10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC  20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2019
	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 every Interactive Data File required to be submitted 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 such files).

x Yes     ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition 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  ¨	Smaller reporting company x
	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

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	PBIP	Nasdaq Stock Market

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practical date: as of April 30, 2019, 10,819,006 shares were issued and 8,920,946 were outstanding.

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION:
Item 1.	Consolidated Financial Statements
	Unaudited Consolidated Statements of Financial Condition March 31, 2019 and September 30, 2018	2
	Unaudited Consolidated Statements of Operations for the Three and Six Months Ended March 31, 2019 and 2018	3
	Unaudited Consolidated Statements of Comprehensive Income (Loss) for for the Three and Six Months Ended March 31, 2019 and 2018	4
	Unaudited Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended March 31, 2019 and 2018	5
	Unaudited Consolidated Statements of Cash Flows for the Six Months Ended March 31, 2019 and 2018	7
	Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	42
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	55
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	57
Item 3.	Defaults Upon Senior Securities	57
Item 4.	Mine Safety Disclosures	57
Item 5.	Other Information	57
Item 6.	Exhibits	57
SIGNATURES		58

1

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands, Except Per Share Data)
ASSETS
Cash and amounts due from depository institutions	$	2,255		$	2,457
Interest-bearing deposits		48,338			45,714
Total cash and cash equivalents		50,593			48,171
Certificates of deposit		2,351			1,604
Investment and mortgage-backed securities available for sale (amortized cost— March 31, 2019, $448,907; September 30, 2018, $316,719)		446,166			306,187
Investment and mortgage-backed securities held to maturity (fair value— March 31, 2019, $56,159; September 30, 2018, $55,927)		57,361			59,852
Equity securities (amortized cost March 31, 2019, $6)		72			-
Loans receivable—net of allowance for loan losses (March 31, 2019, $5,227; September 30, 2018, $5,167)		581,555			602,932
Accrued interest receivable		4,314			3,825
Real estate owned		423			1,026
Restricted bank stock—at cost		10,383			7,585
Office properties and equipment—net		7,355			7,439
Bank owned life insurance		28,996			28,691
Deferred tax assets-net		4,112			4,655
Goodwill		6,102			6,102
Core deposit intangible		508			571
Prepaid expenses and other assets		2,107			2,530
TOTAL ASSETS	$	1,202,398		$	1,081,170
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits:
Noninterest-bearing	$	12,350		$	13,677
Interest-bearing		813,149			770,581
Total deposits		825,499			784,258
Advances from Federal Home Loan Bank (short-term)		25,500			10,000
Advances from Federal Home Loan Bank (long-term)		199,594			144,683
Accrued interest payable		2,814			3,232
Advances from borrowers for taxes and insurance		2,260			2,083
Accounts payable and accrued expenses		12,840			8,505
Total liabilities		1,068,507			952,761
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 issued and 8,931,400 outstanding at March 31, 2019; 10,819,006 issued and 8,987,356 outstanding at September 30, 2018		108			108
Additional paid-in capital		117,976			118,345
Treasury stock, at cost: 1,887,606 shares at March 31, 2019 and 1,831,650 shares at September 30, 2018		(28,968	)		(27,744	)
Retained earnings		49,300			45,854
Accumulated other comprehensive loss		(4,525	)		(8,154	)
Total stockholders' equity		133,891			128,409
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,202,398		$	1,081,170

See notes to unaudited consolidated financial statements.

2

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three Months Ended March 31,						Six Months Ended March 31,
	2019			2018			2019			2018
	(Dollars in Thousands, Except Per Share Data)
INTEREST INCOME:
Interest on loans	$	6,722		$	6,261		$	13,184		$	12,368
Interest on mortgage-backed securities		2,553			851			4,308			1,693
Interest and dividends on investments		1,716			1,060			3,248			2,009
Interest on interest-bearing assets		144			183			396			321
Total interest income		11,135			8,355			21,136			16,391
INTEREST EXPENSE:
Interest on deposits		3,540			1,571			6,580			2,983
Interest on advances from Federal Home Loan Bank(short-term)		122			59			189			141
Interest on advances from Federal Home Loan Bank(long-term)		1,149			497			2,028			903
Total interest expense		4,811			2,127			8,797			4,027
NET INTEREST INCOME		6,324			6,228			12,339			12,364
PROVISION FOR LOAN LOSSES		-			150			-			360
NET INTEREST  INCOME AFTER PROVISION FOR LOAN LOSSES		6,324			6,078			12,339			12,004
NON-INTEREST INCOME:
Fees and other service charges		156			161			334			328
Gain on the sale of investments and mortgage-backed securities		117			-			117			-
Income from bank owned life insurance		149			156			303			320
Holding gain on equity securities		34			-			34			-
Other		86			250			134			334
Total non-interest income		542			567			922			982
NON-INTEREST EXPENSE:
Salaries and employee benefits		2,209			2,037			4,383			4,011
Data processing		201			189			384			365
Professional services		374			402			775			1,194
Office occupancy		275			308			513			579
Depreciation		155			156			310			312
Director compensation		65			61			130			120
Deposit insurance premium		126			80			303			141
Advertising		72			52			153			112
Core deposit amortization		29			34			63			71
Other		640			550			1,124			1,007
Total non-interest expense		4,146			3,869			8,138			7,912
INCOME BEFORE INCOME TAXES		2,720			2,776			5,123			5,074
INCOME TAXES:
Current expense		676			622			1,235			1,270
Deferred (benefit) expense		(296	)		(3	)		(426	)		1,613
Total income tax expense		380			619			809			2,883
NET INCOME	$	2,340		$	2,157		$	4,314		$	2,191
BASIC EARNINGS PER SHARE	$	0.27		$	0.24		$	0.49		$	0.25
DILUTED EARNINGS PER SHARE	$	0.26		$	0.24		$	0.48		$	0.24
DIVIDENDS PER SHARE	$	0.05		$	0.05		$	0.10		$	0.25

