; September 30, 2016, $40,700)	59,654	39,971
Loans receivable-net of allowance for loan losses (June 30, 2017, $4,058; September 30, 2016, $3,269)	544,422	344,948
Accrued interest receivable	3,089	1,928
Real estate owned	192	581
Federal Home Loan Bank stock-at cost	5,767	2,463
Office properties and equipment-net	8,076	1,344
Bank owned life insurance	27,877	13,055
Prepaid expenses and other assets	5,497	2,203
Goodwill	7,163
Intangible assets	747
TOTAL ASSETS	870,703	559,480
Deposits:
Noninterest-bearing	9,569	3,804
Interest-bearing	605,277	385,397
Total deposits	614,846	389,201
Advances from Federal Home Loan Bank (short-term)	20,000	20,000
Advances from Federal Home Loan Bank (long-term)	88,078	30,638
Accrued interest payable	1,339	1,403
Advances from borrowers for taxes and insurance	3,982	1,748
Accounts payable and accrued expenses	8,262	2,488
Total liabilities	736,507	445,478
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none issued
Common stock, $.01 par value, 40,000,000 shares authorized; 10,819,006 and 9,544,809 issued and 9,007,742 and 8,045,544 outstanding at June 30, 2017 and September 30, 2016, respectively	108	95
Additional paid-in capital	118,480	95,713
Unearned Employee Stock Ownership Plan (ESOP) shares		(4,550)
Treasury stock, at cost: 1,811,264 shares at June 30, 2017 and and 1,499,265 shares at September 30, 2016	(26,692)	(21,098)
Retained earnings	42,987	43,044
Accumulated other comprehensive (loss) income	(687)	798
Total stockholders' equity	134,196	114,002
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 870,703	$ 559,480

XML

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parentheticals) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Statement Of Financial Position [Abstract]
Investment and mortgage-backed securities available for sale, amortized cost (in dollars)	$ 184,980	$ 137,222
Investment and mortgage-backed securities held to maturity, fair value (in dollars)	58,570	40,700
Allowance for loan losses on loans receivable (in dollars)	$ 4,058	$ 3,269
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	10,819,006	9,544,809
Common stock, shares outstanding	9,007,742	8,045,544
Number of treasury share purchased	1,811,264	1,499,265

XML

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
INTEREST INCOME:
Interest on loans	$ 5,647	$ 3,263	$ 14,062	$ 9,489
Interest on mortgage-backed securities	802	673	2,179	1,868
Interest and dividends on investments	926	529	2,263	1,517
Interest on interest-bearing assets	55	9	102	22
Total interest income	7,430	4,474	18,606	12,896
INTEREST EXPENSE:
Interest on deposits	1,002	682	2,690	2,177
Interest on advances from Federal Home Loan Bank	375	142	918	296
Total interest expense	1,377	824	3,608	2,473
NET INTEREST INCOME	6,053	3,650	14,998	10,423
PROVISION FOR LOAN LOSSES	30	150	2,580	225
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	6,023	3,500	12,418	10,198
NON-INTEREST INCOME:
Fees and other service charges	179	142	472	371
Gain on sale of loans, net	3		52	2
Gain on the sale of investment securities (AFS)	70	161	70	161
Gain on the sale of OREO				58
Income from bank owned life insurance	229	83	506	251
Other	144	14	400	40
Total non-interest income	625	400	1,500	883
NON-INTEREST EXPENSE:
Salaries and employee benefits	1,884	1,684	5,593	5,071
Data processing	175	112	481	340
Professional services	230	230	1,018	750
Office occupancy	432	246	1,100	753
Director compensation	57	123	218	351
Deposit insurance premium	52	134	93	306
Advertising	92	17	158	55
Communications expense	104	42	211	121
Furniture and fixtures	81	58	252	171
Merger-related expense			2,663
Intangible asset amortization	37		75
Other	356	169	1,119	589
Total non-interest expense	3,500	2,815	12,981	8,507
INCOME BEFORE INCOME TAXES	3,148	1,085	937	2,574
INCOME TAXES:
Current expense	941	410	769	807
Deferred expense (benefit)	90	(102)	(539)	29
Total income tax expense	1,031	308	230	836
NET INCOME	$ 2,117	$ 777	$ 707	$ 1,738
BASIC EARNINGS PER SHARE (in dollars per share)	$ 0.25	$ 0.10	$ 0.08	$ 0.23
DILUTED EARNINGS PER SHARE (in dollars per share)	0.25	0.10	0.08	0.23
DIVIDENDS PER SHARE (in dollars per share)	$ 0.03	$ 0.03	$ 0.09	$ 0.09

XML

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Statement Of Other Comprehensive Income [Abstract]
Net income	$ 2,117	$ 777	$ 707	$ 1,738
Unrealized holding gains (losses) on available-for-sale securities	1,120	744	(2,881)	1,897
Tax effect	(381)	(257)	979	(645)
Reclassification adjustment for net security gains realized in net income	(70)	(161)	(70)	(161)
Tax effect	24	55	24	55
Unrealized holding (losses) gains on interest rate swaps	(91)	(351)	701	(351)
Tax effect	31	119	(238)	119
Total other comprehensive income (loss)	633	149	(1,485)	914
Comprehensive income (loss)	$ 2,750	$ 926	$ (778)	$ 2,652

XML

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 Income (Loss)	Total
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					1,738		1,738
Other comprehensive income (loss)						914	914
Dividends paid ($0.09 per share)					(694)		(694)
Purchase of treasury stock (43,698 shares and 520,546 shares for June 30, 2017 and 2016 respectively)				(7,824)			(7,824)
Issuance of treasury stock (74,665 shares)				862			862
Treasury stock used for Recognition and Retention Plan (34,814 shares and 41,800 shares issued for June 30, 2017 and 2016 respectively)		(640)		640
Tax benefit from stock compensation plans		156					156
Stock option expense		278					278
Recognition and Retention Plan expense		251					251
ESOP shares committed to be released (8,879 shares and 26,649 shares for June 30, 2017 and 2016 respectively)		102	282				384
BALANCE at Jun. 30, 2016	95	95,433	(4,644)	(21,013)	42,263	932	113,066
BALANCE at Sep. 30, 2016	95	95,713	(4,550)	(21,098)	43,044	798	114,002
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income					707		707
Other comprehensive income (loss)						(1,485)	(1,485)
Dividends paid ($0.09 per share)					(764)		(764)
Issuance of common stock (1,274,197 shares)	13	21,801					21,814
Purchase of treasury stock (43,698 shares and 520,546 shares for June 30, 2017 and 2016 respectively)				(1,058)			(1,058)
Terminate ESOP Plan (303,115 shares)		733	4,456	(5,189)
Treasury stock used for Recognition and Retention Plan (34,814 shares and 41,800 shares issued for June 30, 2017 and 2016 respectively)		(653)		653
Tax benefit from stock compensation plans		195					195
Stock option expense		349					349
Recognition and Retention Plan expense		284					284
ESOP shares committed to be released (8,879 shares and 26,649 shares for June 30, 2017 and 2016 respectively)		58	$ 94				152
BALANCE at Jun. 30, 2017	$ 108	$ 118,480		$ (26,692)	$ 42,987	$ (687)	$ 134,196

XML

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Statement Of Stockholders Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.09	$ 0.09
Issuance of common stock (in shares)	1,274,197
Purchase of treasury stock (in shares)	43,698	520,546
Terminate ESOP Plan (in shares)	303,115
Number of treasury stock shares issued (in shares)		74,665
Treasury stock used for Recognition and Retention Plan (in shares)	34,814	41,800
ESOP shares committed to be released	8,879	26,649

XML

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
OPERATING ACTIVITIES:
Net income	$ 707	$ 1,738
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation	399	242
Net amortization of premiums/discounts	575	11
Provision for loan losses	2,580	225
Net amortization of deferred loan fees and costs	81	172
Share-based compensation expense for stock options and awards	633	529
Income from bank owned life insurance	(506)	(251)
Gain from sale of loans held for sale	(52)	(2)
Gain from sale of investment securities	(70)	(161)
Gain on sale of other real estate owned	(60)	(58)
Originations of loans held for sale	(2,634)	(450)
Proceeds from sale of loans held for sale	2,686	452
Compensation expense of ESOP	139	384
Deferred income tax (expense) benefit	(539)	29
Changes in assets and liabilities which used cash:
Accrued interest receivable	(1,161)	(98)
Prepaid expenses and other assets	4,846	(898)
Accrued interest payable	(64)	(276)
Accounts payable and accrued expenses	(3,140)	420
Net cash provided by operating activities	4,420	2,008
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale	(56,970)	(67,815)
Purchase of corporate bonds available for sale	(11,714)	(20,466)
Purchase of municipal bonds held to maturity	(18,847)
Loans originated	(160,085)	(59,918)
Principal collected on loans	118,107	29,488
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity	861	3,748
Available-for-sale	8,131	50,962
Proceeds from the sale of investments and mortgage-backed securities AFS	10,593	25,161
Proceeds from the sale of Polonia Bancorp Inc.'s investment portfolio acquired	42,164
Redemption of FHLB Stock	163
Purchase of FHLB stock	(67)	(2,018)
Proceeds from sale of real estate owned	449	927
Acquisition, net of cash	28,956
Purchase of BOLI	(10,000)
Purchases of equipment	(229)	(169)
Net cash used in investing activities	(48,488)	(40,100)
FINANCING ACTIVITIES:
Net decrease increase in demand deposits, NOW accounts, and savings accounts	(12,686)	(4,411)
Net increase in certificates of deposit	66,088	25,977
Proceeds from FHLB advances	9,729	51,999
Repayment of FHLB advances long-term	(9,521)	(1,772)
Increase in advances from borrowers for taxes and insurance	2,234	1,099
Cash dividends paid	(764)	(694)
Release unallocated shares from ESOP Plan	4,550
Repayment of remaining principal balance of ESOP Loan	(734)
Issuance of treasury stock		1,502
Purchase of treasury stock	(4,536)	(8,464)
Tax benefit related to stock compensation plans	195	156
Net cash provided by financing activities	54,555	65,392
NET INCREASE IN CASH AND CASH EQUIVALENTS	10,487	27,300
CASH AND CASH EQUIVALENTS - Beginning of period	12,440	11,272
CASH AND CASH EQUIVALENTS - End of period	22,927	38,572
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Interest paid on deposits and advances from FHLB	2,842	2,749
Income taxes paid	980	450
SUPPLEMENTAL DISCLOSURES OF NONCASH FLOW
Real estate acquired in settlement of of loans		$ 207
Assets acquired:
Investment securities	42,164
Loans	160,157
Premises	6,902
Core deposit intangible	822
Goodwill	7,163
Bank owned life insurance	4,318
Other assets	2,558
Total assets	224,084
Liabilities assumed:
Deposits	172,243
Advances	57,232
Other liabilities	8,914
Total liabilities assumed	238,389
Net non-cash assets (liabilities) acquired	(14,305)
Cash acquired	$ 47,901

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Jun. 30, 2017

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 Bank (the “Bank”). The Company 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 (which includes a financial center), administrative office, and 10 full-service financial centers. Nine of the branch offices are located in Philadelphia (Philadelphia County), one is in Drexel Hill, Delaware County, and one is in Huntingdon Valley, Montgomery County (both Pennsylvania counties). The Bank maintains ATMs at all 11 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, the Company is subject to the regulation of the Board of Governors of the Federal Reserve System.

As of January 1, 2017, the Company completed its acquisition of Polonia Bancorp, Inc. (“Polonia Bancorp”) and Polonia Bank, Polonia’s wholly owned subsidiary. Polonia Bancorp and Polonia Bank were merged with and into the Company and the Bank, respectively.

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 nine months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

Use of Estimates in the Preparation of 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, goodwill and intangible assets, 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 at such date 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 (“2008 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 will not receive any dividends declared on the common stock subject to the award prior to the date the shares are 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 nine month period ended June 30, 2017, the Company repurchased 303,115 shares of common stock of unallocated shares held in a suspense account by the Bank’s ESOP as collateral with an aggregate value of $5.2 million in order to payoff the associated loans that were terminated as of December 31, 2016 in connection with the termination of the Bank’s ESOP. In addition, 42,791 shares of common stock were purchased in conjunction with the termination of the Polonia Bank ESOP as a result of the acquisition. The remaining shares purchased were related to the Company buying shares for the benefit of the employee stock benefits plans.

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 June 30, 2017.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The ASU’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 ASU specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This ASU was to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period; the effective date was deferred by a year discussed below. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606.  However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

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 ASU 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 ASU (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 ASU 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 ASU 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 ASU 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 and/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. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1 percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this ASU apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The standards in this ASU 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 ASU 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 August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), which requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. Consequently, the amendments in this ASU eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those annual reporting periods. For all other entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual periods beginning after December 15, 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. That is, earlier adoption should be in the first interim period if an entity issues interim financial statements. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to the amount of retained earnings as of the beginning of the period of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), which amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screening process requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this ASU to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this ASU should be applied prospectively on or after the effective date. This ASU is not expected to have a significant impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. This ASU is not expected to have a significant impact on the Company’s financial statements.

In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). The amendments in this Update clarify what constitutes a financial asset within the scope of Subtopic 610-20. The amendments also clarify that entities should identify each distinct nonfinancial asset or in-substance nonfinancial asset that is promised to a counterparty and to derecognize each asset when the counterparty obtains control. There is also additional guidance provided for partial sales of a nonfinancial asset and when derecognition, and the related gain or loss, should be recognized. The amendments in this Update are effective at the same time as the amendments in Update 2014-09. Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of this standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. 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 July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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EARNINGS PER SHARE

9 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

EARNINGS PER SHARE

2. EARNINGS PER SHARE

Basic earnings per common share is computed by dividing net income 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 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, consisting of restricted stock and stock options 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 June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	2,117	$	2,117	$	777	$	777
Weighted average shares outstanding		8,652,699		8,652,699		7,330,386		7,330,386
Effect of common stock equivalents		-		656,370		-		200,986
Adjusted weighted average shares used in earnings  per share computation		8,652,699		9,309,069		7,330,386		7,531,372
Earnings per share - basic and diluted	$	0.25	$	0.25	$	0.10	$	0.10

	Nine Months Ended June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	707	$	707	$	1,738	$	1,738
Weighted average shares outstanding		8,202,850		8,202,850		7,442,956		7,442,956
Effect of common stock equivalents		-		570,792		-		210,125
Adjusted weighted average shares used in earnings per share computation		8,202,850		8,773,642		7,442,956		7,653,081
Earnings per share - basic and diluted	$	0.08	$	0.08	$	0.23	$	0.23

All exercisable stock options outstanding as of June 30, 2017 and 2016 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)

9 Months Ended

Jun. 30, 2017

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 June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	(1,320	)	$	783
Unrealized gains on available for sale securities		693			255
Unrealized losses on interest rate swaps		(60	)		(106	)
Total other comprehensive income		633			149
Ending Balance	$	(687	)	$	932

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

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

	Nine Months Ended June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	798		$	18
Unrealized (loss) gains on available for sale securities		(1,948	)		1,020
Unrealized gains (losses) on interest rate swaps.		463			(106	)
Total other comprehensive income (loss)		(1,485	)		914
Ending Balance	$	(687	)	$	932

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

	Three Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income

	Nine Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income 

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INVESTMENT AND MORTGAGE-BACKED SECURITIES

9 Months Ended

Jun. 30, 2017

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:

	June 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,989	$	-	$	(369	)	$	20,620
Mortgage-backed securities - U.S. government agencies		126,912		152		(1,349	)		125,715
Corporate bonds		37,073		271		(299	)		37,045
Total debt securities available for sale		184,974		423		(2,017	)		183,380
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	184,980	$	476	$	(2,017	)	$	183,439
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	236	$	(1,735	)	$	32,001
Mortgage-backed securities - U.S. government agencies		7,387		347		(29	)		7,705
Municipal bonds		18,767		184		(87	)		18,864
Total securities held to maturity	$	59,654	$	767	$	(1,851	)	$	58,570

	September 30, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,988	$	36	$	-		$	21,024
Mortgage-backed securities - U.S. government agencies		90,817		860		(102	)		91,575
Corporate bonds		25,411		661		(19	)		26,053
Total debt securities available for sale		137,216		1,557		(121	)		138,652
FHLMC preferred stock		6		36		-			42
Total securities available for sale	$	137,222	$	1,593	$	(121	)	$	138,694
Securities Held to Maturity:
U.S. government and agency obligations	$	33,499	$	399	$	(129	)	$	33,769
Mortgage-backed securities - U.S. government agencies		6,472		459		-			6,931
Total securities held to maturity	$	39,971	$	858	$	(129	)	$	40,700

The following table shows the gross unrealized losses and related fair values of the Company’s investments and mortgage-backed securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position at June 30, 2017:

	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	$	(369	)	$	20,620	$	-		$	-	$	(369	)	$	20,620
Mortgage-backed securities - agency		(1,129	)		81,547		(220	)		11,013		(1,349	)		92,560
Corporate bonds		(299	)		15,987		-			-		(299	)		15,987
Total securities available for sale	$	(1,797	)	$	118,154	$	(220	)	$	11,013	$	(2,017	)	$	129,167
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,735	)	$	28,765	$	-		$	-	$	(1,735	)	$	28,765
Mortgage-backed securities - agency		(29	)		1,216		-			-		(29	)		1,216
Municipal bonds		(87	)		5,836		-			-		(87	)		5,836
Total securities held to maturity	$	(1,851	)	$	35,817	$	-		$	-	$	(1,851	)	$	35,817
Total	$	(3,648	)	$	153,971	$	(220	)	$	11,013	$	(3,868	)	$	164,984

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, 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:
Mortgage-backed securities - agency	$	(50	)	$	16,498	$	(52	)	$	6,718	$	(102	)	$	23,216
Corporate bonds		(19	)		3,955		-			-		(19	)		3,955
Total securities available for sale	$	(69	)	$	20,453	$	(52	)	$	6,718	$	(121	)	$	27,171
Securities Held to Maturity:
U.S. government and agency obligations	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total securities held to maturity	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total	$	(198	)	$	40,824	$	(52	)	$	6,718	$	(250	)	$	47,542

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 its 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).