See notes to unaudited consolidated financial statements.

3

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Three months ended March 31,						Six months ended March 31,
	2019			2018			2019			2018
		(Dollars in Thousands)
Net income	$	2,340		$	2,157		$	4,314		$	2,191
Unrealized holding gains (losses) on available-for-sale securities		4,522			(3,596	)		7,945			(4,703	)
Tax effect		(949	)		756			(1,668	)		1,132
Unrealized holding gains (losses) on interest rate swaps		(2,466	)		190			(3,204	)		234
Tax effect		518			(40	)		673			(55	)
Reclassification adjustment for net gains recorded in net income		(117	)		-			(117	)		-
Tax effect		25			-			25			-
Total other comprehensive income (loss)		1,533			(2,690	)		3,654			(3,392	)
Comprehensive income (loss)	$	3,873		$	(533	)	$	7,968		$	(1,201	)

See notes to unaudited consolidated financial statements.

4

PRUDENTIAL bancorp, inc. and subsidiarIES

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

												Accumulated
			Additional									Other			Total
	Common		Paid-In			Treasury			Retained			Comprehensive			Stockholders'
	Stock		Capital			Stock			Earnings			Loss			Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, January 1, 2019	$	108	$	118,621		$	(29,399	)	$	47,381		$	(6,033	)	$	130,678
Net income										2,340						2,340
Other comprehensive income													1,533			1,533
Dividends paid ($0.05 per share)										(446	)					(446	)
Purchase of treasury stock (10,200 shares)							(561	)								(561	)
Treasury stock used for employee benefit plans (48,636 shares)				(921	)		992									71
Stock option expense				126												126
Restricted share award expense				150												150
Reclassification for adoption of ASU 2016-01										25			(25	)		-
BALANCE, March 31, 2019	$	108	$	117,976		$	(28,968	)	$	49,300		$	(4,525	)	$	133,891

												Accumulated
			Additional									Other			Total
	Common		Paid-In			Treasury			Retained			Comprehensive			Stockholders'
	Stock		Capital			Stock			Earnings			Loss			Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, January 1, 2018	$	108	$	119,039		$	(27,296	)	$	43,328		$	(1,765	)	$	133,414
Net income										2,157						2,157
Other comprehensive loss													(2,690	)		(2,690	)
Dividends paid ($0.05 per share)										(450	)					(450	)
Purchase of treasury stock (50,889 shares)							(906	)								(906	)
Treasury stock used for employee benefit plans (67,369 shares)				(691	)		1,025									334
Stock option expense				70												70
Restricted share award expense				131												131
BALANCE, March 31, 2018	$	108	$	118,549		$	(27,177	)	$	45,035		$	(4,455	)	$	132,060

See notes to unaudited consolidated financial statements

5

												Accumulated
			Additional									Other			Total
	Common		Paid-In			Treasury			Retained			Comprehensive			Stockholders'
	Stock		Capital			Stock			Earnings			Loss			Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, October 1, 2018	$	108	$	118,345		$	(27,744	)	$	45,854		$	(8,154	)	$	128,409
Net income										4,314						4,314
Other comprehensive income													3,654			3,654
Dividends paid ($0.10 per share)										(893	)					(893	)
Purchase of treasury stock (106,365 shares)							(2,248	)								(2,248	)
Treasury stock used for employee benefit plans (50,409 shares)				(953	)		1,024									71
Stock option expense				277												277
Restricted share award expense				307												307
Reclassification for adoption of ASU 2016-01										25			(25	)		-
BALANCE, March 31, 2019	$	108	$	117,976		$	(28,968	)	$	49,300		$	(4,525	)	$	133,891

												Accumulated
			Additional									Other			Total
	Common		Paid-In			Treasury			Retained			Comprehensive			Stockholders'
	Stock		Capital			Stock			Earnings			Loss			Equity
	(Dollars in Thousands, Except Per Share Data)
BALANCE, October 1, 2017	$	108	$	118,751		$	(26,707	)	$	44,787		$	(760	)	$	136,179
Net income										2,191						2,191
Other comprehensive loss													(3,392	)		(3,392	)
Dividends paid ($0.25 per share)										(2,246	)					(2,246	)
Purchase of treasury stock (99,430 shares)							(1,804	)								(1,804	)
Treasury stock used for employee benefit plans (89,540 shares)				(691	)		1,334									643
Stock option expense				239												239
Restricted share expense				250												250
Reclassification due to change in federal income tax rate										303			(303	)		-
BALANCE, March 31, 2018	$	108	$	118,549		$	(27,177	)	$	45,035		$	(4,455	)	$	132,060

See notes to unaudited consolidated financial statements

6

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended  March 31,
	2019			2018
		(Dollars in Thousands)
OPERATING ACTIVITIES:
Net income	$	4,314		$	2,191
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		310			312
Net accretion of premiums/discounts		(766	)		234
Provision for loan losses		-			360
Net amortization of deferred loan fees and costs		(58	)		165
Share-based compensation expense for stock options and share awards		584			489
Income from bank owned life insurance		(303	)		(320	)
Loss (gain) on sale of other real estate owned		46			(60	)
Gain on sale of investments available for sale		(117	)		-
Holding gains on equity securities		(34	)		-
Deferred income tax expense (benefit)		(426	)		1,613
Changes in assets and liabilities which used cash:
Accrued interest receivable		(489	)		(614	)
Accrued interest payable		(418	)		(605	)
Other, net		601			(149	)
Net cash provided by operating activities		3,244			3,616
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale		(153,282	)		(52,747	)
Purchase of investment and mortgage-backed securities held to maturity		-			(2,458	)
Sale of investments available for sale		12,770			-
Loans originated		(45,722	)		(54,131	)
Principal collected on loans		67,157			40,860
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity		2,455			681
Available-for-sale		9,461			7,140
Redemption of FHLB Stock		5,589			1,596
Purchase of FHLB stock		(8,387	)		(2,353	)
Proceeds from sale of other real estate owned		603			278
Purchases of equipment		(225	)		(179	)
Net cash used in investing activities		(109,581	)		(61,313	)
FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts, and savings accounts		10,792			(10,064	)
Net increase in certificates of deposit		30,449			48,784
Proceeds from FHLB advances - short term		15,500			-
Proceeds from FHLB advances - long term		74,223			39,500
Repayment of FHLB advances - long term		(19,312	)		(27,194	)
Increase in advances from borrowers for taxes and insurance		177			283
Cash dividends paid		(893	)		(2,246	)
Treasury stock used for employee benefit plans		71			643
Purchase of treasury stock		(2,248	)		(1,804	)
Net cash provided by financing activities		108,759			47,902

7

PRUDENTIAL BANCORP, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS -continued

	Six Months Ended March 31.
	2019		2018
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		2,422		(9,795	)
CASH AND CASH EQUIVALENTS—Beginning of period		48,171		27,903
CASH AND CASH EQUIVALENTS—End of period	$	50,593	$	18,108
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest on deposits and advances from Federal
Home Loan Bank	$	9,215	$	4,632
Income taxes		25		1,400
Loans transferred to other real estate owned		-		111

See the accompany notes to the unaudited consolidated financial statements.

8

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 branch office), administrative office, and nine additional full-service branch offices. Eight 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 10 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.

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019, 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, 2018. The significant accounting policies followed in the presentation of interim financial results are the same as those followed on an annual basis. These policies are presented on pages 84 through 88 of the Annual Report on Form 10-K for the year ended September 30, 2018.

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, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

Effective October 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers – Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard utilizing the modified retrospective approach with a cumulative effect of adoption for the impact from uncompleted contracts at the date of adoption. The adoption of this guidance did not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustments were recorded.

9

Management determined that the primary sources of revenue emanating from interest and dividend income on loans and securities along with noninterest revenue resulting from investment security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit cards fees, and income on bank-owned life insurance are not within the scope of ASC 606. As a result, no changes were made during the period related to these sources of revenue, which cumulatively comprise 98 percent of the total revenue of the Company. Services within the scope of ASC 606 include income from service charges on deposit accounts, other service income, ATM fees and gain on sale of OREO, net. For these accounts, fees are related to specific customer transactions and are attributable to specific performance obligations of the Bank where the revenue is recognized at a defined point in time, completion of the requested service/transaction.

Effective October 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires 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 (g) 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. The adoption of this Update did not have a significant impact on the Company’s financial statements.

Recent Accounting Pronouncements

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 one percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

10

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

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. 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 and results of operations.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718), which simplified the accounting for nonemployee share-based payment transactions. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update improve the following areas of nonemployee share-based payment accounting: (a) the overall measurement objective, (b) the measurement date, (c) awards with performance conditions, (d) classification reassessment of certain equity-classified awards, (e) calculated value (nonpublic entities only), and (f) intrinsic value (nonpublic entities only). The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. 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. 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements. The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

11

In October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815). The amendments in this Update permit use of the Overnight Index Swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. For public business entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, which addressed issues lessors sometimes encounter. Specifically addressed in this Update were issues related to 1) determining the fair value of the underlying asset by the lessor that are not manufacturers or dealers (generally financial institutions and captive finance companies), and 2) lessors that are depository and lending institutions should classify principal and payments received under sales-type and direct financing leases within investing activities in the cash flow statement. The ASU also exempts both lessees and lessors from having to provide the interim disclosures required by ASC 250-10-50-3 in the fiscal year in which a company adopts the new leases standard. The amendments addressing the two lessor accounting issues are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the effective date is for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. 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 available to common stockholders by the weighted average number of shares of common stock issued, net of any treasury shares and unearned restricted share awards, during the period. Diluted earnings per share is calculated by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding, net of any treasury shares, after consideration of the potential dilutive effect of common stock equivalents, based upon the treasury stock method using an average market price for the period.