For both the three and nine months ended June 30, 2017 and 2016, the Company did not record any credit losses on investment securities through earnings.

U.S. Government and Agency Obligations - At June 30, 2017, there were 14 securities in a gross unrealized loss position for less than 12 months. 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 June 30, 2017.

Mortgage-Backed Securities – At June 30, 2017, there were 35 mortgage-backed securities in a gross unrealized loss position for less than 12 months, while there were nine securities in a gross unrealized loss position 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 June 30, 2017.

Corporate Bonds – At June 30, 2017, there were 15 securities in a gross unrealized loss for less than 12 months. These securities are backed by publicly traded companies and have an investment grade rating by one or more of the three following rating agencies (S&P, Moody’s or Fitch). As a result, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2017.

Municipal Bonds – At June 30, 2017, there were nine securities in a gross unrealized loss for less than 12 months. These securities are backed by local municipalities/school districts located in the Commonwealth of Pennsylvania and have an investment grade rating from one or more of the three following rating agencies (S&P, Moody’s or Fitch). As a result, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2017.

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.

	June 30, 2017
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	2,867	$	2,794	$	4,048	$	4,066
Due after five through ten years		20,583		20,661		18,748		18,872
Due after ten years		28,817		27,410		35,266		34,727
Total	$	52,267	$	50,865	$	58,062	$	57,665

During both the three and nine month periods ended June 30, 2017, the Company sold two mortgage-back securities with an aggregate amortized cost of $5.1 million at an recognized aggregate gain of $18,000 (pre-tax) and a corporate bond with an amortized cost of $5.2 million for a $52,000 (pre-tax) gain. During both three and nine month periods ended June 30, 2016, the Company sold five mortgage-back securities with an aggregate amortized cost of $11.0 million at a recognized aggregate gain of $153,000 (pre-tax). Also, during the same periods the Company had an aggregate of $11.0 million of agency securities called at the stated par value which was higher than the aggregated amortized cost and recorded a gain of $8,000.

During the both three and nine month periods ended June 30, 2017 and 2016, the Company did not pledge any investment securities as collateral for any of its FHLB advances.

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LOANS RECEIVABLE

9 Months Ended

Jun. 30, 2017

Receivables [Abstract]

LOANS RECEIVABLE

5. LOANS RECEIVABLE

Loans receivable consist of the following:

	June 30,			September 30,
	2017			2016
	(Dollars in Thousands)
One-to-four family residential	$	354,338		$	233,531
Multi-family residential		16,913			12,478
Commercial real estate		129,846			79,859
Construction and land development		93,671			21,839
Commercial business		490			99
Leases		4,922			3,286
Consumer		1,995			799
Total loans		602,175			351,891
Undisbursed portion of loans-in-process		(50,792	)		(5,371	)
Deferred loan fees and (costs)		(2,903	)		1,697
Allowance for loan losses		(4,058	)		(3,269	)
Net loans	$	544,422		$	344,948

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 June 30, 2017:

	One- to-four family residential		Multi-family residential		Commercial real estate		Construction and land development		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,242		158		1,224		1,011		4		27		24		368		4,058
Total ending allowance balance	$	1,242	$	158	$	1,224	$	1,011	$	4	$	27	$	24	$	368	$	4,058
Loans:
Individually evaluated for impairment	$	6,679	$	323	$	2,377	$	8,713	$	-	$	-	$	-			$	18,092
Collectively evaluated for impairment		347,659		16,590		127,469		84,958		490		4,922		1,995				584,083
Total loans	$	354,338	$	16,913	$	129,846	$	93,671	$	490	$	4,922	$	1,995			$	602,175

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, 2016:

	One- to-four  family  residential		Multi-family  residential		Commercial real  estate		Construction  and land  development		Commercial  business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,627		137		859		316		1		21		10		298		3,269
Total ending allowance balance	$	1,627	$	137	$	859	$	316	$	1	$	21	$	10	$	298	$	3,269
Loans:
Individually evaluated for impairment	$	5,553	$	335	$	3,154	$	10,288	$	99	$	-	$	-			$	19,429
Collectively evaluated for impairment		227,978		12,143		76,705		11,551		-		3,286		799				332,462
Total loans	$	233,531	$	12,478	$	79,859	$	21,839	$	99	$	3,286	$	799			$	351,891

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction, multi-family, commercial real estate and commercial business loans, all loans and leases more than 90 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 June 30, 2017, 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	$	-	$	-	$	6,679	$	6,679	$	6,908
Multi-family residential		-		-		323		323		323
Commercial real estate		-		-		2,377		2,377		2,377
Construction and land development		-		-		8,713		8,713		10,532
Total impaired loans	$	-	$	-	$	18,092	$	18,092	$	20,140

The following table presents impaired loans by class as of September 30, 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	$	-	$	-	$	5,553	$	5,553	$	5,869
Multi-family residential		-		-		335		335		335
Commercial real estate		-		-		3,154		3,154		3,154
Construction and land development		-		-		10,288		10,288		10,288
Commercial loans		-		-		99		99		99
Total impaired loans	$	-	$	-	$	19,429	$	19,429	$	19,745

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

	Three Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
		(Dollars in Thousands)
One-to-four family residential	$	5,965	$	12	$	34
Multi-family residential		326		6		-
Commercial real estate		2,801		6		-
Construction and land development		9,607		-		-
Total impaired loans	$	18,699	$	24	$	34

	Three Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,052	$	14	$	30
Multi-family residential		341		6		-
Commercial real estate		3,595		35		-
Construction and land development		9,808		-		-
Total impaired loans	$	18,796	$	55	$	30

	Nine Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,280	$	59	$	91
Multi-family residential		329		17		-
Commercial real estate		2,938		41		12
Construction and land development		10,399		-		-
Total impaired loans	$	18,946	$	117	$	103

	Nine Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,978	$	89	$	78
Multi-family residential		346		18		-
Commercial real estate		3,667		74		12
Construction and land development		9,432		-		62
Total impaired loans	$	18,423	$	181	$	152

Federal regulations and our loan 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 three aforementioned categories but possess weaknesses are required to be designated “special mention.”

The following tables present the classes of the loan portfolio in which a formal risk rating 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.

	June 30, 2017
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,645	$	1,951	$	3,596
Multi-family residential		16,590		-		323		16,913
Commercial real estate		126,656		1,458		1,732		129,846
Construction and land development		84,958		-		8,713		93,671
Commercial business		490		-		-		490
Total loans	$	228,694	$	3,103	$	12,719	$	244,516

	September 30, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,681	$	1,212	$	2,893
Multi-family residential		12,144		-		334		12,478
Commercial real estate		76,185		943		2,731		79,859
Construction and land development		11,551		-		10,288		21,839
Commercial business		99		-		-		99
Total loans	$	99,979	$	2,624	$	14,565	$	117,168

The Company evaluates the classification of one-to-four family residential, leases 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 or consumer loan, the loan is downgraded following the above definitions of special mention, substandard, doubtful and loss.

The following tables represent 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 tables are those loans greater than 90 days past due as to principal and/or interest that do not have a designated risk rating.

	June 30, 2017
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	344,967	$	5,775	$	350,742
Leases		4,922		-		4,922
Consumer		1,995		-		1,995
Total residential and consumer loans	$	351,884	$	5,775	$	357,659

	September 30, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	226,394	$	4,244	$	230,638
Leases		3,286		-		3,286
Consumer		799		-		799
Total residential and consumer loans	$	230,479	$	4,244	$	234,723

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:

	June 30, 2017
							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	$	349,359	$	1,910	$	3,069	$	-	$	1,910	$	354,338	$	5,775
Multi-family residential		16,913		-		-		-		-		16,913
Commercial real estate		128,035		465		1,346		-		465		129,846		1,603
Construction and land development		84,958		-		8,714		-		-		93,671		8,714
Commercial business		490		-		-		-		-		490		-
Leases		4,922		-		-		-		-		4,922		-
Consumer		1,936		59		-		-		59		1,995		-
Total loans	$	586,613	$	2,434	$	13,129	$	-	$	2,434	$	602,175	$	16,092

	September 30, 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	$	228,904	$	1,860	$	2,767	$	-	$	1,860	$	233,531	$	4,244
Multi-family residential		12,478		-		-		-		-		12,478		-
Commercial real estate		78,513		-		1,346		-		-		79,859		1,346
Construction and land development		11,551		-		10,288		-		-		21,839		10,288
Commercial business		99		-		-		-		-		99		-
Leases		3,286		-		-		-		-		3,286		-
Consumer		799		-		-		-		-		799		-
Total loans	$	335,630	$	1,860	$	14,401	$	-	$	1,860	$	351,891	$	15,878

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 the sale of the properties, potentially reducing both the borrower’s ability to make required payments as well as reducing the value of the collateral properties. 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 to allow completion of the project. 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 tables summarize the primary segments of the allowance for loan losses. Activity in the allowance is presented for the both three and nine month periods ended June 30, 2017 and 2016:

	Three Months Ended June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial Business		Leases			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at March 31, 2017	$	1,350		$	122	$	862	$	1,035		$	-	$	28		$	135		$	364	$	3,896
Charge-offs		-			-		-		-			-		-			-			-		-
Recoveries		132			-		-		-			-		-			-			-		132
Provision		(241	)		36		362		(24	)		4		(1	)		(111	)		5		30
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27		$	24		$	369	$	4,058

	Nine Months Ended June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial business		Leases		Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2016	$	1,627		$	137	$	859	$	316		$	1	$	21	$	10		$	298	$	3,269
Charge-offs		(113	)		-		-		(1,819	)		-		-		(16	)		-		(1,948	)
Recoveries		157			-		-		-			-		-		-			-		157
Provision		(430	)		21		365		2,514			3		6		30			71		2,580
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27	$	24		$	369	$	4,058

	Three Months Ended June 30, 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 March 31, 2016	$	1,511		$	43	$	428	$	773	$	7	$	276	$	3,038
Charge-offs		-			-		-		-		-		-		-
Recoveries		81			-		-		-		-		-		81
Provision		(147	)		19		236		4		2		36		150
ALLL balance at June 30, 2016	$	1,445		$	62	$	664	$	777	$	9	$	312	$	3,269

	Nine Months Ended June 30, 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		93			-			32		-		-		-		125
Provision		(272	)		(4	)		401		53		4		43		225
ALLL balance at June 30, 2016	$	1,445		$	62		$	664	$	777	$	9	$	312	$	3,269

The Company recorded a provision for loan losses in the amount of $30,000 and $2.6 million, respectively, for the three and nine months ended June 30, 2017. The level of the provision for loan losses for the nine months ended June 30, 2017 was primarily due to a $1.9 million charge-off related to a borrower (discussed below) whose primary project financed currently by the Bank involves the proposed development of 169 residential lots. The Bank and the borrower are in litigation and no resolution of the situation has been arrived at as of June 30, 2017 hereof in part due to the bankruptcy filing by the borrower effected in June 2017. In light of the status of both the litigation as well as the progress of construction of the project, the Company recorded a $1.9 million non-cash charge-off during the quarter ended March 31, 2017. The remaining portion of the provision recorded during the nine-months ended June 30, 2017 was related to an increase in the outstanding balance of loans. For both the three and nine month period ended June 30, 2017, the provision allocation was effected due to the increased balance of commercial real estate loans which generally have a slightly higher level of inherent risk, compared to single-family residential loans. The loans acquired from Polonia Bancorp initially did not have any impact on the allowance for loan losses, because they were acquired at their fair value. Any write-downs to fair value were reflected in the one-time merger-related charge. In the event that the credit quality of any loans acquired from Polonia Bancorp credit should deteriorate in the future, additional provisions may be required.

At June 30, 2017, the Company had nine loans aggregating $6.1 million that were classified as troubled debt restructurings (“TDRs”). Three of such loans aggregating $4.9 million were designated non-performing as of June 30, 2017; one of such loans in the amount of $1.4 million has continued to make payments in accordance with the restructured terms, but management continues to have concerns over the borrower’s ability to make future payments and as a result has determined to not return the loan to performing status. The remaining two TDRs classified non-accrual totaling $3.5 million are a part of one of the Bank’s largest borrowing relationships totaling $8.9 million (after taking into account the $1.9 million write-down recognized during the quarter ending March 31, 2017). The primary project of the borrower is the subject of litigation between the Bank and the borrower and as a result, the project is currently not proceeding. The borrower has recently filed for bankruptcy under Chapter 11. The Company has removed the underlying litigation noted above between the borrower from state court to the federal bankruptcy court. The remaining six TDRs have performed in accordance with the terms of their revised agreements and have been placed on accruing status. As of June 30, 2017, the Company had reviewed $18.1 million of loans for possible impairment of which $12.7 million was classified substandard compared to $19.4 million reviewed for possible impairment and $14.6 million of which was classified substandard as of September 30, 2016.

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DEPOSITS

9 Months Ended

Jun. 30, 2017

Deposits [Abstract]

DEPOSITS

6. DEPOSITS

Deposits consist of the following major classifications:

	June 30,					September 30,
	2017					2016
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	81,211		13.2	%	$	55,552		14.3	%
Interest-bearing checking accounts		54,574		8.9			34,984		9.3
Non interest-bearing checking accounts		9,569		1.6			3,804		0.7
Passbook, club and statement savings		104,446		17.0			70,924		18.2
Certificates maturing in six months or less		123,656		20.1			97,418		25.0
Certificates maturing in more than six months		241,390		39.2			126,519		32.5
Total	$	614,846		100.0	%	$	389,201		100.0	%

Certificates of $250,000 and over totaled $24.6 million as of June 30, 2017 and $17.0 million as of September 30, 2016.

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ADVANCES FROM FEDERAL HOME LOAN BANK

9 Months Ended

Jun. 30, 2017

Advances from Federal Home Loan Banks [Abstract]

ADVANCES FROM FEDERAL HOME LOAN BANK

7. ADVANCES FROM FEDERAL HOME LOAN BANK

Short-Term

The following table reflects the outstanding balances and related information for short-term borrowings (less than one year) from the Federal Home Loan Bank of Pittsburgh, (“FHLB”).

	Three Months			Nine Months
	Ended			Ended
	June 30, 2017			June 30, 2017
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			21,667
Maximum month-end balance		20,000			35,000
Weight-average rate at period end		1.25	%		1.25	%
Weight-average rate during the period		1.12	%		0.80	%

	Three Months			Nine Months
	Ended			Ended
	June 30, 2016			June 30, 2016
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			20,000
Maximum month-end balance		20,000			20,000
Weight-average rate at period end		0.56	%		0.56	%
Weight-average rate during the period		0.56	%		0.56	%

As of June 30, 2017, $20.0 million of the outstanding balance is related to two $10.0 million 30 day FHLB advances associated with an interest rate swap contract with a weighted average effective cost of 117 basis points.

Average balances outstanding during the periods presented represent daily average balance and interest rates represent interest expense divided by the related average balance.

The Bank maintains borrowing facilities with the FHLB and Federal Reserve Bank of Philadelphia and the interest rate will be based on market rates that are available on the date of execution.

Long-Term

Pursuant to collateral agreement with the FHLB, advances are secured by a blanket pledge of qualifying loans held by the Bank and qualifying fixed-income securities and FHLB stock. The long-term advances outstanding as of June 30, 2017 are as follows:

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate - Advances	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate - Amortizing	1-Dec-17		1,009		1.16	%	Not Applicable
Fixed Rate - Advances	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,045		2.53	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,031		2.13	%	Not Applicable
Fixed Rate - Advances	20-Jun-18		3,015		1.86	%	Not Applicable
Fixed Rate - Advances	25-Jun-18		3,022		2.09	%	Not Applicable
Fixed Rate - Advances	27-Aug-18		7,223		4.15	%	Not Applicable
Fixed Rate - Advances	15-Nov-18		3,017		1.89	%	Not Applicable
Fixed Rate - Advances	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate - Advances	26-Nov-18		2,010		1.81	%	Not Applicable
Fixed Rate - Advances	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate - Advances	16-Aug-19		3,063		2.66	%	Not Applicable
Fixed Rate - Advances	9-Oct-19		2,038		2.53	%	Not Applicable
Fixed Rate - Amortizing	18-Nov-19		3,363		1.53	%	Not Applicable
Fixed Rate - Advances	26-Nov-19		3,047		2.35	%	Not Applicable
Fixed Rate - Advances	22-Jun-20		3,068		2.60	%	Not Applicable
Fixed Rate - Advances	24-Jun-20		2,059		2.85	%	Not Applicable
Fixed Rate - Advances	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate - Advances	17-Aug-20		2,073		3.06	%	Not Applicable
Fixed Rate - Advances	9-Oct-20		2,066		2.92	%	Not Applicable
Fixed Rate - Advances	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate - Advances	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate - Advances	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate - Advances	19-Aug-21		249		1.55	%	Not Applicable
Fixed Rate - Advances	7-Oct-21		2,095		3.19	%	Not Applicable
Fixed Rate - Advances	12-Oct-21		2,089		3.23	%	Not Applicable
Fixed Rate - Advances	6-Jun-22		10,000		2.05	%	Not Applicable
		$	88,078		2.19	%	(a)

(a) Weighted average coupon rate.

The long-term advances outstanding as of September 30, 2016 are as follows:

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate -Advance	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		2,511		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		4,382		1.53	%	Not Applicable
Fixed Rate -Advance	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate -Advance	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate -Advance	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate -Advance	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate -Advance	19-Aug-21		249		1.55	%	Not Applicable
		$	30,638		1.34	%	(a)
(a) Weighted average coupon rate.

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DERIVATIVES

9 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

8. DERIVATIVES

The Company has contracted with a third party to participate in pay-fixed interest rate swap contracts. The amount of swaps outstanding at June 30, 2017 is being utilized to hedge $20. million in floating-rate debt consisting solely of FHLB advances.

Below is a summary of the interest rate swap agreements and the terms there of as of June 30, 2017.

	June 30, 2017
	Notional		Pay			Receive	Maturity	Unrealized
	Amount		Rate			Rate	Date	Gain
	(Dollars in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	214
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		221
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		64
								$	499

All three interest rate swaps are carried at fair value in accordance with FASB ASC 815 "Derivatives and Hedging."

Below is a summary of the interest rate swap agreements and the terms as of September 30, 2016. They are the same swap agreements that were in force as of June 30, 2017.

	September 30, 2016
	Notinal  Amount		Pay  Rate			Receive  Rate	Maturity  Date	Unrealized Loss
						(Dollar in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	(92	)
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		(103	)
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		(7	)
								$	(202	)

All three interest swaps are carried at fair value in accordance with FASB ASC 815 “Derivatives and Hedging.”

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INCOME TAXES

9 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

INCOME TAXES

9. INCOME TAXES

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

	June 30,			September 30,
	2017			2016
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,647		$	1,289
Nonaccrual interest		286			163
Accrued vacation		12			13
Capital loss carryforward		387			378
Split dollar life insurance		18			18
Post-retirement benefits		97			96
Other real estate owned		3			-
Unrealized losses on available for sale securities		524			-
Goodwill		2,729			-
Purchase accounting (Polonia Bancorp)		935			-
Unrealized losses on interest rate swaps		-			69
Employee benefit plans		327			434
Total deferred tax assets		6,965			2,460
Valuation allowance		(387	)		(378	)
Total deferred tax assets, net of valuation allowance		6,578			2,082
Deferred tax liabilities:
Property		393			423
Unrealized gains on available for sale securities		-			500
Section 481(a) Adjustment		-			12
Unrealized gains on interest rate swaps		170			-
Deferred loan fees		534			578
Total deferred tax liabilities		1,097			1,513
Net deferred tax assets	$	5,481		$	569

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 fully 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 recognized over a five year period, resulting in the establishment of a valuation allowance for the carryforward period. The valuation allowance totaled $387,000 at June 30, 2017 and $378,000 at September 30, 2016.

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, 2014 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

9 Months Ended

Jun. 30, 2017

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

STOCK COMPENSATION PLANS

10. STOCK COMPENSATION PLANS

As of December 31, 2016, the Boards of Directors of the Company and the Bank voted to terminate the Bank’s employee stock ownership plan (“ESOP”) effective December 31, 2016. The Company has submitted the proper notices with the Internal Revenue Service and is awaiting receipt of a determination letter in connection with the termination of the ESOP before the final allocation is made to the individual participants. The Bank maintained the ESOP for substantially for the benefit all its full-time employees. The ESOP purchased 427,057 shares of common stock for an aggregate cost of approximately $4.5 million in fiscal 2005 in connection with the Bank’s mutual holding company reorganization. The ESOP purchased in connection with the second-step conversion of the Bank an additional 255,564 shares during December 2013 and an additional 30,100 shares at the beginning of 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 two 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 upon release differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. As of June 30, 2017, the ESOP held 394,156 shares of which a total of 243,734 shares were allocated to participants, 303,115 shares were used to payoff the remaining $5.2 million balance the two loans used to fund the ESOP plan and released an additional 35,517 shares as of December 31, 2016. For the nine months ended June 30, 2017 and 2016, the Company recognized $139,000 (which was recorded during the first quarter of the current period) and $384,000, respectively, in compensation expense related to the ESOP. In connection with the termination of the ESOP, the ESOP was required to repay the outstanding indebtness the collateral held in the suspense account. Approximately 115,000 unallocated shares will be allocated to eligible participants upon approval by the Internal Revenue Service.

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 2008 RRP purchased 213,528 shares of the Company’s common stock in the open market for an aggregating cost of approximately $2.5 million, at an average purchase price per share of $11.49. The Company made sufficient contributions to the 2008 RRP to fund these purchases. As of June 30, 2017, all the shares 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 of common stock can be awarded as restricted stock awards or units, of which 233,500 shares were awarded during February 2015 of which 53,462 shares have been forfeited as of June 30, 2017. In August 2016, the Company granted 7,473 shares under the 2008 RRP and 3,027 shares under the 2014 SIP. In March 2017, the Company granted 17,128 shares under the 2014 SIP.

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 nine months ended June 30, 2017, an aggregate of $149,000 and $430,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $51,000 and $146,000, was recognized for the three and nine months ended June 30, 2017, respectively. During the three and nine months ended June 30, 2016, $87,000 and $329,000 was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. An income tax benefit of $30,000 and $112,000 was recognized for the three and nine months ended June 30, 2016. At June 30, 2017, approximately $1.2 million in additional compensation expense for shares awarded related to the 2008 RRP and 2014 SIP remained unrecognized. The weighted average period over which this expense will be recognized is approximately 3.1 years.

A summary of the Company’s non-vested stock award activity for the nine months ended June 30, 2017 and 2016 is presented in the following tables:

	Nine Months Ended June 30, 2017
	Number of  Shares (1)			Weighted Average  Grant Date Fair  Value
Nonvested stock awards at October 1, 2016		172,788		$	12.03
Granted		17,128			17.43
Forfeited		-			-
Vested		(43,755	)		11.59
Nonvested stock awards at the June 30, 2017		146,161		$	12.78

	Nine Months Ended June 30, 2016
	Number of  Shares			Weighted Average  Grant Date Fair  Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Granted		-			-
Forfeited		(30,180	)		11.55
Vested		(55,279	)		11.59
Nonvested stock awards at the June 30, 2016		155,969		$	11.83

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 of common stock were approved for future issuance pursuant to the 2008 Option Plan. As of June 30, 2017, all of the options had been awarded under the 2008 Option Plan. As of June 30, 2017, 467,758 options 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. During August 2016, the Company granted 18,866 shares under the 2008 Option Plan and 8,634 shares under the 2014 SIP. In March 2017, the Company granted 22,828 shares under the 2014 SIP. In May 2017, the Company granted 25,000 shares under the 2014 SIP.

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP for the nine months ended June 30, 2017 and 2016 are presented below:

	Nine Months Ended June 30, 2017
	Number of  Shares			Weighted Average  Exercise Price
Outstanding at October 1, 2016		921,909		$	11.70
Granted		47,828			17.48
Exercised		(40,757	)		11.48
Forfeited		-			-
Outstanding at  June 30, 2017		928,980		$	11.85
Exercisable at June 30, 2017		552,435		$	11.43

	Nine Months Ended June 30, 2016
	Number of  Shares			Weighted Average  Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(89,358	)		11.61
Forfeited		(80,476	)		11.52
Outstanding at June 30, 2016		904,596		$	11.99
Exercisable at June 30, 2016		489,679		$	11.45

The weighted average remaining contractual term was approximately 4.5 years for options outstanding as of June 30, 2017.

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, $4.58 for options granted during fiscal 2015, $2.13 for options granted during fiscal 2016, and $3.18 for options granted during fiscal 2017. 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 of 0.98%. The fair value for grants made in fiscal 2016 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $14.42, expected term of seven years, volatility of 13.82%, interest rate of 1.36% and a yield of 0.80%. The fair value for grants made in March and May 2017 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value of $17.43, expected term of seven years, volatility of 14.4%, interest rate of 2.22% and a yield of 0.69%.

During the three and nine months ended June 30, 2017, $139,000 and $397,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. A tax benefit of $17,000 and $49,000 was recognized for the three and nine months ended June 30, 2017, respectively. During the three and nine months ended June 30, 2016, $106,000 and $322,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. A tax benefit of $36,000 and $44,000, respectively, was recognized for the three and nine months ended June 30, 2016.

At June 30, 2017, there was approximately $1.5 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 3.2 years.

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COMMITMENTS AND CONTINGENT LIABILITIES

9 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

11. COMMITMENTS AND CONTINGENT LIABILITIES

At June 30, 2017, the Company had $34.7 million in outstanding commitments to originate fixed-rate and variable-rate loans with market interest rates ranging from 4.00% to 5.50%. At September 30, 2016, the Company had $9.9 million in outstanding commitments to originate fixed-rate loans with market interest rates ranging from 3.75% to 5.0%. The aggregate undisbursed portion of loans-in-process amounted to $50.8 million at June 30, 2017 and $5.4 million at September 30, 2016.

The Company also had commitments under unused lines of credit of $8.9 million as of June 30, 2017 and $3.3 million as of September 30, 2016 and letters of credit outstanding of $1.5 million as of June 30, 2017 and $1.9 million as of September 30, 2016.

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 June 30, 2017, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $1.8 million related to loans sold to the FHLB. This exposure is for the life of the related loans and payables, on our proportionate share, as actual losses are incurred. These loans are seasoned loans and remain performing.

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

9 Months Ended

Jun. 30, 2017

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

12. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of June 30, 2017 and September 30, 2016, 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 June 30, 2017 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	$	-	$	20,620	$	-	$	20,620
Mortgage-backed securities - U.S. Government agencies		-		125,715		-		125,715
Corporate bonds		-		37,045		-		37,045
FHLMC preferred stock		59		-		-		59
Interest rate swap contracts		-		499		-		499
Total	$	59	$	183,879	$	-	$	183,938

Those assets as of September 30, 2016 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	$	-	$	21,024	$	-	$	21,024
Mortgage-backed securities - U.S. Government agencies		-		91,575		-		91,575
Corporate bonds		-		26,053		-		26,053
FHLMC preferred stock		42		-		-		42
Total	$	42	$	138,652	$	-	$	138,694
Liabilities:
Interest rate swap contracts	$	-	$	202	$	-	$	202
Total	$	-	$	202	$	-	$	202

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 (principle and interest) 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 $18.0 million as of June 30, 2017 and $19.4 million as of September 30, 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. As a result, 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 June 30, 2017
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,092	$	18,092
Real estate owned		-		-		192		192
Total	$	-	$	-	$	18,284	$	18,284

	At September 30, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	19,429	$	19,429
Real estate owned		-		-		581		581
Total	$	-	$	-	$	20,010	$	20,010

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 June 30, 2017
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,092	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 10% discount/10%
Real estate owned	$	581	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	19,429	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 46% discount/10%
Real estate owned	$	581	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
					June 30, 2017
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	22,927	$	22,927	$	22,927	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		183,439		183,439		59		183,380		-
Investment and mortgage-backed securities held to maturity		59,654		58,570		-		58,570		-
Loans receivable, net		544,422		548,697		-		-		548,697
Accrued interest receivable		3,089		3,089		3,089		-		-
Other real estate owned		192		192		192		-		-
Federal Home Loan Bank stock		5,767		5,767		5,767		-		-
Bank owned life insurance		27,877		27,877		27,877		-		-
Interest rate swap contracts		499		499		-		499		-
Liabilities:
Checking accounts		64,143		64,143		64,143		-		-
Money market deposit accounts		81,211		81,211		81,211		-		-
Passbook, club and statement savings accounts		104,446		104,446		104,446		-		-
Certificates of deposit		365,046		360,527		-		-		360,527
Accrued interest payable		1,339		1,339		1,339		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		88,078		87,372		-		-		87,372
Advances from borrowers for taxes and insurance		3,982		3,982		3,982		-		-

					Fair Value Measurements at
					September 30, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	12,440	$	12,440	$	12,440	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		138,694		138,694		42		138,652		-
Investment and mortgage-backed securities held to maturity		39,971		40,700		-		40,700		-
Loans receivable, net		344,948		344,100		-		-		344,100
Accrued interest receivable		1,928		1,928		1,928		-		-
Federal Home Loan Bank stock		2,463		2,463		2,463		-		-
Bank owned life insurance		13,055		13,055		13,055		-		-
Liabilities:
Checking accounts		38,788		38,788		38,788		-		-
Money market deposit accounts		55,552		55,552		55,552		-		-
Passbook, club and statement savings accounts		70,924		70,924		70,924		-		-
Certificates of deposit		223,937		225,383		-		-		225,383
Accrued interest payable		1,403		1,403		1,403		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		30,638		30,222		-		-		30,222
Advances from borrowers for taxes and insurance		1,748		1,748		1,748		-		-
Interest rate swap contracts		202		202		-		202		-

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.

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

Long-term 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.

Interest rate swaps – The fair values of the interest rate swap contracts are based upon the estimated amount the Company would receive or pay, as applicable, to terminate the contracts.

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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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

13. GOODWILL AND OTHER INTANGIBLE ASSETS

The Company’s goodwill and intangible assets are related to the acquisition of Polonia Bancorp on January 1, 2017.

	Balance							Balance
	October 1,		Additions/					June 30,		Amortization
	2016		Adjustments		Amortization			2017		Period
Goodwill	$	-	$	7,163	$	-		$	7,163
Core deposit intangible		-		822		(75	)		747	10 years
	$	-	$	7,985	$	(75	)	$	7,910

As of June 30, 2017, the current fiscal year and the future fiscal periods amortization expense for the core deposit intangible is:

(In thousands)
2017	$	37
2018		138
2019		123
2020		108
Thereafter		341

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BUSINESS COMBINATIONS

9 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

BUSINESS COMBINATIONS

14. BUSINESS COMBINATIONS

On January 1, 2017, the previously announced proposed acquisition (the “Merger”) of Polonia Bancorp pursuant to the Agreement of Plan of Merger by and between Polonia Bancorp and the Company, dated as of June 2, 2016 (the “ Merger Agreement”) was completed. The shareholders of Polonia Bancorp had the option to receive $11.09 per share in cash or 0.7460 of a share of the Company common stock for each share of Polonia Bancorp common stock held thereby, subject to allocation provisions to assure that, in the aggregate, Polonia Bancorp shareholders received total merger consideration that consisted of 50% stock and 50% cash. As a result of Polonia Bancorp shareholder stock and cash elections and the related proration provisions of the Merger Agreement, the Company issued 1,274,197 shares of its common stock and approximately $18.9 million was paid in cash for the Merger.

In connection with the Merger, the consideration paid and the estimated fair value of identifiable assets and liabilities assumed as of the date of the Merger are summarized in the following table:

(dollars in thousands)
Consideration paid:
Common stock issued (1,274,197 shares) at a fair value per share of $17.12 per share.	$	21,814
Cash for common stock exchanged		18,944
Cash in lieu of fractional shares		1
		40,759
Assets acquired:
Cash and due from banks		47,901
Investments available for sale		42,164
Loans		160,157
Premises and equipment		6,902
Deferred taxes		3,921
Bank-owned life insurance		4,316
Core deposit intangible		822
Other assets		5,802
Total assets		271,985
Liabilities assumed:
Deposits		172,243
FHLB advances, short-term		7,000
FHLB advances, long -term		50,232
Other liabilities		8,914
Total liabilities		238,389
Net assets acquired		33,596
Goodwill resulting from the acquisition	$	7,163

The following table summarizes the estimated fair value of the assets acquired and the liabilities assumed as of the date of acquisition of Polonia Bancorp. The core deposit intangible will be amortized over a 10 years using an accelerated method. Goodwill will not be amortized, but instead will be evaluated for impairment.

(Dollars in thousands, except per share data)
Purchase Consideration
Polonia Common Stock:
Total shares of common stock outstanding		3,416,311
Common stock issued cap		1,708,155
Shares redeemed for cash cap		1,708,156
Prudential common stock issued (conversion rate 0.7460)		1,274,197
Prudential closing price at December 31, 2016	$	17.12
Cash-out rate paid per share for Polonia Bancorp common stock	$	11.09
Purchase consideration assigned to Polonia Bancorp shares exchanged for Company Common Stock	$	21,814
Cash Paid to Polonia for Polonia Bancorp shares	$	18,944
Cash Paid for fractional shares	$	1
	$	40,759
Net Assets Acquired
Polonia Bancorp stockholders' equity		35,412
Core deposit intangible assets		822
Estimated adjustments to reflect assets acquired at fair value:
Investment securities		(781	)
Portfolio loans		(4,643	)
Allowance for loan and lease losses		1,002
Premises		3,049
Other Assets		(73	)
Deferred Taxes		934
Total fair value adjustment to assets acquired		310
Estimated adjustments to reflect liabilities assumed at fair value:
Time deposits		894
Borrowings		1,232
Total fair value adjustment to liabilities assumed		2,126
Total net assets acquired		33,596
Goodwill resulting from merger		7,163

Pro Forma Income Statements

The following pro forma income statements for the three and nine months ended June 30, 2017 and 2016 presents pro forma results of operations of the combined institution (Polonia Bancorp and the Company) had the merger occurred on April 1, 2017 and 2016. The pro forma income statement adjustments are limited to the effects of fair value mark amortization and accretion and intangible asset amortization. No cost savings or additional merger expenses have been included in the pro forma results of operations for the three and nine months ended June 30, 2017 and 2016.