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

	Three Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	2,340	$	2,340	$	2,157	$	2,157
Weighted average shares outstanding		8,777,252		8,777,252		8,851,805		8,851,805
Effect of common stock equivalents		-		144,309		-		326,295
Adjusted weighted average shares used in earnings per share computation		8,777,252		8,921,561		8,851,805		9,178,100
Earnings per share - basic and diluted	$	0.27	$	0.26	$	0.24	$	0.24

	Six Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	4,314	$	4,314	$	2,191	$	2,191
Weighted average shares outstanding		8,790,822		8,790,822		8,853,479		8,853,479
Effect of common stock equivalents		-		131,262		-		351,436
Adjusted weighted average shares used in earnings per share computation		8,790,822		8,922,084		8,853,479		9,204,915
Earnings  per share - basic and diluted	$	0.49	$	0.48	$	0.25	$	0.24

As of March 31, 2019 and 2018, there were 584,832 and 873,159 shares of common stock, respectively, subject to options with an exercise price less than the then current market and which were included in the computation of diluted earnings per share. At March 31, 2019 and 2018, there were 202,500 and 177,500 shares, respectively, that had exercise prices greater than the then current market value and were considered anti-dilutive at such dates.

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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, for the periods presented:

	Three Months Ended March 31,									Three Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss) on AFS securities (a)			Unrealized gain (loss) on interest rate swaps (a)			Total accumulated other comprehensive (loss) income			Unrealized gain (loss) on AFS securities (a)			Unrealized gain (loss) on interest rate swaps (a)		Total accumulated other comprehensive (loss) income
Beginning balance, January 1	$	(5,615	)	$	(418	)	$	(6,033	)	$	(2,125	)	$	360	$	(1,765	)
Other comprehensive (loss) income before reclassifications		3,572			(1,947	)		1,625			(2,840	)		150		(2,690	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,965	)		510		(4,455	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)		-			-		-
Reclassification for net gains recorded in net income		(92	)		-			(92	)		-			-		-
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

(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, for the periods presented:

	Six Months Ended March 31,									Six Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss) on AFS securities (a)			Unrealized gain (loss) on interest rate swaps (a)			Total accumulated other comprehensive (loss) income			Unrealized gain (loss) on AFS securities (a)			Unrealized gain (loss) on interest rate swaps (a)		Total accumulated other comprehensive (loss) income
Beginning balance, October 1	$	(8,320	)	$	166		$	(8,154	)	$	(1,091	)	$	331	$	(760	)
Other comprehensive (loss) income before reclassification		6,277			(2,531	)		3,746			(3,571	)		179		(3,392	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,662	)		510		(4,152	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)
Reclassification for net gains recorded in net income		(92	)		-			(92	)		(303	)		-		(303	)
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

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

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4. INVESTMENT AND MORTGAGE-BACKED SECURITIES

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

	March 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,253	$	-	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		307,219		1,859		(3,361	)		305,717
State and political subdivisions		23,206		742		(1,155	)		22,793
Corporate bonds		93,229		436		(831	)		92,834
Total securities available for sale	$	448,907	$	3,037	$	(5,778	)	$	446,166
Securities Held to Maturity:
U.S. government and agency obligations	$	31,500	$	127	$	(1,669	)	$	29,958
Mortgage-backed securities - U.S. government agencies		5,337		166		(53	)		5,450
State and political subdivisions		20,524		356		(129	)		20,751
Total securities held to maturity	$	57,361	$	649	$	(1,851	)	$	56,159

	March 31, 2019
	Amortized		Gross		Gross		Fair
	Cost		Gains		Losses		Value
	(Dollars in Thousands)
Equity securities
FHLMC preferred stock	$	6	$	66	$	-	$	72
Total equity securities	$	6	$	66			$	72

The Company recognized net gains on equity securities of $34,000 and $0 for the six and three months ended March 31, 2019, respectively. No net gains or losses on sold equity securities were realized during the three or six months ended March 31, 2018.

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	September 30, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,562	$	-	$	(1,391	)	$	24,171
State and political subdivisions		22,078		-		(542	)		21,536
Mortgage-backed securities - U.S. government agencies		193,451		77		(6,168	)		187,360
Corporate bonds		75,622		-		(2,539	)		73,083
Total debt securities available for sale		316,713		77		(10,640	)		306,150
FHLMC preferred stock		6		31		-			37
Total securities available for sale	$	316,719	$	108	$	(10,640	)	$	306,187
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	85	$	(3,311	)	$	30,274
State and political subdivisions		20,574		2		(696	)		19,880
Mortgage-backed securities - U.S. government agencies		5,778		148		(153	)		5,773
Total securities held to maturity	$	59,852	$	235	$	(4,160	)	$	55,927

16

As of March 31, 2019, the Bank maintained $251.5 million of securities in a safekeeping account at the FHLB of Pittsburgh available to be used for collateral as a convenience. The Bank is not required to maintain any specific collateral for its borrowings; therefore these securities are not restricted and could be sold or transferred if needed.