	Unaudited
	Three Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		6,053		5,681
Provision for loan and leases losses		30		150
Net interest income after provision for loan and lease losses		6,023		5,531
Non-interest income		625		721
Non-interest expenses		3,500		5,156
Income before income taxes		3,148		1,096
Income tax expense		1,031		318
Net income		2,117		778
Per share data
Weighed average basic shares outstanding		8,652,699		8,655,077
Dilutive shares		656,370		270,973
Adjusted weighted-average dilutive shares		9,309,069		8,926,050
Basic earnings per common share	$	0.25	$	0.09
Dilutive earnings per common share	$	0.25	$	0.09

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the Merger. The dilutive shares reflect the Company’s estimated diluted shares for the period.

	Unaudited
	Nine Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		14,998		17,648
Provision for loan and leases losses		2,580		225
Net interest income after provision for loan and lease losses		12,418		17,423
Non-interest income		1,500		2,134
Non-interest expenses		12,981		17,582
Income before income taxes		937		1,975
Income tax expense		230		704
Net income		707		1,271
Per share data
Weighed average basic shares outstanding		8,202,850		8,655,077
Dilutive shares		570,792		246,791
Adjusted weighted-average dilutive shares		8,773,642		8,901,868
Basic earnings per common share	$	0.08	$	0.10
Dilutive earnings per common share	$	0.08	$	0.10

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the merger. The dilutive shares reflect the Company’s estimated diluted shares for the period

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Jun. 30, 2017

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 nine months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2017, or any other period. These financial statements should be read in conjunction with the audited consolidated financial statements of the Company and the accompanying notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2016.

Use of Estimates in the Preparation of Financial Statements

Use of Estimates in the Preparation of 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, goodwill and intangible assets, 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 at such date 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 (“2008 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 will not receive any dividends declared on the common stock subject to the award prior to the date the shares are 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 nine month period ended June 30, 2017, the Company repurchased 303,115 shares of common stock of unallocated shares held in a suspense account by the Bank’s ESOP as collateral with an aggregate value of $5.2 million in order to payoff the associated loans that were terminated as of December 31, 2016 in connection with the termination of the Bank’s ESOP. In addition, 42,791 shares of common stock were purchased in conjunction with the termination of the Polonia Bank ESOP as a result of the acquisition. The remaining shares purchased were related to the Company buying shares for the benefit of the employee stock benefits plans.

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 June 30, 2017.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09, Revenue from Contracts with Customers (a new revenue recognition standard). The ASU’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 ASU specifies the accounting for certain costs to obtain or fulfill a contract with a customer and expands disclosure requirements for revenue recognition. This ASU was to be effective for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period; the effective date was deferred by a year discussed below. Because the guidance does not apply to revenue associated with financial instruments, including loans and securities, we do not expect the new standard, or any of the amendments, to result in a material change from our current accounting for revenue because the majority of the Company's financial instruments are not within the scope of Topic 606.  However, we do expect that the standard will result in new disclosure requirements, which are currently being evaluated.

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 ASU 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 ASU (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 ASU 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 ASU 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 ASU 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 and/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. The Company is currently assessing the practical expedients it may elect at adoption, but does not anticipate the amendments will have a significant impact on the financial statements. Based on the Company’s preliminary analysis of its current portfolio, the impact to the Company’s balance sheet is estimated to result in less than a 1 percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In March 2016, the FASB issued ASU 2016-05, Derivatives and Hedging (Topic 815). The amendments in this ASU apply to all reporting entities for which there is a change in the counterparty to a derivative instrument that has been designated as a hedging instrument under Topic 815. The standards in this ASU 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 ASU 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 August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses eight specific cash flow issues with the objective of reducing diversity in practice. Among these include recognizing cash payments for debt prepayment or debt extinguishment as cash outflows for financing activities; cash proceeds received from the settlement of insurance claims should be classified on the basis of the related insurance coverage; and cash proceeds received from the settlement of bank-owned life insurance policies should be classified as cash inflows from investing activities while the cash payments for premiums on bank-owned policies may be classified as cash outflows for investing activities, operating activities, or a combination of investing and operating activities. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity that elects early adoption must adopt all of the amendments in the same period. The amendments in this ASU should be applied using a retrospective transition method to each period presented. If it is impracticable to apply the amendments retrospectively for some of the issues, the amendments for those issues would be applied prospectively as of the earliest date practicable. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740), which requires recognition of current and deferred income taxes resulting from an intra-entity transfer of any asset (excluding inventory) when the transfer occurs. Consequently, the amendments in this ASU eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those annual reporting periods. For all other entities, the amendments are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual periods beginning after December 15, 2019. Early adoption is permitted for all entities as of the beginning of an annual reporting period for which financial statements (interim or annual) have not been issued or made available for issuance. That is, earlier adoption should be in the first interim period if an entity issues interim financial statements. The amendments in this ASU should be applied on a modified retrospective basis through a cumulative-effect adjustment directly to the amount of retained earnings as of the beginning of the period of adoption. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-17, Consolidation (Topic 810), which amends the consolidation guidance on how a reporting entity that is the single decision maker of a VIE should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE. A reporting entity has an indirect interest in a VIE if it has a direct interest in a related party that, in turn, has a direct interest in the VIE. Under the amendments, a single decision maker is not required to consider indirect interests held through related parties that are under common control with the single decision maker to be the equivalent of direct interests in their entirety. Instead, a single decision maker is required to include those interests on a proportionate basis consistent with indirect interests held through other related parties. This ASU is not expected to have a significant impact on the Company’s financial statements.

In October 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that a statement of cash flows explains the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in this Update should be applied using a retrospective transition method to each period presented. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s statement of cash flows.

In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business, which provides a more robust framework to use in determining when a set of assets and activities (collectively referred to as a “set”) is a business. The screening process requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. This screen reduces the number of transactions that need to be further evaluated. Public business entities should apply the amendments in this ASU to annual periods beginning after December 15, 2017, including interim periods within those periods. All other entities should apply the amendments to annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The amendments in this ASU should be applied prospectively on or after the effective date. This ASU is not expected to have a significant impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. To simplify the subsequent measurement of goodwill, the FASB eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this Update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. A public business entity that is a U.S. Securities and Exchange Commission (“SEC”) filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. A public business entity that is not an SEC filer should adopt the amendments in this Update for its annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2020. All other entities, including not-for-profit entities, that are adopting the amendments in this Update should do so for their annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2021. This ASU is not expected to have a significant impact on the Company’s financial statements.

In February 2017, the FASB issued ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20). The amendments in this Update clarify what constitutes a financial asset within the scope of Subtopic 610-20. The amendments also clarify that entities should identify each distinct nonfinancial asset or in-substance nonfinancial asset that is promised to a counterparty and to derecognize each asset when the counterparty obtains control. There is also additional guidance provided for partial sales of a nonfinancial asset and when derecognition, and the related gain or loss, should be recognized. The amendments in this Update are effective at the same time as the amendments in Update 2014-09. Therefore, for public entities, the amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. For all other entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within annual reporting periods beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of this standard will have on the Company’s financial position or results of operations.

In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs (Subtopic 310-20). The amendments in this Update shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. An entity should apply the amendments in this Update on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. Additionally, in the period of adoption, an entity should provide disclosures about a change in accounting principle. 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 July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), and Derivative and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down-round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down-round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down-round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (“EPS”) in accordance with Topic 260 to recognize the effect of the down-round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down- round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260). The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Accounting Standards Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments in Part I of this Update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part I of this Update should be applied either retrospectively to outstanding financial instruments with a down-round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective or retrospectively to outstanding financial instruments with a down-round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

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EARNINGS PER SHARE (Tables)

9 Months Ended

Jun. 30, 2017

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

	Three Months Ended June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	2,117	$	2,117	$	777	$	777
Weighted average shares outstanding		8,652,699		8,652,699		7,330,386		7,330,386
Effect of common stock equivalents		-		656,370		-		200,986
Adjusted weighted average shares used in earnings  per share computation		8,652,699		9,309,069		7,330,386		7,531,372
Earnings per share - basic and diluted	$	0.25	$	0.25	$	0.10	$	0.10

	Nine Months Ended June 30,
	2017				2016
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands Except Per Share Data)
Net income	$	707	$	707	$	1,738	$	1,738
Weighted average shares outstanding		8,202,850		8,202,850		7,442,956		7,442,956
Effect of common stock equivalents		-		570,792		-		210,125
Adjusted weighted average shares used in earnings per share computation		8,202,850		8,773,642		7,442,956		7,653,081
Earnings per share - basic and diluted	$	0.08	$	0.08	$	0.23	$	0.23

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

9 Months Ended

Jun. 30, 2017

Accumulated Other Comprehensive Income [Abstract]

Schedule of changes in accumulated other comprehensive income

	Three Months Ended June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	(1,320	)	$	783
Unrealized gains on available for sale securities		693			255
Unrealized losses on interest rate swaps		(60	)		(106	)
Total other comprehensive income		633			149
Ending Balance	$	(687	)	$	932

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

	Nine Months Ended June 30,
	2017			2016
	(Dollars in Thousands)
	Unrealized gains (losses)			Unrealized gains (losses)
	on available for sale			on available for sale
	securities and interest			securities and interest
	rate swaps (a)			rate swaps (a)
Beginning Balance	$	798		$	18
Unrealized (loss) gains on available for sale securities		(1,948	)		1,020
Unrealized gains (losses) on interest rate swaps.		463			(106	)
Total other comprehensive income (loss)		(1,485	)		914
Ending Balance	$	(687	)	$	932

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

Schedule of amounts reclassified out of each component of accumulated other comprehensive income (loss)

	Three Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income

	Nine Months Ended June 30,
	2017			2016
	Amount Reclassified			Amount Reclassified
	from Accumulated			from Accumulated			Affected Line Item in
	Other			Other			the Statement Where
	Comprehensive			Comprehensive			Net Income is
Details about other comprehensive income	Income (a)			Income (a)			Presented
Unrealized gains on available for sale securities
	$	70		$	161		Gain on sale of securities available for sale
		(24	)		(55	)	Income taxes
	$	46		$	106		Net of tax

(a) Amounts in parentheses indicate debits to net income 

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INVESTMENT AND MORTGAGE-BACKED SECURITIES (Tables)

9 Months Ended

Jun. 30, 2017

Investments, Debt and Equity Securities [Abstract]

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

	June 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,989	$	-	$	(369	)	$	20,620
Mortgage-backed securities - U.S. government agencies		126,912		152		(1,349	)		125,715
Corporate bonds		37,073		271		(299	)		37,045
Total debt securities available for sale		184,974		423		(2,017	)		183,380
FHLMC preferred stock		6		53		-			59
Total securities available for sale	$	184,980	$	476	$	(2,017	)	$	183,439
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	236	$	(1,735	)	$	32,001
Mortgage-backed securities - U.S. government agencies		7,387		347		(29	)		7,705
Municipal bonds		18,767		184		(87	)		18,864
Total securities held to maturity	$	59,654	$	767	$	(1,851	)	$	58,570

	September 30, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	20,988	$	36	$	-		$	21,024
Mortgage-backed securities - U.S. government agencies		90,817		860		(102	)		91,575
Corporate bonds		25,411		661		(19	)		26,053
Total debt securities available for sale		137,216		1,557		(121	)		138,652
FHLMC preferred stock		6		36		-			42
Total securities available for sale	$	137,222	$	1,593	$	(121	)	$	138,694
Securities Held to Maturity:
U.S. government and agency obligations	$	33,499	$	399	$	(129	)	$	33,769
Mortgage-backed securities - U.S. government agencies		6,472		459		-			6,931
Total securities held to maturity	$	39,971	$	858	$	(129	)	$	40,700

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	$	(369	)	$	20,620	$	-		$	-	$	(369	)	$	20,620
Mortgage-backed securities - agency		(1,129	)		81,547		(220	)		11,013		(1,349	)		92,560
Corporate bonds		(299	)		15,987		-			-		(299	)		15,987
Total securities available for sale	$	(1,797	)	$	118,154	$	(220	)	$	11,013	$	(2,017	)	$	129,167
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,735	)	$	28,765	$	-		$	-	$	(1,735	)	$	28,765
Mortgage-backed securities - agency		(29	)		1,216		-			-		(29	)		1,216
Municipal bonds		(87	)		5,836		-			-		(87	)		5,836
Total securities held to maturity	$	(1,851	)	$	35,817	$	-		$	-	$	(1,851	)	$	35,817
Total	$	(3,648	)	$	153,971	$	(220	)	$	11,013	$	(3,868	)	$	164,984

	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:
Mortgage-backed securities - agency	$	(50	)	$	16,498	$	(52	)	$	6,718	$	(102	)	$	23,216
Corporate bonds		(19	)		3,955		-			-		(19	)		3,955
Total securities available for sale	$	(69	)	$	20,453	$	(52	)	$	6,718	$	(121	)	$	27,171
Securities Held to Maturity:
U.S. government and agency obligations	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total securities held to maturity	$	(129	)	$	20,371	$	-		$	-	$	(129	)	$	20,371
Total	$	(198	)	$	40,824	$	(52	)	$	6,718	$	(250	)	$	47,542

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

	June 30, 2017
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	2,867	$	2,794	$	4,048	$	4,066
Due after five through ten years		20,583		20,661		18,748		18,872
Due after ten years		28,817		27,410		35,266		34,727
Total	$	52,267	$	50,865	$	58,062	$	57,665

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LOANS RECEIVABLE (Tables)

9 Months Ended

Jun. 30, 2017

Receivables [Abstract]

Schedule of loans receivable

	June 30,			September 30,
	2017			2016
	(Dollars in Thousands)
One-to-four family residential	$	354,338		$	233,531
Multi-family residential		16,913			12,478
Commercial real estate		129,846			79,859
Construction and land development		93,671			21,839
Commercial business		490			99
Leases		4,922			3,286
Consumer		1,995			799
Total loans		602,175			351,891
Undisbursed portion of loans-in-process		(50,792	)		(5,371	)
Deferred loan fees and (costs)		(2,903	)		1,697
Allowance for loan losses		(4,058	)		(3,269	)
Net loans	$	544,422		$	344,948

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		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,242		158		1,224		1,011		4		27		24		368		4,058
Total ending allowance balance	$	1,242	$	158	$	1,224	$	1,011	$	4	$	27	$	24	$	368	$	4,058
Loans:
Individually evaluated for impairment	$	6,679	$	323	$	2,377	$	8,713	$	-	$	-	$	-			$	18,092
Collectively evaluated for impairment		347,659		16,590		127,469		84,958		490		4,922		1,995				584,083
Total loans	$	354,338	$	16,913	$	129,846	$	93,671	$	490	$	4,922	$	1,995			$	602,175

	One- to-four  family  residential		Multi-family  residential		Commercial real  estate		Construction  and land  development		Commercial  business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,627		137		859		316		1		21		10		298		3,269
Total ending allowance balance	$	1,627	$	137	$	859	$	316	$	1	$	21	$	10	$	298	$	3,269
Loans:
Individually evaluated for impairment	$	5,553	$	335	$	3,154	$	10,288	$	99	$	-	$	-			$	19,429
Collectively evaluated for impairment		227,978		12,143		76,705		11,551		-		3,286		799				332,462
Total loans	$	233,531	$	12,478	$	79,859	$	21,839	$	99	$	3,286	$	799			$	351,891

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	$	-	$	-	$	6,679	$	6,679	$	6,908
Multi-family residential		-		-		323		323		323
Commercial real estate		-		-		2,377		2,377		2,377
Construction and land development		-		-		8,713		8,713		10,532
Total impaired loans	$	-	$	-	$	18,092	$	18,092	$	20,140

					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	$	-	$	-	$	5,553	$	5,553	$	5,869
Multi-family residential		-		-		335		335		335
Commercial real estate		-		-		3,154		3,154		3,154
Construction and land development		-		-		10,288		10,288		10,288
Commercial loans		-		-		99		99		99
Total impaired loans	$	-	$	-	$	19,429	$	19,429	$	19,745

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

	Three Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
		(Dollars in Thousands)
One-to-four family residential	$	5,965	$	12	$	34
Multi-family residential		326		6		-
Commercial real estate		2,801		6		-
Construction and land development		9,607		-		-
Total impaired loans	$	18,699	$	24	$	34

	Three Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,052	$	14	$	30
Multi-family residential		341		6		-
Commercial real estate		3,595		35		-
Construction and land development		9,808		-		-
Total impaired loans	$	18,796	$	55	$	30

	Nine Months Ended June 30, 2017
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,280	$	59	$	91
Multi-family residential		329		17		-
Commercial real estate		2,938		41		12
Construction and land development		10,399		-		-
Total impaired loans	$	18,946	$	117	$	103