The following table shows the gross unrealized losses and related fair values of the Company’s investment and mortgage-backed securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position as of March 31, 2019:

	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	$	-		$	-	$	(431	)	$	24,822	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		(233	)		31,387		(3,128	)		106,545		(3,361	)		137,932
State and political subdivisions		(1,155	)		22,793		-			-		(1,155	)		22,793
Corporate bonds		(123	)		15,120		(708	)		37,520		(831	)		52,640
Total securities available for sale	$	(1,511	)	$	69,300	$	(4,267	)	$	168,887	$	(5,778	)	$	238,187
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,669	)	$	28,831	$	-		$	-	$	(1,669	)	$	28,831
Mortgage-backed securities - U.S. government agencies		-			-		(53	)		2,034		(53	)		2,034
State and political subdivisions		-			-		(129	)		6,944		(129	)		6,944
Total securities held to maturity	$	(1,669	)	$	28,831	$	(182	)	$	8,978	$	(1,851	)	$	37,809
Total	$	(3,180	)	$	98,131	$	(4,449	)	$	177,865	$	(7,629	)	$	275,996

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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 as of September 30, 2018:

	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	$	(89	)	$	4,479	$	(1,302	)	$	19,692	$	(1,391	)	$	24,171
Mortgage-backed securities -
U.S. government agencies		(1,821	)		92,851		(4,347	)		86,268		(6,168	)		179,119
State and political subdivisions		(542	)		21,536		-			-		(542	)		21,536
Corporate debt securities		(1,719	)		58,753		(820	)		14,330		(2,539	)		73,083
Total debt securities available for sale	$	(4,171	)	$	177,619	$	(6,469	)	$	120,290	$	(10,640	)	$	297,909
Securities Held to Maturity:
U.S. government and agency obligations	$	-		$	-	$	(3,311	)	$	27,190	$	(3,311	)	$	27,190
Mortgage-backed securities -
U.S. government agencies		(106	)		2,630		(46	)		930		(152	)		3,560
State and political subdivisions		(234	)		11,238		(463	)		6,618		(697	)		17,856
Total securities held to maturity	$	(340	)	$	13,868	$	(3,820	)	$	34,738	$	(4,160	)	$	48,606
Total	$	(4,511	)	$	191,487	$	(10,289	)	$	155,028	$	(14,800	)	$	346,515

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

The Company assesses whether a credit loss exists with respect to a security by considering whether (1) the Company has the intent to sell the security, (2) it is more likely than not that it will be required to sell the security before recovery has occurred, or (3) it does not expect to recover the entire amortized cost basis of the security. The Company bifurcates the OTTI impact on impaired securities where impairment in value is 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 six months ended March 31, 2019 and 2018, the Company did not record any credit losses on investment securities through earnings.

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U.S. Government and Agency Obligations - At March 31, 2019, there were eight securities in a gross unrealized loss position for less than 12 months while there were 14 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 any of these investments to be other-than-temporarily impaired at March 31, 2019.

Mortgage-Backed Securities – At March 31, 2019, there were 14 mortgage-backed securities in a gross unrealized loss position for less than 12 months, while there were 58 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 March 31, 2019.

Corporate Bonds – At March 31, 2019, there were seven securities in a gross unrealized loss position for less than 12 months, while there were twenty-one securities in a gross unrealized loss position for more than 12 months at such date. These securities are issued by publicly traded companies with an investment grade rating by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019.

State and political subdivisions – At March 31, 2019, there were seven securities in a gross unrealized loss for less than 12 months, while there were five securities in a gross unrealized loss position for more than 12 months at such date. These securities were issued by local municipalities/school districts located in the Commonwealth of Pennsylvania with an investment grade rating by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019.

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

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

	March 31, 2019
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	1,704	$	1,715	$	5,256	$	5,168
Due after five through ten years		23,736		23,712		7,511		7,434
Due after ten years		26,584		25,282		128,921		127,847
Total	$	52,024	$	50,709	$	141,688	$	140,449

During both the three and six month periods ended March 31, 2019, the Company sold three mortgage-back securities with an aggregate amortized cost of $12.8 million for a recognized aggregate gain of $117,000 (pre-tax). During the both three and six month periods ended March 31, 2018, the Company did not sell any securities.

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5. LOANS RECEIVABLE

Loans receivable consist of the following:

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
One-to-four family residential	$	299,323		$	324,865
Multi-family residential		35,094			34,355
Commercial real estate		128,252			119,511
Construction and land development		168,465			160,228
Loans to financial institutions		6,000			6,000
Commercial business		20,934			17,792
Leases		1,139			1,687
Consumer		891			953
Total loans		660,098			665,391
Undisbursed portion of loans-in-process		(70,462	)		(54,474	)
Deferred loan fees (net)		(2,854	)		(2,818	)
Allowance for loan losses		(5,227	)		(5,167	)
Net loans	$	581,555		$	602,932

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at March 31, 2019:

	One- to- four family residential		Multi- family residential		Commercial real estate		Construction and land development		Loans to financial institutions		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,314		385		1,342		1,370		68		235		13		20		480		5,227
Total ending allowance balance	$	1,314	$	385	$	1,342	$	1,370	$	68	$	235	$	13	$	20	$	480	$	5,227
Loans:
Individually evaluated for impairment	$	4,830	$	287	$	2,196	$	8,750	$	-	$	-	$	-	$	10			$	16,073
Collectively evaluated for impairment		294,493		34,807		126,056		159,715		6,000		20,934		1,139		881				644,025
Total loans	$	299,323	$	35,094	$	128,252	$	168,465	$	6,000	$	20,934	$	1,139	$	891			$	660,098

20

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, 2018:

	One- to- four family residential		Multi- family residential		Commercial real estate		Construction and land development		Loans to  financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
		(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,343		347		1,154		1,554		64		187		18		18		482		5,167
Total ending allowance balance	$	1,343	$	347	$	1,154	$	1,554	$	64	$	187	$	18	$	18	$	482	$	5,167
Loans:
Individually evaluated for impairment	$	5,081	$	298	$	1,919	$	8,750	$	-	$	-	$	-	$	-			$	16,048
Collectively evaluated for impairment		319,784		34,057		117,592		151,478		6,000		17,792		1,687		953				649,343
Total loans	$	324,865	$	34,355	$	119,511	$	160,228	$	6,000	$	17,792	$	1,687	$	953			$	665,391

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction loans, multi-family loans, commercial real estate loans, commercial business loans, loans to financial institutions, leases and 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 March 31, 2019, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

21

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,830	$	4,830	$	5,178
Multi-family residential		-		-		287		287		287
Commercial real estate		-		-		2,196		2,196		2,357
Construction and land development		-		-		8,750		8,750		11,131
Consumer		-		-		10		10		10
Total impaired loans	$	-	$	-	$	16,073	$	16,073	$	18,963

The following table presents impaired loans by class as of September 30, 2018, 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	$	-	$	-	$	5,081	$	5,081	$	5,432
Multi-family		-		-		298		298		298
Commercial real estate		-		-		1,919		1,919		2,057
Construction and land development		-		-		8,750		8,750		11,131
Total impaired loans	$	-	$	-	$	16,048	$	16,048	$	18,918

22

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

	Three Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,952	$	21	$	5
Multi-family residential		290		5		-
Commercial real estate		2,202		10		1
Construction and land development		8,752		-		-
Consumer		10		-		-
Total impaired loans	$	16,205	$	36	$	6

	Three Months Ended March 31, 2018
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	9,777	$	43	$	-
Multi-family residential		311		5		-
Commercial real estate		3,316		29		-
Construction and land development		8,744		-		-
Consumer		10		-		-
Total impaired loans	$	22,158	$	77	$	-

	Six Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,055	$	44	$	10
Multi-family residential		293		10		-
Commercial real estate		2,133		20		2
Construction and land development		8,752		-		-
Consumer		8		-		-
Total impaired loans	$	16,242	$	74	$	12

23

	Six Months Ended March 31, 2018
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	8,521	$	77	$	4
Multi-family residential		316		11		-
Commercial real estate		2,942		58		-
Construction and land development		8,879		-		-
Consumer		10		-		-
Total impaired loans	$	20,668	$	146	$	4

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

	March 31, 2019
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	291,751	$	2,742	$	4,830	$	299,323
Multi-family residential		34,481		326		287		35,094
Commercial real estate		121,958		4,098		2,196		128,252
Construction and land development		159,715		-		8,750		168,465
Loans to financial institutions		6,000		-		-		6,000
Commercial business		20,934		-		-		20,934
Total loans	$	634,839	$	7,166	$	16,063	$	658,068

24

	September 30, 2018
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	317,033	$	2,751	$	5,081	$	324,865
Multi-family residential		34,057		-		298		34,355
Commercial real estate		115,670		1,922		1,919		119,511
Construction and land development		151,478		-		8,750		160,228
Loans to financial institutions		6,000		-		-		6,000
Commercial business		17,792		-		-		17,792
Total loans	$	642,030	$	4,673	$	16,048	$	662,751

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

	March 31, 2019
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	296,034	$	3,289	$	299,323
Leases		1,139		-		1,139
Consumer		891		-		891
Total loans	$	298,064	$	3,289	$	301,353

	September 30, 2018
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	321,853	$	3,012	$	324,865
Leases		1,687		-		1,687
Consumer		953		-		953
Total loans	$	324,493	$	3,012	$	327,505

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 tables present the loan categories of the loan portfolio summarized by the aging categories of performing loans, delinquent loans and nonaccrual loans:

25

	March 31, 2019
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	295,160	$	993	$	3,170	$	4,163	$	299,323	$	3,289	$	-
Multi-family residential		34,934		160		-		160		35,094		-		-
Commercial real estate		126,777		-		1,475		1,475		128,252		1,475		-
Construction and land development		159,715		-		8,750		8,750		168,465		8,750		-
Financial institutions		6,000		-		-		-		6,000		-		-
Commercial business		20,934		-		-		-		20,934		-		-
Leases		1,139		-		-		-		1,139		-		-
Consumer		783		108		-		108		891		-		-
Total loans	$	645,442	$	1,261	$	13,395	$	14,656	$	660,098	$	13,514	$	-