	Nine Months Ended June 30, 2016
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,978	$	89	$	78
Multi-family residential		346		18		-
Commercial real estate		3,667		74		12
Construction and land development		9,432		-		62
Total impaired loans	$	18,423	$	181	$	152

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

	June 30, 2017
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,645	$	1,951	$	3,596
Multi-family residential		16,590		-		323		16,913
Commercial real estate		126,656		1,458		1,732		129,846
Construction and land development		84,958		-		8,713		93,671
Commercial business		490		-		-		490
Total loans	$	228,694	$	3,103	$	12,719	$	244,516

	September 30, 2016
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	-	$	1,681	$	1,212	$	2,893
Multi-family residential		12,144		-		334		12,478
Commercial real estate		76,185		943		2,731		79,859
Construction and land development		11,551		-		10,288		21,839
Commercial business		99		-		-		99
Total loans	$	99,979	$	2,624	$	14,565	$	117,168

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

	June 30, 2017
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	344,967	$	5,775	$	350,742
Leases		4,922		-		4,922
Consumer		1,995		-		1,995
Total residential and consumer loans	$	351,884	$	5,775	$	357,659

	September 30, 2016
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	226,394	$	4,244	$	230,638
Leases		3,286		-		3,286
Consumer		799		-		799
Total residential and consumer loans	$	230,479	$	4,244	$	234,723

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

	June 30, 2017
							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	$	349,359	$	1,910	$	3,069	$	-	$	1,910	$	354,338	$	5,775
Multi-family residential		16,913		-		-		-		-		16,913
Commercial real estate		128,035		465		1,346		-		465		129,846		1,603
Construction and land development		84,958		-		8,714		-		-		93,671		8,714
Commercial business		490		-		-		-		-		490		-
Leases		4,922		-		-		-		-		4,922		-
Consumer		1,936		59		-		-		59		1,995		-
Total loans	$	586,613	$	2,434	$	13,129	$	-	$	2,434	$	602,175	$	16,092

	September 30, 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	$	228,904	$	1,860	$	2,767	$	-	$	1,860	$	233,531	$	4,244
Multi-family residential		12,478		-		-		-		-		12,478		-
Commercial real estate		78,513		-		1,346		-		-		79,859		1,346
Construction and land development		11,551		-		10,288		-		-		21,839		10,288
Commercial business		99		-		-		-		-		99		-
Leases		3,286		-		-		-		-		3,286		-
Consumer		799		-		-		-		-		799		-
Total loans	$	335,630	$	1,860	$	14,401	$	-	$	1,860	$	351,891	$	15,878

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 June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial Business		Leases			Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at March 31, 2017	$	1,350		$	122	$	862	$	1,035		$	-	$	28		$	135		$	364	$	3,896
Charge-offs		-			-		-		-			-		-			-			-		-
Recoveries		132			-		-		-			-		-			-			-		132
Provision		(241	)		36		362		(24	)		4		(1	)		(111	)		5		30
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27		$	24		$	369	$	4,058

	Nine Months Ended June 30, 2017
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Commercial business		Leases		Consumer			Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2016	$	1,627		$	137	$	859	$	316		$	1	$	21	$	10		$	298	$	3,269
Charge-offs		(113	)		-		-		(1,819	)		-		-		(16	)		-		(1,948	)
Recoveries		157			-		-		-			-		-		-			-		157
Provision		(430	)		21		365		2,514			3		6		30			71		2,580
ALLL balance at June 30, 2017	$	1,241		$	158	$	1,224	$	1,011		$	4	$	27	$	24		$	369	$	4,058

	Three Months Ended June 30, 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 March 31, 2016	$	1,511		$	43	$	428	$	773	$	7	$	276	$	3,038
Charge-offs		-			-		-		-		-		-		-
Recoveries		81			-		-		-		-		-		81
Provision		(147	)		19		236		4		2		36		150
ALLL balance at June 30, 2016	$	1,445		$	62	$	664	$	777	$	9	$	312	$	3,269

	Nine Months Ended June 30, 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		93			-			32		-		-		-		125
Provision		(272	)		(4	)		401		53		4		43		225
ALLL balance at June 30, 2016	$	1,445		$	62		$	664	$	777	$	9	$	312	$	3,269

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DEPOSITS (Tables)

9 Months Ended

Jun. 30, 2017

Deposits [Abstract]

Schedule of major classifications of deposits

	June 30,					September 30,
	2017					2016
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	81,211		13.2	%	$	55,552		14.3	%
Interest-bearing checking accounts		54,574		8.9			34,984		9.3
Non interest-bearing checking accounts		9,569		1.6			3,804		0.7
Passbook, club and statement savings		104,446		17.0			70,924		18.2
Certificates maturing in six months or less		123,656		20.1			97,418		25.0
Certificates maturing in more than six months		241,390		39.2			126,519		32.5
Total	$	614,846		100.0	%	$	389,201		100.0	%

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ADVANCES FROM FEDERAL HOME LOAN BANK (Tables)

9 Months Ended

Jun. 30, 2017

Advances from Federal Home Loan Banks [Abstract]

Schedule of short-term borrowings from the FHLB

	Three Months			Nine Months
	Ended			Ended
	June 30, 2017			June 30, 2017
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			21,667
Maximum month-end balance		20,000			35,000
Weight-average rate at period end		1.25	%		1.25	%
Weight-average rate during the period		1.12	%		0.80	%

	Three Months			Nine Months
	Ended			Ended
	June 30, 2016			June 30, 2016
	(Dollars in Thousands)
Balance at period-end	$	20,000		$	20,000
Average balance outstanding		20,000			20,000
Maximum month-end balance		20,000			20,000
Weight-average rate at period end		0.56	%		0.56	%
Weight-average rate during the period		0.56	%		0.56	%

Schedule of collateral agreement with the FHLB

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate - Advances	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate - Amortizing	1-Dec-17		1,009		1.16	%	Not Applicable
Fixed Rate - Advances	4-Dec-17		2,000		1.15	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,045		2.53	%	Not Applicable
Fixed Rate - Advances	19-Mar-18		5,031		2.13	%	Not Applicable
Fixed Rate - Advances	20-Jun-18		3,015		1.86	%	Not Applicable
Fixed Rate - Advances	25-Jun-18		3,022		2.09	%	Not Applicable
Fixed Rate - Advances	27-Aug-18		7,223		4.15	%	Not Applicable
Fixed Rate - Advances	15-Nov-18		3,017		1.89	%	Not Applicable
Fixed Rate - Advances	16-Nov-18		7,500		1.40	%	Not Applicable
Fixed Rate - Advances	26-Nov-18		2,010		1.81	%	Not Applicable
Fixed Rate - Advances	3-Dec-18		3,000		1.54	%	Not Applicable
Fixed Rate - Advances	16-Aug-19		3,063		2.66	%	Not Applicable
Fixed Rate - Advances	9-Oct-19		2,038		2.53	%	Not Applicable
Fixed Rate - Amortizing	18-Nov-19		3,363		1.53	%	Not Applicable
Fixed Rate - Advances	26-Nov-19		3,047		2.35	%	Not Applicable
Fixed Rate - Advances	22-Jun-20		3,068		2.60	%	Not Applicable
Fixed Rate - Advances	24-Jun-20		2,059		2.85	%	Not Applicable
Fixed Rate - Advances	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate - Advances	17-Aug-20		2,073		3.06	%	Not Applicable
Fixed Rate - Advances	9-Oct-20		2,066		2.92	%	Not Applicable
Fixed Rate - Advances	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate - Advances	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate - Advances	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate - Advances	19-Aug-21		249		1.55	%	Not Applicable
Fixed Rate - Advances	7-Oct-21		2,095		3.19	%	Not Applicable
Fixed Rate - Advances	12-Oct-21		2,089		3.23	%	Not Applicable
Fixed Rate - Advances	6-Jun-22		10,000		2.05	%	Not Applicable
		$	88,078		2.19	%	(a)

(a) Weighted average coupon rate.

The long-term advances outstanding as of September 30, 2016 are as follows:

Type	Maturity Date	Amount		Coupon			Call Date
	(Dollars in Thousands)
Fixed Rate -Advance	17-Nov-17	$	10,000		1.20	%	Not Applicable
Fixed Rate -Amortizing	1-Dec-17		2,511		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		4,382		1.53	%	Not Applicable
Fixed Rate -Advance	27-Jul-20		249		1.38	%	Not Applicable
Fixed Rate -Advance	27-Jul-21		249		1.52	%	Not Applicable
Fixed Rate -Advance	28-Jul-21		249		1.48	%	Not Applicable
Fixed Rate -Advance	29-Jul-21		249		1.42	%	Not Applicable
Fixed Rate -Advance	19-Aug-21		249		1.55	%	Not Applicable
		$	30,638		1.34	%	(a)
(a) Weighted average coupon rate.

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DERIVATIVES (Tables)

9 Months Ended

Jun. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate swap agreements and the terms

	June 30, 2017
	Notional		Pay			Receive	Maturity	Unrealized
	Amount		Rate			Rate	Date	Gain
	(Dollars in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	214
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		221
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		64
								$	499

	September 30, 2016
	Notinal  Amount		Pay  Rate			Receive  Rate	Maturity  Date	Unrealized Loss
						(Dollar in Thousands)
Interest rate swap contract	$	10,000		1.15	%	1 Month Libor	6-Apr-21	$	(92	)
Interest rate swap contract		10,000		1.18	%	1 Month Libor	13-Jun-21		(103	)
Interest rate swap contract		1,100		4.10	%	1 Month Libor +276 bp	1-Aug-26		(7	)
								$	(202	)

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INCOME TAXES (Tables)

9 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Schedule of deferred income taxes

	June 30,			September 30,
	2017			2016
Deferred tax assets:		(Dollars in Thousands)
Allowance for loan losses	$	1,647		$	1,289
Nonaccrual interest		286			163
Accrued vacation		12			13
Capital loss carryforward		387			378
Split dollar life insurance		18			18
Post-retirement benefits		97			96
Other real estate owned		3			-
Unrealized losses on available for sale securities		524			-
Goodwill		2,729			-
Purchase accounting (Polonia Bancorp)		935			-
Unrealized losses on interest rate swaps		-			69
Employee benefit plans		327			434
Total deferred tax assets		6,965			2,460
Valuation allowance		(387	)		(378	)
Total deferred tax assets, net of valuation allowance		6,578			2,082
Deferred tax liabilities:
Property		393			423
Unrealized gains on available for sale securities		-			500
Section 481(a) Adjustment		-			12
Unrealized gains on interest rate swaps		170			-
Deferred loan fees		534			578
Total deferred tax liabilities		1,097			1,513
Net deferred tax assets	$	5,481		$	569

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STOCK COMPENSATION PLANS (Tables)

9 Months Ended

Jun. 30, 2017

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

Schedule of summary of the non-vested stock award activity

	Nine Months Ended June 30, 2017
	Number of  Shares (1)			Weighted Average  Grant Date Fair  Value
Nonvested stock awards at October 1, 2016		172,788		$	12.03
Granted		17,128			17.43
Forfeited		-			-
Vested		(43,755	)		11.59
Nonvested stock awards at the June 30, 2017		146,161		$	12.78

	Nine Months Ended June 30, 2016
	Number of  Shares			Weighted Average  Grant Date Fair  Value
Nonvested stock awards at October 1, 2015		241,428		$	11.74
Granted		-			-
Forfeited		(30,180	)		11.55
Vested		(55,279	)		11.59
Nonvested stock awards at the June 30, 2016		155,969		$	11.83

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

	Nine Months Ended June 30, 2017
	Number of  Shares			Weighted Average  Exercise Price
Outstanding at October 1, 2016		921,909		$	11.70
Granted		47,828			17.48
Exercised		(40,757	)		11.48
Forfeited		-			-
Outstanding at  June 30, 2017		928,980		$	11.85
Exercisable at June 30, 2017		552,435		$	11.43

	Nine Months Ended June 30, 2016
	Number of  Shares			Weighted Average  Exercise Price
Outstanding at October 1, 2015		1,074,430		$	11.92
Granted		-			-
Exercised		(89,358	)		11.61
Forfeited		(80,476	)		11.52
Outstanding at June 30, 2016		904,596		$	11.99
Exercisable at June 30, 2016		489,679		$	11.45

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FAIR VALUE MEASUREMENT (Tables)

9 Months Ended

Jun. 30, 2017

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	$	-	$	20,620	$	-	$	20,620
Mortgage-backed securities - U.S. Government agencies		-		125,715		-		125,715
Corporate bonds		-		37,045		-		37,045
FHLMC preferred stock		59		-		-		59
Interest rate swap contracts		-		499		-		499
Total	$	59	$	183,879	$	-	$	183,938

	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	$	-	$	21,024	$	-	$	21,024
Mortgage-backed securities - U.S. Government agencies		-		91,575		-		91,575
Corporate bonds		-		26,053		-		26,053
FHLMC preferred stock		42		-		-		42
Total	$	42	$	138,652	$	-	$	138,694
Liabilities:
Interest rate swap contracts	$	-	$	202	$	-	$	202
Total	$	-	$	202	$	-	$	202

Schedule of summary of non-recurring fair value measurements

	At June 30, 2017
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	18,092	$	18,092
Real estate owned		-		-		192		192
Total	$	-	$	-	$	18,284	$	18,284

	At September 30, 2016
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	19,429	$	19,429
Real estate owned		-		-		581		581
Total	$	-	$	-	$	20,010	$	20,010

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

	At June 30, 2017
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	18,092	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 10% discount/10%
Real estate owned	$	581	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2016
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	19,429	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 46% discount/10%
Real estate owned	$	581	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
					June 30, 2017
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	22,927	$	22,927	$	22,927	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		183,439		183,439		59		183,380		-
Investment and mortgage-backed securities held to maturity		59,654		58,570		-		58,570		-
Loans receivable, net		544,422		548,697		-		-		548,697
Accrued interest receivable		3,089		3,089		3,089		-		-
Other real estate owned		192		192		192		-		-
Federal Home Loan Bank stock		5,767		5,767		5,767		-		-
Bank owned life insurance		27,877		27,877		27,877		-		-
Interest rate swap contracts		499		499		-		499		-
Liabilities:
Checking accounts		64,143		64,143		64,143		-		-
Money market deposit accounts		81,211		81,211		81,211		-		-
Passbook, club and statement savings accounts		104,446		104,446		104,446		-		-
Certificates of deposit		365,046		360,527		-		-		360,527
Accrued interest payable		1,339		1,339		1,339		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		88,078		87,372		-		-		87,372
Advances from borrowers for taxes and insurance		3,982		3,982		3,982		-		-

					Fair Value Measurements at
					September 30, 2016
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	12,440	$	12,440	$	12,440	$	-	$	-
Certificate of deposits		1,853		1,853		1,853		-		-
Investment and mortgage-backed securities available for sale		138,694		138,694		42		138,652		-
Investment and mortgage-backed securities held to maturity		39,971		40,700		-		40,700		-
Loans receivable, net		344,948		344,100		-		-		344,100
Accrued interest receivable		1,928		1,928		1,928		-		-
Federal Home Loan Bank stock		2,463		2,463		2,463		-		-
Bank owned life insurance		13,055		13,055		13,055		-		-
Liabilities:
Checking accounts		38,788		38,788		38,788		-		-
Money market deposit accounts		55,552		55,552		55,552		-		-
Passbook, club and statement savings accounts		70,924		70,924		70,924		-		-
Certificates of deposit		223,937		225,383		-		-		225,383
Accrued interest payable		1,403		1,403		1,403		-		-
Advances from FHLB -short-term		20,000		20,000		20,000		-		-
Advances from FHLB -long-term		30,638		30,222		-		-		30,222
Advances from borrowers for taxes and insurance		1,748		1,748		1,748		-		-
Interest rate swap contracts		202		202		-		202		-

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Jun. 30, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill and intangible assets are related to the acquisition of Polonia

	Balance							Balance
	October 1,		Additions/					June 30,		Amortization
	2016		Adjustments		Amortization			2017		Period
Goodwill	$	-	$	7,163	$	-		$	7,163
Core deposit intangible		-		822		(75	)		747	10 years
	$	-	$	7,985	$	(75	)	$	7,910

Schedule of goodwill and intangible assets are related to the acquisition of Polonia

(In thousands)
2017	$	37
2018		138
2019		123
2020		108
Thereafter		341

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BUSINESS COMBINATIONS (Tables)

9 Months Ended

Jun. 30, 2017

Business Combinations [Abstract]

Schedule of consideration paid and estimated fair value of identifiable assets and liabilities assumed

(dollars in thousands)
Consideration paid:
Common stock issued (1,274,197 shares) at a fair value per share of $17.12 per share.	$	21,814
Cash for common stock exchanged		18,944
Cash in lieu of fractional shares		1
		40,759
Assets acquired:
Cash and due from banks		47,901
Investments available for sale		42,164
Loans		160,157
Premises and equipment		6,902
Deferred taxes		3,921
Bank-owned life insurance		4,316
Core deposit intangible		822
Other assets		5,802
Total assets		271,985
Liabilities assumed:
Deposits		172,243
FHLB advances, short-term		7,000
FHLB advances, long -term		50,232
Other liabilities		8,914
Total liabilities		238,389
Net assets acquired		33,596
Goodwill resulting from the acquisition	$	7,163

Schedule of estimated fair value of the assets acquired and the liabilities assumed

(Dollars in thousands, except per share data)
Purchase Consideration
Polonia Common Stock:
Total shares of common stock outstanding		3,416,311
Common stock issued cap		1,708,155
Shares redeemed for cash cap		1,708,156
Prudential common stock issued (conversion rate 0.7460)		1,274,197
Prudential closing price at December 31, 2016	$	17.12
Cash-out rate paid per share for Polonia Bancorp common stock	$	11.09
Purchase consideration assigned to Polonia Bancorp shares exchanged for Company Common Stock	$	21,814
Cash Paid to Polonia for Polonia Bancorp shares	$	18,944
Cash Paid for fractional shares	$	1
	$	40,759
Net Assets Acquired
Polonia Bancorp stockholders' equity		35,412
Core deposit intangible assets		822
Estimated adjustments to reflect assets acquired at fair value:
Investment securities		(781	)
Portfolio loans		(4,643	)
Allowance for loan and lease losses		1,002
Premises		3,049
Other Assets		(73	)
Deferred Taxes		934
Total fair value adjustment to assets acquired		310
Estimated adjustments to reflect liabilities assumed at fair value:
Time deposits		894
Borrowings		1,232
Total fair value adjustment to liabilities assumed		2,126
Total net assets acquired		33,596
Goodwill resulting from merger		7,163

Schedule of Pro Forma Income Statements

	Unaudited
	Three Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		6,053		5,681
Provision for loan and leases losses		30		150
Net interest income after provision for loan and lease losses		6,023		5,531
Non-interest income		625		721
Non-interest expenses		3,500		5,156
Income before income taxes		3,148		1,096
Income tax expense		1,031		318
Net income		2,117		778
Per share data
Weighed average basic shares outstanding		8,652,699		8,655,077
Dilutive shares		656,370		270,973
Adjusted weighted-average dilutive shares		9,309,069		8,926,050
Basic earnings per common share	$	0.25	$	0.09
Dilutive earnings per common share	$	0.25	$	0.09

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the Merger. The dilutive shares reflect the Company’s estimated diluted shares for the period.