	September 30, 2018
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	321,749	$	1,037	$	2,079	$	3,116	$	324,865	$	3,012	$	-
Multi-family residential		34,355		-		-		-		34,355		-		-
Commercial real estate		117,335		722		1,454		2,176		119,511		1,627		-
Construction and land development		151,478		-		8,750		8,750		160,228		8,750		-
Commercial business		17,792		-		-		-		17,792		-		-
Loans to financial institutions		6,000		-		-		-		6,000		-		-
Leases		1,687		-		-		-		1,687		-		-
Consumer		837		116		-		116		953		-		-
Total loans	$	651,233	$	1,875	$	12,283	$	14,158	$	665,391	$	13,389	$	-

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.

26

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 a single borrower 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 borrowers’ ability to make required payments as well as reducing the value of the collateral property. Such lending is additionally subject to the risk that if the estimate of construction cost proves to be inaccurate, the Company potentially will be compelled to advance additional funds 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 construction 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 six month periods ended March 31, 2019 and 2018:

	Three Months Ended March 31, 2019
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2018	$	1,427		$	372	$	1,147	$	1,445		$	67	$	193	$	16		$	13	$	487		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(173	)		13		195		(75	)		1		42		(3	)		7		(7	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

	Six Months Ended March  31, 2019
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial  business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at September 30, 2018	$	1,343		$	347	$	1,154	$	1,554		$	64	$	187	$	18		$	18	$	482		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(89	)		38		188		(184	)		4		48		(5	)		2		(2	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

27

	Three Months Ended March 31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2017	$	1,270	$	158	$	1,064	$	1,621		$	-	$	26	$	20	$	24	$	493		$	4,676
Charge-offs		-		-		-		(12	)		-		-		-		-		-			(12	)
Recoveries		27		-		-		-			-		-		-		-		-			27
Provision		11		47		19		(144	)		62		80		9		73		(7	)		150
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083	$	1,465		$	62	$	106	$	29	$	97	$	486		$	4,841

	Six Months Ended March  31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate			Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2017	$	1,241	$	205	$	1,201		$	1,358		$	-	$	4	$	23	$	24	$	410	$	4,466
Charge-offs		-		-		-			(12	)		-		-		-		-		-		(12	)
Recoveries		27		-		-			-			-		-		-		-		-		27
Provision		40		-		(118	)		119			62		102		6		73		76		360
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083		$	1,465		$	62	$	106	$	29	$	97	$	486	$	4,841

The Company recorded no provision for loan losses for the three and six months period ended March 31, 2019, respectively, compared to $150,000 and $360,000 for the comparable three and six months periods in fiscal 2018. During both the quarter and six months ended March 31, 2019, the Company recorded no charge offs and recoveries of $60,000. During both the quarter and six months ended March 31, 2018, the Company recorded charge offs of $12,000 and recoveries of $27,000.

At March 31, 2019, the Company had nine loans aggregating $6.0 million that were classified as troubled debt restructurings (“TDRs”). Five of the nine loans aggregating $644,000 were performing in accordance with their restructured terms as of March 31, 2019 and accruing interest, with four of the TDRs on non-accrual status. Three of the TDRs which are classified as non-accrual totaling $4.9 million are a part of a troubled lending relationship totaling $10.6 million (after taking into account the previously disclosed $1.9 million write-down recognized during the quarter ending March 31, 2017 related to this borrowing relationship). The remaining TDR is also on non-accrual and consists of a $445,000 loan secured by various commercial and residential properties.

The Company did not restructure any loans during the three and six months ended March 31, 2019, or during the three and six months ending March 31, 2018.

No TDRs defaulted during the six-month period ending March 31, 2019 or 2018.

28

6. DEPOSITS

Deposits consist of the following major classifications:

	March 31,					September 30,
	2019					2018
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	67,346		8.2	%	$	66,120		8.4	%
Interest-bearing checking accounts		64,156		7.7			49,209		6.3
Non interest-bearing checking accounts		12,350		1.5			13,620		1.7
Passbook, club and statement savings		87,383		10.6			91,489		11.7
Certificates maturing in six months or less		352,331		42.7			301,184		38.4
Certificates maturing in more than six months		241,933		29.3			262,636		33.5
Total	$	825,499		100.0	%	$	784,258		100.0	%

Certificates of $250,000 and over totaled $29.7 million as of March 31, 2019 and $81.9 million as of September 30, 2018.