	Unaudited
	Nine Months Ended
	June 30,
(Dollars in thousands, except per share data)		2017		2016
Net interest income		14,998		17,648
Provision for loan and leases losses		2,580		225
Net interest income after provision for loan and lease losses		12,418		17,423
Non-interest income		1,500		2,134
Non-interest expenses		12,981		17,582
Income before income taxes		937		1,975
Income tax expense		230		704
Net income		707		1,271
Per share data
Weighed average basic shares outstanding		8,202,850		8,655,077
Dilutive shares		570,792		246,791
Adjusted weighted-average dilutive shares		8,773,642		8,901,868
Basic earnings per common share	$	0.08	$	0.10
Dilutive earnings per common share	$	0.08	$	0.10

(a) Weighted-average basis shares outstanding for both periods reflected are the Company’s weighted-average shares plus the 1,274,197, shares that were issued as consideration for the merger. The dilutive shares reflect the Company’s estimated diluted shares for the period

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SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) $ in Thousands	9 Months Ended
	Jun. 30, 2017 USD ($) Branch shares
Significant Accounting Policies [Line Items]
Number of full service branch offices	10
Number of branch offices	11
Terminate ESOP Plan (in shares) | shares	303,115
Share-based Compensation Arrangement by Share-based Payment Award, Shares Purchased for Award | shares	42,791
Treasury Stock
Significant Accounting Policies [Line Items]
Terminate ESOP Plan, value | $	$ 5,189
Philadelphia (Philadelphia County)
Significant Accounting Policies [Line Items]
Number of branch offices	9
Drexel Hill, Delaware County, Pennsylvania
Significant Accounting Policies [Line Items]
Number of branch offices	1
Huntingdon Valley, Montgomery County
Significant Accounting Policies [Line Items]
Number of 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		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Earnings per share - basic
Net income	$ 2,117	$ 777	$ 707	$ 1,738
Weighted average shares outstanding - basic	8,652,699	7,330,386	8,202,850	7,442,956
Effect of common stock equivalents - basic
Adjusted weighted average shares used in earnings per share computation - basic	8,652,699	7,330,386	8,202,850	7,442,956
Earnings per share - basic (in dollars per share)	$ 0.25	$ 0.10	$ 0.08	$ 0.23
Earnings per share - diluted
Net (loss) income	$ 2,117	$ 777	$ 707	$ 1,738
Weighted average shares outstanding - diluted	8,652,699	7,330,386	8,202,850	7,442,956
Effect of common stock equivalents - diluted	656,370	200,986	570,792	210,125
Adjusted weighted average shares used in earnings per share computation - diluted	9,309,069	7,531,372	8,773,642	7,653,081
Earnings per share - diluted (in dollars per share)	$ 0.25	$ 0.10	$ 0.08	$ 0.23

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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		9 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance				$ 798
Total other comprehensive income (loss)		$ 633	$ 149	(1,485)	$ 914
Ending Balance		(687)		(687)
Unrealized gains (losses) on available for sale securities and interest rate swaps
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning Balance	[1]	(1,320)	783	798	18
Unrealized (loss) gains on available for sale securities	[1]	693	255	(1,948)	1,020
Unrealized gains on interest rate swaps	[1]	(60)	(106)	463	(106)
Total other comprehensive income (loss)	[1]	633	149	(1,485)	914
Ending Balance	[1]	$ (687)	$ 932	$ (687)	$ 932

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

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) - Significant amounts reclassified out of each component of accumulated other comprehensive income (loss) (Details 1) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Unrealized gains on available for sale securities
Gain on sale of securities available for sale		$ 70	$ 161	$ 70	$ 161
Income taxes		24	55	24	55
Unrealized gains on available for sale securities | Reclassification out of Accumulated Other Comprehensive Income [Member]
Unrealized gains on available for sale securities
Gain on sale of securities available for sale	[1]	70	161	70	161
Income taxes	[1]	(24)	(55)	(24)	(55)
Net of tax	[1]	$ 46	$ 106	$ 46	$ 106

[1] Amounts in parentheses indicate debits to net income

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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	Jun. 30, 2017	Sep. 30, 2016
Securities Available for Sale:
Amortized Cost	$ 184,980	$ 137,222
Gross Unrealized Gains	476	1,593
Gross Unrealized Losses	(2,017)	(121)
Fair Value	183,439	138,694
Securities Held to Maturity:
Amortized Cost	59,654	39,971
Gross Unrealized Gains	767	858
Gross unrealized losses	(1,851)	(129)
Fair value	58,570	40,700
U.S. government and agency obligations
Securities Available for Sale:
Amortized Cost	20,989	20,988
Gross Unrealized Gains		36
Gross Unrealized Losses	(369)
Fair Value	20,620	21,024
Securities Held to Maturity:
Amortized Cost	33,500	33,499
Gross Unrealized Gains	236	399
Gross unrealized losses	(1,735)	(129)
Fair value	32,001	33,769
Mortgage-backed securities - agency
Securities Available for Sale:
Amortized Cost	126,912	90,817
Gross Unrealized Gains	152	860
Gross Unrealized Losses	(1,349)	(102)
Fair Value	125,715	91,575
Securities Held to Maturity:
Amortized Cost	7,387	6,472
Gross Unrealized Gains	347	459
Gross unrealized losses	(29)
Fair value	7,705	6,931
Corporate bonds
Securities Available for Sale:
Amortized Cost	37,073	25,411
Gross Unrealized Gains	271	661
Gross Unrealized Losses	(299)	(19)
Fair Value	37,045	26,053
Total debt securities available for sale
Securities Available for Sale:
Amortized Cost	184,974	137,216
Gross Unrealized Gains	423	1,557
Gross Unrealized Losses	(2,017)	(121)
Fair Value	183,380	138,652
FHLMC preferred stock
Securities Available for Sale:
Amortized Cost	6	6
Gross Unrealized Gains	53	36
Gross Unrealized Losses
Fair Value	59	$ 42
Municipal bonds
Securities Held to Maturity:
Amortized Cost	18,767
Gross Unrealized Gains	184
Gross unrealized losses	(87)
Fair value	$ 18,864

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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	Jun. 30, 2017	Sep. 30, 2016
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	$ (1,797)	$ (69)
Less than 12 months - Fair value	118,154	20,453
More than 12 months - Gross Unrealized Losses	(220)	(52)
More than 12 months - Fair value	11,013	6,718
Gross Unrealized Losses - Total	(2,017)	(121)
Fair Value - Total	129,167	27,171
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(1,851)	(129)
Less than 12 months - Fair value	35,817	20,371
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses -Total	(1,851)	(129)
Fair Value - Total	35,817	20,371
Less than 12 months - Gross Unrealized Losses	(3,648)	(198)
Less than 12 months - Fair Value	153,971	40,824
More than 12 months - Gross Unrealized Losses	(220)	(52)
More than 12 months - Fair Value	11,013	6,718
Gross Unrealized Losses -Total	(3,868)	(250)
Fair Value - Total	164,984	47,542
U.S. government and agency obligations
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(369)
Less than 12 months - Fair value	20,620
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses - Total	(369)
Fair Value - Total	20,620
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(1,735)	(129)
Less than 12 months - Fair value	28,765	20,371
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses -Total	(1,735)	(129)
Fair Value - Total	28,765	20,371
Mortgage-backed securities - agency
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(1,129)	(50)
Less than 12 months - Fair value	81,547	16,498
More than 12 months - Gross Unrealized Losses	(220)	(52)
More than 12 months - Fair value	11,013	6,718
Gross Unrealized Losses - Total	(1,349)	(102)
Fair Value - Total	92,560	23,216
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(29)
Less than 12 months - Fair value	1,216
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses -Total	(29)
Fair Value - Total	1,216
Corporate bonds
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(299)	(19)
Less than 12 months - Fair value	15,987	3,955
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses - Total	(299)	(19)
Fair Value - Total	15,987	$ 3,955
Municipal bonds
Securities Held to Maturity:
Less than 12 months - Gross Unrealized Losses	(87)
Less than 12 months - Fair value	5,836
More than 12 months - Gross Unrealized Losses
More than 12 months - Fair value
Gross Unrealized Losses -Total	(87)
Fair Value - Total	$ 5,836

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of debt securities, by contractual maturity (Details 2) $ in Thousands	Jun. 30, 2017 USD ($)
Held to Maturity, Amortized Cost
Due after one through five years	$ 2,867
Due after five through ten years	20,583
Due after ten years	28,817
Total	52,267
Held to Maturity, Fair Value
Due after one through five years	2,794
Due after five through ten years	20,661
Due after ten years	27,410
Total	50,865
Available for Sale, Amortized Cost
Due after one through five years	4,048
Due after five through ten years	18,748
Due after ten years	35,266
Total	58,062
Available for Sale, Fair Value
Due after one through five years	4,066
Due after five through ten years	18,872
Due after ten years	34,727
Total	$ 57,665

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INVESTMENT AND MORTGAGE-BACKED SECURITIES (Detail Textuals)	3 Months Ended		9 Months Ended
	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($) Security	Jun. 30, 2017 USD ($) Security	Jun. 30, 2016 USD ($) Security
Marketable Securities [Line Items]
Aggregate amortized cost	$ 52,267,000		$ 52,267,000
Aggregate agency securities	$ 50,865,000		$ 50,865,000
Agency securities
Marketable Securities [Line Items]
Aggregate agency securities		$ 11,000,000		$ 11,000,000
Recognized on aggregate gain		$ 8,000		$ 8,000
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 | Security	14		14
Mortgage-backed securities - agency
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company | Security	35		35
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company | Security	9		9
Number of securities sold | Security	2	5	2	5
Aggregate amortized cost	$ 5,100,000	$ 11,000,000	$ 5,100,000	$ 11,000,000
Recognized on aggregate gain	$ 18,000	$ 153,000	$ 18,000	$ 153,000
Corporate bonds
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company | Security	15		15
Number of securities sold | Security	1		1
Aggregate amortized cost	$ 5,200,000		$ 5,200,000
Recognized on aggregate gain	$ 52,000		$ 52,000
Municipal bonds
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company | Security	9		9

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LOANS RECEIVABLE - Summary of Loans receivable (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 602,175		$ 351,891
Undisbursed portion of loans-in-process	(50,792)		(5,371)
Deferred loan fees and (costs)	(2,903)		1,697
Allowance for loan losses	(4,058)	$ (3,896)	(3,269)	$ (3,269)	$ (3,038)	$ (2,930)
Net loans	544,422		344,948
One-to-four family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	354,338		233,531
Allowance for loan losses	(1,241)	(1,350)	(1,627)	(1,445)	(1,511)	(1,635)
Multi-family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	16,913		12,478
Allowance for loan losses	(158)	(122)	(137)	(62)	(43)	(66)
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	129,846		79,859
Allowance for loan losses	(1,224)	(862)	(859)	(664)	(428)	(231)
Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	93,671		21,839
Allowance for loan losses	(1,011)	(1,035)	(316)	(777)	(773)	(724)
Commercial business
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	490		99
Allowance for loan losses	(4)		(1)
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	4,922		3,286
Allowance for loan losses	(27)	(28)	(21)
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,995		799
Allowance for loan losses	$ (24)	$ (135)	$ (10)	$ (9)	$ (7)	$ (5)

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LOANS RECEIVABLE - Summary of loans individually evaluated for impairment by loan segment (Details 1) - USD ($) $ in Thousands	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Sep. 30, 2015
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	4,058		3,269
Total ending allowance balance	4,058	$ 3,896	3,269	$ 3,269	$ 3,038	$ 2,930
Loans:
Individually evaluated for impairment	18,092		19,429
Collectively evaluated for impairment	584,083		332,462
Total loans	602,175		351,891
One-to-four family residential
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	1,242		1,627
Total ending allowance balance	1,241	1,350	1,627	1,445	1,511	1,635
Loans:
Individually evaluated for impairment	6,679		5,553
Collectively evaluated for impairment	347,659		227,978
Total loans	354,338		233,531
Multi-family residential
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	158		137
Total ending allowance balance	158	122	137	62	43	66
Loans:
Individually evaluated for impairment	323		335
Collectively evaluated for impairment	16,590		12,143
Total loans	16,913		12,478
Commercial real estate
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	1,224		859
Total ending allowance balance	1,224	862	859	664	428	231
Loans:
Individually evaluated for impairment	2,377		3,154
Collectively evaluated for impairment	127,469		76,705
Total loans	129,846		79,859
Construction and land development
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	1,011		316
Total ending allowance balance	1,011	1,035	316	777	773	724
Loans:
Individually evaluated for impairment	8,713		10,288
Collectively evaluated for impairment	84,958		11,551
Total loans	93,671		21,839
Commercial business
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	4		1
Total ending allowance balance	4		1
Loans:
Individually evaluated for impairment			99
Collectively evaluated for impairment	490
Total loans	490		99
Leases
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	27		21
Total ending allowance balance	27	28	21
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment	4,922		3,286
Total loans	4,922		3,286
Consumer
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	24		10
Total ending allowance balance	24	135	10	9	7	5
Loans:
Individually evaluated for impairment
Collectively evaluated for impairment	1,995		799
Total loans	1,995		799
Unallocated
Allowance for Loan Losses:
Individually evaluated for impairment
Collectively evaluated for impairment	368		298
Total ending allowance balance	$ 369	$ 364	$ 298	$ 312	$ 276	$ 269

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LOANS RECEIVABLE - Impaired loans by class, segregated by those for which specific allowance was required and those for which specific allowance was not required (Details 2) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
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	18,092	19,429
Total Impaired Loans - Recorded Investment	18,092	19,429
Total impaired loans - Unpaid Principal Balance	20,140	19,745
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	6,679	5,553
Total Impaired Loans - Recorded Investment	6,679	5,553
Total impaired loans - Unpaid Principal Balance	6,908	5,869
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	323	335
Total Impaired Loans - Recorded Investment	323	335
Total impaired loans - Unpaid Principal Balance	323	335
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	2,377	3,154
Total Impaired Loans - Recorded Investment	2,377	3,154
Total impaired loans - Unpaid Principal Balance	2,377	3,154
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	8,713	10,288
Total Impaired Loans - Recorded Investment	8,713	10,288
Total impaired loans - Unpaid Principal Balance	$ 10,532	10,288
Commercial loans
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		99
Total Impaired Loans - Recorded Investment		99
Total impaired loans - Unpaid Principal Balance		$ 99

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LOANS RECEIVABLE - Average recorded investment in impaired loans and related interest income recognized (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 18,699	$ 18,796	$ 18,946	$ 18,423
Income Recognized on Accrual Basis	24	55	117	181
Income Recognized on Cash Basis	34	30	103	152
One-to-four family residential
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	5,965	5,052	5,280	4,978
Income Recognized on Accrual Basis	12	14	59	89
Income Recognized on Cash Basis	34	30	91	78
Multi-family residential
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	326	341	329	346
Income Recognized on Accrual Basis	6	6	17	18
Income Recognized on Cash Basis
Commercial real estate
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	2,801	3,595	2,938	3,667
Income Recognized on Accrual Basis	6	35	41	74
Income Recognized on Cash Basis			12	12
Construction and land development
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	9,607	9,808	10,399	9,432
Income Recognized on Accrual Basis
Income Recognized on Cash Basis				$ 62

XML

LOANS RECEIVABLE - Summary of classes of loan portfolio in which formal risk weighting system is used (Details 4) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 602,175	$ 351,891
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	354,338	233,531
Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,913	12,478
Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	129,846	79,859
Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	93,671	21,839
Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	490	99
Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,995	799
Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total Loans	244,516	117,168
Risk Rating System | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,596	2,893
Risk Rating System | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,913	12,478
Risk Rating System | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	129,846	79,859
Risk Rating System | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	93,671	21,839
Risk Rating System | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	490	99
Risk Rating System | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	228,694	99,979
Risk Rating System | Pass | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Risk Rating System | Pass | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,590	12,144
Risk Rating System | Pass | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	126,656	76,185
Risk Rating System | Pass | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	84,958	11,551
Risk Rating System | Pass | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	490	99
Risk Rating System | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,103	2,624
Risk Rating System | Special Mention | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,645	1,681
Risk Rating System | Special Mention | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Risk Rating System | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,458	943
Risk Rating System | Special Mention | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Risk Rating System | Special Mention | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Risk Rating System | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	12,719	14,565
Risk Rating System | Substandard | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,951	1,212
Risk Rating System | Substandard | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	323	334
Risk Rating System | Substandard | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,732	2,731
Risk Rating System | Substandard | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,713	10,288
Risk Rating System | Substandard | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans

XML

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) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 602,175	$ 351,891
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	354,338	233,531
Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,922	3,286
Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,995	799
Non Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total Loans	357,659	234,723
Non Risk Rating System | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	350,742	230,638
Non Risk Rating System | Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,922	3,286
Non Risk Rating System | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,995	799
Non Risk Rating System | Performing
Financing Receivable, Recorded Investment [Line Items]
Total Loans	351,884	230,479
Non Risk Rating System | Performing | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	344,967	226,394
Non Risk Rating System | Performing | Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,922	3,286
Non Risk Rating System | Performing | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,995	799
Non Risk Rating System | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,775	4,244
Non Risk Rating System | Nonperforming | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	5,775	4,244
Non Risk Rating System | Nonperforming | Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans
Non Risk Rating System | Nonperforming | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans

XML

LOANS RECEIVABLE - Loan categories of loan portfolio summarized by aging categories of performing loans and nonaccrual loans (Details 6) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 586,613	$ 335,630
90 Days+ Past Due and Accruing
Total Past Due and Accruing	2,434	1,860
Total Loans	602,175	351,891
Non- Accrual	16,092	15,878
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	2,434	1,860
90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	13,129	14,401
One-to-four family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	349,359	228,904
90 Days+ Past Due and Accruing
Total Past Due and Accruing	1,910	1,860
Total Loans	354,338	233,531
Non- Accrual	5,775	4,244
One-to-four family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,910	1,860
One-to-four family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	3,069	2,767
Multi-family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	16,913	12,478
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	16,913	12,478
Non- Accrual
Multi-family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Multi-family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	128,035	78,513
90 Days+ Past Due and Accruing
Total Past Due and Accruing	465
Total Loans	129,846	79,859
Non- Accrual	1,603	1,346
Commercial real estate | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	465
Commercial real estate | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,346	1,346
Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	84,958	11,551
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	93,671	21,839
Non- Accrual	8,714	10,288
Construction and land development | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Construction and land development | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	8,714	10,288
Commercial business
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	490	99
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	490	99
Non- Accrual
Commercial business | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Commercial business | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	4,922	3,286
90 Days+ Past Due and Accruing
Total Past Due and Accruing
Total Loans	4,922	3,286
Non- Accrual
Leases | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Leases | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,936	799
90 Days+ Past Due and Accruing
Total Past Due and Accruing	59
Total Loans	1,995	799
Non- Accrual
Consumer | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	59
Consumer | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due

XML

LOANS RECEIVABLE - Activity in allowance (Details 7) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 3,896	$ 3,038	$ 3,269	$ 2,930
Charge-offs			1,948	(11)
Recoveries	132	81	157	125
Provision	30	150	2,580	225
ALLL balance	4,058	3,269	4,058	3,269
One- to four-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	1,350	1,511	1,627	1,635
Charge-offs			113	(11)
Recoveries	132	81	157	93
Provision	(241)	(147)	(430)	(272)
ALLL balance	1,241	1,445	1,241	1,445
Multi-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	122	43	137	66
Charge-offs			0
Recoveries			0
Provision	36	19	21	(4)
ALLL balance	158	62	158	62
Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	862	428	859	231
Charge-offs			0
Recoveries			0	32
Provision	362	236	365	401
ALLL balance	1,224	664	1,224	664
Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	1,035	773	316	724
Charge-offs			1,819
Recoveries			0
Provision	(24)	4	2,514	53
ALLL balance	1,011	777	1,011	777
Commercial business
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance			1
Charge-offs			0
Recoveries			0
Provision	4		3
ALLL balance	4		4
Leases
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	28		21
Charge-offs			0
Recoveries			0
Provision	(1)		6
ALLL balance	27		27
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	135	7	10	5
Charge-offs			16
Recoveries			0
Provision	(111)	2	30	4
ALLL balance	24	9	24	9
Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	364	276	298	269
Charge-offs			0
Recoveries			0
Provision	5	36	71	43
ALLL balance	$ 369	$ 312	$ 369	$ 312

XML

LOANS RECEIVABLE (Detail Textuals) $ in Thousands	3 Months Ended			9 Months Ended
	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Loan	Jun. 30, 2016 USD ($)	Sep. 30, 2016 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for loan losses	$ 30		$ 150	$ 2,580	$ 225
Number of Loans | Loan				9
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	6,100			$ 6,100
Charge-offs				$ (1,948)	$ 11
Number of TDR loans receivable placed on accruing status | Loan				6
Total Loans	602,175			$ 602,175		$ 351,891
Impaired Loans - Recorded Investment	18,092			18,092		19,429
Risk Rating System
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	244,516			$ 244,516		117,168
Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of Loans | Loan				3
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	4,900			$ 4,900
Number of loans default | Loan				1
Amount of loan concerns sufficiancy of cash flow				$ 1,400
Number of remaining loan default | Loan				2
Amount of loan default				$ 3,500
Write-down amount of TDR loans		$ 1,900
Substandard | Risk Rating System
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total Loans	$ 12,719			$ 12,719		$ 14,565

XML

DEPOSITS - Major classifications of deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Amount
Money market deposit accounts	$ 81,211	$ 55,552
Interest-bearing checking accounts	54,574	34,984
Non interest-bearing checking accounts	9,569	3,804
Passbook, club and statement savings	104,446	70,924
Certificates maturing in six months or less	123,656	97,418
Certificates maturing in more than six months	241,390	126,519
Total deposits	$ 614,846	$ 389,201
Percent
Money market deposit accounts	13.20%	14.30%
Interest-bearing checking accounts	8.90%	9.30%
Non interest-bearing checking accounts	1.60%	0.70%
Passbook, club and statement savings	17.00%	18.20%
Certificates maturing in six months or less	20.10%	25.00%
Certificates maturing in more than six months	39.20%	32.50%
Total	100.00%	100.00%

XML

DEPOSITS (Detail Textuals) - USD ($) $ in Millions	Jun. 30, 2017	Sep. 30, 2016
Deposits [Abstract]
Certificates of $250,000 and over	$ 24.6	$ 17.0

XML

ADVANCES FROM FEDERAL HOME LOAN BANK (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2016
Advances from Federal Home Loan Banks [Abstract]
Balance at period-end	$ 20,000	$ 20,000	$ 20,000	$ 20,000	$ 20,000
Average balance outstanding	20,000	20,000	21,667	20,000
Maximum month-end balance	$ 20,000	$ 20,000	$ 35,000	$ 20,000
Weight-average rate at period end	1.25%	0.56%	1.25%	0.56%
Weight-average rate during the period	1.12%	0.56%	0.80%	0.56%

XML

ADVANCES FROM FEDERAL HOME LOAN BANK (Details 1) - USD ($) $ in Thousands		9 Months Ended	12 Months Ended
		Jun. 30, 2017	Sep. 30, 2016
Federal Home Loan Bank, Advances [Line Items]
Amount	[1]	$ 88,078	$ 30,638
Coupon	[1]	2.19%	1.34%
Fixed Rate Advance Maturity Date 17-Nov-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 17, 2017	Nov. 17, 2017
Amount		$ 10,000	$ 10,000
Coupon		1.20%	1.20%
Call Date		Not Applicable	Not Applicable
Fixed Rate -Amortizing Maturity Date 1-Dec-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Dec. 01, 2017	Dec. 01, 2017
Amount		$ 1,009	$ 2,511
Coupon		1.16%	1.16%
Call Date		Not Applicable	Not Applicable
Fixed Rate -Advance Maturity Date 4-Dec-17
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Dec. 04, 2017	Dec. 04, 2017
Amount		$ 2,000	$ 2,000
Coupon		1.15%	1.15%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity Date 19-Mar-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Mar. 19, 2018
Amount		$ 5,045
Coupon		2.53%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 19-Mar-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Mar. 19, 2018
Amount		$ 5,031
Coupon		2.13%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 20-Jun-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jun. 20, 2018
Amount		$ 3,015
Coupon		1.86%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 25-Jun-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jun. 25, 2018
Amount		$ 3,022
Coupon		2.09%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 27-Aug-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Aug. 27, 2018
Amount		$ 7,223
Coupon		4.15%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 15-Nov-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 15, 2018
Amount		$ 3,017
Coupon		1.89%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 16-Nov-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 16, 2018	Nov. 16, 2018
Amount		$ 7,500	$ 7,500
Coupon		1.40%	1.40%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity Date 26-Nov-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 26, 2018
Amount		$ 2,010
Coupon		1.81%
Call Date		Not Applicable
Fixed Rate -Advance Maturity Date 3-Dec-18
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Dec. 03, 2018	Dec. 03, 2018
Amount		$ 3,000	$ 3,000
Coupon		1.54%	1.54%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity Date 16-Aug-19
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Aug. 16, 2019
Amount		$ 3,063
Coupon		2.66%
Call Date		Not Applicable
Fixed Rate - Advance Maturity Date 9-Oct-19
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Oct. 09, 2019
Amount		$ 2,038
Coupon		2.53%
Call Date		Not Applicable
Fixed Rate - Amortizing Maturity Date 18-Nov-19
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 18, 2019	Nov. 18, 2019
Amount		$ 3,363	$ 4,382
Coupon		1.53%	1.53%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity 26-Nov-19
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Nov. 26, 2019
Amount		$ 3,047
Coupon		2.35%
Call Date		Not Applicable
Fixed Rate - Advance Maturity 22-Jun-20
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jun. 22, 2020
Amount		$ 3,068
Coupon		2.60%
Call Date		Not Applicable
Fixed Rate - Advance Maturity 24-Jun-20
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jun. 24, 2020
Amount		$ 2,059
Coupon		2.85%
Call Date		Not Applicable
Fixed Rate -Advance Maturity Date 27-Jul-20
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jul. 27, 2020	Jul. 27, 2020
Amount		$ 249	$ 249
Coupon		1.38%	1.38%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity 17-Aug-20
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Aug. 17, 2020
Amount		$ 2,073
Coupon		3.06%
Call Date		Not Applicable
Fixed Rate - Advance Maturity 9-Oct-20
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Oct. 09, 2020
Amount		$ 2,066
Coupon		2.92%
Call Date		Not Applicable
Fixed Rate -Advance Maturity Date 27-Jul-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jul. 27, 2021	Jul. 27, 2021
Amount		$ 249	$ 249
Coupon		1.52%	1.52%
Call Date		Not Applicable	Not Applicable
Fixed Rate -Advance Maturity Date 28-Jul-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jul. 28, 2021	Jul. 28, 2021
Amount		$ 249	$ 249
Coupon		1.48%	1.48%
Call Date		Not Applicable	Not Applicable
Fixed Rate Advance Maturity Date 29-Jul-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jul. 29, 2021	Jul. 29, 2021
Amount		$ 249	$ 249
Coupon		1.42%	1.42%
Call Date		Not Applicable	Not Applicable
Fixed Rate -Advance Maturity Date 19-Aug-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Aug. 19, 2021	Aug. 19, 2021
Amount		$ 249	$ 249
Coupon		1.55%	1.55%
Call Date		Not Applicable	Not Applicable
Fixed Rate - Advance Maturity Date 7-Oct-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Oct. 07, 2021
Amount		$ 2,095
Coupon		3.19%
Call Date		Not Applicable
Fixed Rate Advance Maturity Date 12-Oct-21
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Oct. 12, 2021
Amount		$ 2,089
Coupon		3.23%
Call Date		Not Applicable
Fixed Rate Advance Maturity Date 6 Jun 22
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Jun. 06, 2022
Amount		$ 10,000
Coupon		2.05%
Call Date		Not Applicable

[1] Weighted average coupon rate.

XML

ADVANCES FROM FEDERAL HOME LOAN BANK (Details Textuals) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) Advance	Jun. 30, 2016 USD ($)
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Average balance outstanding	$ 20,000	$ 20,000	$ 21,667	$ 20,000
Interest rate swap contracts
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Average balance outstanding			$ 20,000
Number of federal home loan bank advances | Advance			2
FHLB advance associated with an interest rate swap contract			$ 10,000
Weighted average effective cost			117.00%

XML

DERIVATIVES (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
Derivative [Line Items]
Unrealized Gain	$ 499	$ (202)
Interest rate swap contract
Derivative [Line Items]
Notional Amount	$ 10,000	$ 10,000
Pay Rate	1.15%	1.15%
Receive Rate	1 Month Libor	1 Month Libor
Maturity Date	Apr. 06, 2021	Apr. 06, 2021
Unrealized Gain	$ 214	$ (92)
Interest rate swap contract
Derivative [Line Items]
Notional Amount	$ 10,000	$ 10,000
Pay Rate	1.18%	1.18%
Receive Rate	1 Month Libor	1 Month Libor
Maturity Date	Jun. 13, 2021	Jun. 13, 2021
Unrealized Gain	$ 221	$ (103)
Interest rate swap contracts
Derivative [Line Items]
Notional Amount	$ 1,100	$ 1,100
Pay Rate	4.10%	4.10%
Receive Rate	1 Month Libor +276 bp	1 Month Libor +276 bp
Maturity Date	Aug. 01, 2026	Aug. 01, 2026
Unrealized Gain	$ 64	$ (7)

XML

DERIVATIVES (Detail Textuals) $ in Millions	Jun. 30, 2017 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Interest rate swap agreements outstanding amount	$ 20

XML

INCOME TAXES - Items that gave rise to significant portions of deferred income taxes (Details) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Deferred tax assets:
Allowance for loan losses	$ 1,647	$ 1,289
Nonaccrual interest	286	163
Accrued vacation	12	13
Capital loss carryforward	387	378
Split dollar life insurance	18	18
Post-retirement benefits	97	96
Other real estate owned	3
Unrealized losses on available for sale securities	524
Goodwill	2,729
Purchase accounting (Polonia Bancorp)	935
Unrealized losses on interest rate swaps		69
Employee benefit plans	327	434
Total deferred tax assets	6,965	2,460
Valuation allowance	(387)	(378)
Total deferred tax assets, net of valuation allowance	6,578	2,082
Deferred tax liabilities:
Property	393	423
Unrealized gains on available for sale securities		500
Unrealized gains on interest rate swaps		12
Section 481(a) Adjustment	170
Deferred loan fees	534	578
Total deferred tax liabilities	1,097	1,513
Net deferred tax assets	$ 5,481	$ 569

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INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Income Tax Disclosure [Abstract]
Valuation allowance	$ 387	$ 378

XML

STOCK COMPENSATION PLANS - Summary of non-vested stock award activity (Details) - $ / shares	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Number of Shares
Nonvested stock awards at October 1	172,788	241,428
Granted	17,128
Forfeited		(30,180)
Vested	(43,755)	(55,279)
Nonvested stock awards at the June 30	146,161	155,969
Weighted Average Grant Date Fair Value
Nonvested stock awards at October 1	$ 12.03	$ 11.74
Granted	17.43
Forfeited		11.55
Vested	11.59	11.59
Nonvested stock awards at the June 30	$ 12.78	$ 11.83

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STOCK COMPENSATION PLANS - Summary of status of stock options under Stock Option Plan (Details 1) - 2008 Option Plan and 2014 SIP - $ / shares	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Number of Shares
Outstanding at October 1	921,909	1,074,430
Granted	47,828
Exercised	(40,757)	(89,358)
Forfeited		(80,476)
Outstanding at June 30	928,980	904,596
Exercisable at June 30	552,435	489,679
Weighted Average Exercise Price
Outstanding at October 1	$ 11.7	$ 11.92
Granted	17.48
Exercised	11.48	11.61
Forfeited		11.52
Outstanding at June 30	11.85	11.99
Exercisable at June 30	$ 11.43	$ 11.45

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STOCK COMPENSATION PLANS (Detail Textuals) - USD ($) $ in Thousands	1 Months Ended		9 Months Ended		12 Months Ended
	Jan. 31, 2014	Dec. 31, 2013	Jun. 30, 2017	Jun. 30, 2016	Sep. 30, 2005	Dec. 31, 2016	Sep. 30, 2016
Employee Stock Ownership Plan (ESOP) Disclosures [Line Items]
ESOP shares allocated to participant's accounts			8,879	26,649
Compensation expense of ESOP			$ 139	$ 384
Number of treasury share purchased			1,811,264				1,499,265
Amount allocated to purchase treasury stock			$ 26,692				$ 21,098
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 held by ESOP			394,156
ESOP shares allocated to participant's accounts			243,734
Additional ESOP shares allocated to participant's accounts						35,517
Compensation expense of ESOP			$ 139	$ 384
Number of treasury share purchased			115,000
Long-term Debt			$ 5,200
Number of shares used to payoff debt			303,115

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STOCK COMPENSATION PLANS (Detail Textuals 1) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Aug. 31, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares purchased by RRP trust		42,791
Number of shares granted		17,128
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		$ 2.5
Average price per share of common stock purchased in the open market		$ 11.49
Percentage of vesting per year		20.00%
Vesting period of awards granted		5 years
Number of shares granted	7,473

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STOCK COMPENSATION PLANS (Detail Textuals 2) - USD ($)	1 Months Ended				3 Months Ended			9 Months Ended
	May 31, 2017	Mar. 31, 2017	Aug. 31, 2016	Feb. 28, 2015	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchased for award								42,791
Number of shares granted								17,128
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								467,758
Number of shares purchased for award				608,737
Number of shares granted			18,866
2014 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			3,027
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 granted	25,000	22,828	8,634	608,737
2014 Stock Incentive Plan | Restricted stock awards or units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock available for issuance				285,655
Number of forfeit shares exceptional for award								53,462
Number of shares granted				233,500		17,128
2008 RRP and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchased for award				587,112
2008 RRP and 2014 SIP | Restricted stock awards or units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense					$ 149,000		$ 87,000	$ 430,000	$ 329,000
Income tax benefit realized					51,000		30,000	146,000	112,000
Additional compensation expense for shares awarded remained unrecognized					1,200,000			$ 1,200,000
Weighted average period for recognition of nonvested awards								3 years 1 month 6 days
2008 Option Plan and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional compensation expense for options awarded remained unrecognized					1,500,000			$ 1,500,000
2008 Option Plan and 2014 SIP | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense					139,000		106,000	397,000	322,000
Income tax benefit realized					$ 17,000		$ 36,000	$ 49,000	$ 44,000
Weighted average period for recognition of nonvested awards								3 years 2 months 12 days

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STOCK COMPENSATION PLANS (Detail Textuals 3) - 2008 Option Plan and 2014 SIP - Stock Options	9 Months Ended
	Jun. 30, 2017 $ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual term for options outstanding	4 years 6 months
Granted in fiscal 2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	$ 2.98
Granted in fiscal 2010
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	2.92
Granted in fiscal 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	3.34
Granted in fiscal 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	4.67
Granted in fiscal 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	$ 4.58
Fair value, valuation method	Black-Scholes pricing model
Exercise price and fair value	$ 12.23
Expected term	7 years
Volatility rate	38.16%
Expected interest rate	1.62%
Expected yield	0.98%
Granted in fiscal 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	$ 2.13
Fair value, valuation method	Black-Scholes pricing model
Exercise price and fair value	$ 14.42
Expected term	7 years
Volatility rate	13.82%
Expected interest rate	1.36%
Expected yield	0.80%
Granted in fiscal 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share	$ 3.18
Grants in March and May 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value, valuation method	Black-Scholes pricing model
Exercise price and fair value	$ 17.43
Expected term	7 years
Volatility rate	14.40%
Expected interest rate	2.22%
Expected yield	0.69%

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COMMITMENTS AND CONTINGENT LIABILITIES (Detail Textuals) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Exposure related to loans sold to FHLB	$ 1,800
Aggregate undisbursed portion of loans-in-process	50,792	$ 5,371
Loan Origination Commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Exposure related to loans sold to FHLB	34,700	9,900
Aggregate undisbursed portion of loans-in-process	$ 50,800	$ 5,400
Loan Origination Commitments | Minimum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	4.00%	3.75%
Loan Origination Commitments | Maximum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	5.50%	5.00%
Unused lines of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Exposure related to loans sold to FHLB	$ 8,900	$ 3,300
Letters of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Exposure related to loans sold to FHLB	$ 1,500	$ 1,900

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FAIR VALUE MEASUREMENT - Assets measured at fair value on recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2017	Sep. 30, 2016
Assets:
Assets, total	$ 183,938	$ 138,694
Liabilities
Liabilities, total		202
Level 1
Assets:
Assets, total	59	42
Liabilities
Liabilities, total
Level 2
Assets:
Assets, total	183,879	138,652
Liabilities
Liabilities, total		202
Level 3
Assets:
Assets, total
Liabilities
Liabilities, total
U.S. Government and agency obligations
Assets:
Assets, total	20,620	21,024
U.S. Government and agency obligations | Level 1
Assets:
Assets, total
U.S. Government and agency obligations | Level 2
Assets:
Assets, total	20,620	21,024
U.S. Government and agency obligations | Level 3
Assets:
Assets, total
Mortgage-backed securities - U.S. Government agencies
Assets:
Assets, total	125,715	91,575
Mortgage-backed securities - U.S. Government agencies | Level 1
Assets:
Assets, total
Mortgage-backed securities - U.S. Government agencies | Level 2
Assets:
Assets, total	125,715	91,575
Mortgage-backed securities - U.S. Government agencies | Level 3
Assets:
Assets, total
Corporate bonds
Assets:
Assets, total	37,045	26,053
Corporate bonds | Level 1
Assets:
Assets, total
Corporate bonds | Level 2
Assets:
Assets, total	37,045	26,053
Corporate bonds | Level 3
Assets:
Assets, total
FHLMC preferred stock
Assets:
Assets, total	59	42
FHLMC preferred stock | Level 1
Assets:
Assets, total	59	42
FHLMC preferred stock | Level 2
Assets:
Assets, total
FHLMC preferred stock | Level 3
Assets:
Assets, total
Interest rate swap contracts
Assets:
Assets, total	499
Liabilities
Liabilities, total		202
Interest rate swap contracts | Level 1
Assets:
Assets, total
Liabilities
Liabilities, total
Interest rate swap contracts | Level 2
Assets:
Assets, total
Liabilities
Liabilities, total		202
Interest rate swap contracts | Level 3
Assets:
Assets, total	$ 499
Liabilities
Liabilities, total

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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	Jun. 30, 2017	Sep. 30, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 18,092	$ 19,429
Real estate owned	192	581
Total	18,284	20,010
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
Total
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impaired loans	18,092	19,429
Real estate owned	192	581
Total	$ 18,284	$ 20,010

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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		9 Months Ended	12 Months Ended
		Jun. 30, 2017	Sep. 30, 2016
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		$ 18,284	$ 20,010
Level 3
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		18,284	20,010
Level 3 | Impaired loan | Property Appraisals Valuation Technique
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Fair Value		$ 18,092	$ 19,429
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
Level 3 | Impaired loan | Property Appraisals Valuation Technique | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Management discount rate		6.00%	6.00%
Level 3 | Impaired loan | Property Appraisals Valuation Technique | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Management discount rate		10.00%	46.00%
Level 3 | Impaired loan | Property Appraisals Valuation Technique | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
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		$ 581	$ 581
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
Level 3 | Real estate owned | Property Appraisals Valuation Technique | Weighted Average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Management discount rate		10.00%	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	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Sep. 30, 2015
Assets:
Cash and cash equivalents	$ 22,927	$ 12,440	$ 38,572	$ 11,272
Certificates of deposit	1,853	1,853
Investment and mortgage-backed securities available for sale	183,439	138,694
Investment and mortgage-backed securities held to maturity	59,654	39,971
Loans receivable, net	544,422	344,948
Accrued interest receivable	3,089	1,928
Other real estate owned	192	581
Federal Home Loan Bank stock	5,767	2,463
Bank owned life insurance	27,877	13,055
Interest rate swap contracts	499
Liabilities:
Checking accounts	64,143	38,788
Money market deposit accounts	81,211	55,552
Passbook, club and statement savings accounts	104,446	70,924
Certificates of deposit	365,046	223,937
Accrued interest payable	1,339	1,403
Advances from FHLB short-term	20,000	20,000	$ 20,000
Advances from FHLB long-term	88,078	30,638
Advances from borrowers for taxes and insurance	3,982	1,748
Interest rate swap contracts		202
Fair Value
Assets:
Cash and cash equivalents	22,927	12,440
Certificates of deposit	1,853	1,853
Investment and mortgage-backed securities available for sale	183,439	138,694
Investment and mortgage-backed securities held to maturity	58,570	40,700
Loans receivable, net	548,697	344,100
Accrued interest receivable	3,089	1,928
Other real estate owned	192
Federal Home Loan Bank stock	5,767	2,463
Bank owned life insurance	27,877	13,055
Interest rate swap contracts	499
Liabilities:
Checking accounts	64,143	38,788
Money market deposit accounts	81,211	55,552
Passbook, club and statement savings accounts	104,446	70,924
Certificates of deposit	360,527	225,383
Accrued interest payable	1,339	1,403
Advances from FHLB short-term	20,000	20,000
Advances from FHLB long-term	87,372	30,222
Advances from borrowers for taxes and insurance	3,982	1,748
Interest rate swap contracts		202
Level 1
Assets:
Cash and cash equivalents	22,927	12,440
Certificates of deposit	1,853	1,853
Investment and mortgage-backed securities available for sale	59	42
Investment and mortgage-backed securities held to maturity
Loans receivable, net
Accrued interest receivable	3,089	1,928
Other real estate owned	192
Federal Home Loan Bank stock	5,767	2,463
Bank owned life insurance	27,877	13,055
Interest rate swap contracts
Liabilities:
Checking accounts	64,143	38,788
Money market deposit accounts	81,211	55,552
Passbook, club and statement savings accounts	104,446	70,924
Certificates of deposit
Accrued interest payable	1,339	1,403
Advances from FHLB short-term	20,000	20,000
Advances from FHLB long-term
Advances from borrowers for taxes and insurance	3,982	1,748
Interest rate swap contracts
Level 2
Assets:
Cash and cash equivalents
Certificates of deposit
Investment and mortgage-backed securities available for sale	183,380	138,652
Investment and mortgage-backed securities held to maturity	58,570	40,700
Loans receivable, net
Accrued interest receivable
Other real estate owned
Federal Home Loan Bank stock
Bank owned life insurance
Interest rate swap contracts	499
Liabilities:
Checking accounts
Money market deposit accounts
Passbook, club and statement savings accounts
Certificates of deposit
Accrued interest payable
Advances from FHLB short-term
Advances from FHLB long-term
Advances from borrowers for taxes and insurance
Interest rate swap contracts		202
Level 3
Assets:
Cash and cash equivalents
Certificates of deposit
Investment and mortgage-backed securities available for sale
Investment and mortgage-backed securities held to maturity
Loans receivable, net	548,697	344,100
Accrued interest receivable
Other real estate owned
Federal Home Loan Bank stock
Bank owned life insurance
Interest rate swap contracts
Liabilities:
Checking accounts
Money market deposit accounts
Passbook, club and statement savings accounts
Certificates of deposit	360,527	225,383
Accrued interest payable
Advances from FHLB short-term
Advances from FHLB long-term	87,372	30,222
Advances from borrowers for taxes and insurance
Interest rate swap contracts

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FAIR VALUE MEASUREMENT (Detail Textuals) - USD ($) $ in Millions	Jun. 30, 2017	Sep. 30, 2016
Level 2
Financing Receivable, Impaired [Line Items]
Collateral dependent impaired loans, fair value	$ 18.0	$ 19.4

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Jun. 30, 2017	Jun. 30, 2017
Finite-lived Intangible Assets [Roll Forward]
Balance, Goodwill
Additions/Adjustments		7,163
Balance, Goodwill	$ 7,163	7,163
Balance, Total
Additions/Adjustments		7,985
Amortization	(37)	(75)
Balance, Total	7,910	7,910
Core deposit intangibles
Finite-lived Intangible Assets [Roll Forward]
Balance
Additions/Adjustments		822
Amortization		(75)
Balance	$ 747	$ 747
Amortization Period		10 years

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) $ in Thousands	Jun. 30, 2017 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2017	$ 37
2018	138
2019	123
2020	108
Thereafter	$ 341

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BUSINESS COMBINATIONS (Details) - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
Liabilities assumed:
Goodwill resulting from the acquisition	$ 7,163
Polonia Bancorp
Consideration paid:
Common stock issued (1,274,197 shares) at a fair value per share of $17.12 per share.	21,814
Cash for common stock exchanged	18,944
Cash in lieu of fractional shares	1
Total Consideration	40,759
Assets acquired:
Cash and due from banks	47,901
Investments available for sale	42,164
Loans	160,157
Premises and equipment	6,902
Deferred taxes	3,921
Bank-owned life insurance	4,316
Core deposit intangible	822
Other assets	5,802
Total assets	271,985
Liabilities assumed:
Deposits	172,243
FHLB advances, short-term	7,000
FHLB advances, long -term	50,232
Other liabilities	8,914
Total liabilities	238,389
Net assets acquired	33,596
Goodwill resulting from the acquisition	$ 7,163

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BUSINESS COMBINATIONS (Parentheticals) (Details) - Polonia Bancorp	9 Months Ended
	Jun. 30, 2017 $ / shares shares
Business Acquisition [Line Items]
Number of shares issued in business combination (in shares) | shares	1,274,197
Shares price in business combination | $ / shares	$ 17.12

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BUSINESS COMBINATIONS (Details 1) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2017	Sep. 30, 2016
Estimated adjustments to reflect liabilities assumed at fair value:
Goodwill resulting from merger	$ 7,163
Polonia Bancorp
Polonia Common Stock:
Total shares of common stock outstanding	3,416,311
Common stock issued cap	1,708,155
Shares redeemed for cash cap	1,708,156
Prudential common stock issued (conversion rate 0.7460)	1,274,197
Prudential closing price at December 31, 2016	$ 17.12
Cash-out rate paid per share for Polonia Bancorp common stock	$ 11.09
Purchase consideration assigned to Polonia Bancorp shares exchanged for Company Common Stock	$ 21,814
Cash Paid to Polonia for Polonia Bancorp shares	18,944
Cash Paid for fractional shares	1
Total Consideration estimated at fair value	40,759
Net Assets Acquired
Polonia Bancorp stockholders' equity	35,412
Core deposit intangible assets	822
Estimated adjustments to reflect assets acquired at fair value:
Investment securities	(781)
Portfolio loans	(4,643)
Allowance for loan and lease losses	1,002
Premises	3,049
Other Assets	(73)
Deferred Taxes	934
Total fair value adjustment to assets acquired	310
Estimated adjustments to reflect liabilities assumed at fair value:
Time deposits	894
Borrowings	1,232
Total fair value adjustment to liabilities assumed	2,126
Total net assets acquired	33,596
Goodwill resulting from merger	$ 7,163

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BUSINESS COMBINATIONS (Parentheticals) (Details 1)	Jun. 30, 2017
Business Combinations [Abstract]
Business Acquisitions Exchange Ratio	0.7460

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BUSINESS COMBINATIONS (Details 2) - Polonia Bancorp - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Business Acquisition [Line Items]
Net interest income		$ 6,053	$ 5,681	$ 14,998	$ 17,648
Provision for loan and leases losses		30	150	2,580	225
Net interest income after provision for loan and lease losses		6,023	5,531	12,418	17,423
Non-interest income		625	721	1,500	2,134
Non-interest expenses		3,500	5,156	12,981	17,582
Income before income taxes		3,148	1,096	937	1,975
Income tax expense		1,031	318	230	704
Net income		$ 2,117	$ 778	$ 707	$ 1,271
Per share data
Weighed average basic shares outstanding	[1]	8,652,699	8,655,077	8,202,850	8,655,077
Dilutive shares		656,370	270,973	570,792	246,791
Adjusted weighted-average dilutive shares		9,309,069	8,926,050	8,773,642	8,901,868
Basic earnings per common share		$ 0.25	$ 0.09	$ 0.08	$ 0.1
Dilutive earnings per common share		$ 0.25	$ 0.09	$ 0.08	$ 0.1

[1] Weighted-average basis shares outstanding for both periods reflected are the Company's weighted-average shares plus the 1,274,197, shares that were issued as consideration for the Merger. The dilutive shares reflect the Company's estimated diluted shares for the period.

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BUSINESS COMBINATIONS (Parentheticals) (Details 2)	9 Months Ended
	Jun. 30, 2017 shares
Polonia Bancorp
Business Acquisition [Line Items]
Number of shares issued in business combination	1,274,197

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BUSINESS COMBINATIONS (Details Textuals) $ / shares in Units, $ in Thousands	9 Months Ended
	Jun. 30, 2017 USD ($) $ / shares shares
Business Acquisition [Line Items]
Business Acquisitions Exchange Ratio	0.7460
Core Deposits [Member]
Business Acquisition [Line Items]
Amortization Period	10 years
Polonia Bancorp
Business Acquisition [Line Items]
Business Acquisitions Exchange Ratio	0.7460
Business Acquisition Per Share Cash Consideration | $ / shares	$ 11.09
Percentage stock consideration in business acquisition	50.00%
Percentage cash consideration in business acquisition	50.00%
Cash consideration for merger | $	$ 18,944
Number of shares issued in business combination | shares	1,274,197