7. ADVANCES FROM FEDERAL HOME LOAN BANK – SHORT TERM

As of March 31, 2019 and September 30, 2018 outstanding balances and related information of short-term borrowings from the FHLB are summarized as follows:

						March 31,		September 30,
						2019		2018
Type	Maturity Date	Coupon			Call Date	Amount		Amount
						(Dollars in Thousands)
Fixed Rate - Repo Plus	12-Oct-18		2.31	%	Not Applicable	$	-	$	10,000
Weighted average rate			2.31	%
Fixed Rate - Repo Plus	1-Apr-19		2.70	%	Not Applicable	$	500	$	-
Fixed Rate - Repo Plus	15-Apr-19		2.71	%	Not Applicable		10,000		-
Fixed Rate - Repo Plus	17-Apr-19		2.70	%	Not Applicable		15,000		-
Weighted average rate			2.70	%		$	25,500	$	10,000

As of March 31, 2019, short-term advances include a $10.0 million and $15.0 million 30 day FHLB advances associated with interest rate swap contracts. The additional $500,000 at March 31, 2019 consisted of an overnight borrowing to provide additional short-term liquidity. As of September 30, 2018, there was a $10.0 million 30 day FHLB advance associated with an interest rate swap contract

29

8. ADVANCES FROM FEDERAL HOME LOAN BANK – LONG TERM

Pursuant to collateral agreements with the FHLB of Pittsburgh, advances are secured by a blanket collateral of loans held by the Company and qualifying fixed-income securities and FHLB stock. The long-term advances outstanding as of March 31, 2019 and September 30, 2018 are as follows:

Lomg-term FHLB advances:
	Maturity range		Weighted average			Stated interest rate range						March 31,		September 30,
Description	from	to	interest rate			from			to			2019		2018
												(Dollars in Thousands)
Fixed Rate - Amortizing	1-Oct-18	30-Sep-20		1.53	%		1.53	%		1.53	%	$	940	$	1,639
Fixed Rate - Amortizing	1-Oct-20	30-Sep-21		2.69	%		1.94	%		2.83	%		18,851		23,288
Fixed Rate - Amortizing	1-Oct-21	30-Sep-22		2.80	%		1.99	%		3.05	%		10,299		11,848
Fixed Rate - Amortizing	1-Oct-22	30-Sep-23		2.88	%		1.94	%		3.11	%		7,746		8,550
Total				2.73	%							$	37,836	$	45,325
Fixed Rate - Advances	1-Oct-18	30-Sep-19		2.66	%		1.40	%		2.66	%	$	3,011	$	18,528
Fixed Rate - Advances	1-Oct-19	30-Sep-20		2.62	%		1.38	%		3.06	%		12,365		12,413
Fixed Rate - Advances	1-Oct-20	30-Sep-21		2.45	%		1.42	%		2.92	%		3,027		3,037
Fixed Rate - Advances	1-Oct-21	30-Sep-22		2.28	%		1.94	%		3.23	%		23,358		23,380
Fixed Rate - Advances	1-Oct-22	30-Sep-23		2.72	%		2.18	%		3.22	%		65,999		37,000
Fixed Rate - Advances	1-Oct-23	30-Sep-24		2.99	%		2.98	%		3.20	%		53,998		5,000
Total				2.73	%							$	161,758	$	99,358
				2.73	%					Total		$	199,594	$	144,683

9. DERIVATIVES

The Company has contracted with a third party to participate in interest rate swap contracts. One of the swaps is a cash flow hedge associated with FHLB advances at both March 31, 2019 and September 30, 2018, while there are seven additional cash flow hedges tied to wholesale funding at March 31, 2019. These interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments. During the quarter ended March 31, 2019, $3,000 of expense was recognized as ineffectiveness through earnings, while $6,000 of income was recognized as ineffectiveness through earnings during the comparable period in fiscal 2018. During the six months ended March 31, 2019, $5,000 of expense was recognized as ineffectiveness through earnings, while $48,000 of income was recognized as ineffectiveness through earnings during the comparable period in 2018. There were nine interest rate swaps designated as fair value hedges involving the receipt of variable-rate payments from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements that were applicable to two loans and seven investment securities as of both March 31, 2019 and September 30, 2018. The fair value of the swaps is recorded in the other liabilities section of the statement of financial condition.

Below is a summary of the interest rate swap agreements and their terms as of March 31, 2019.

30

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Loss
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	(311	)
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(87	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(147	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(275	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(69	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(252	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(165	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(160	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Interest rate swap contract	90 Day wholesale funding		20,000		2.78	%	3 Mth Libor	11-Jan-24		(492	)
Interest rate swap contract	90 Day wholesale funding		15,000		2.75	%	3 Mth Libor	18-Jan-24		(345	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.66	%	3 Mth Libor	20-Feb-24		(491	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.56	%	3 Mth Libor	28-Feb-24		(377	)
Interest rate swap contract	30 Day wholesale funding		15,000		2.51	%	1 Mth Libor	15-Feb-24		(257	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.59	%	3 Mth Libor	13-Mar-24		(409	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.51	%	3 Mth Libor	27-Mar-24		(314	)
Total									$	(4,151	)

Below is a summary of the interest rate swap agreements and their terms as of September 30, 2018.

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Gain (Loss)
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	35
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(19	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(31	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(57	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(14	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(52	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(32	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(32	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Total									$	(202	)

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

31

10. INCOME TAXES

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

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
Deferred tax assets:
Allowance for loan losses	$	1,428		$	1,445
Nonaccrual interest		619			312
Accrued vacation		4			29
Capital loss carryforward		356			356
Split dollar life insurance		8			10
Post-retirement benefits		77			85
Unrealized losses on available for sale securities		576			2,212
Unrealized losses on interest rate swaps		629			-
Deferred compensation		811			838
Goodwill		75			80
Other		50			55
Employee benefit plans		330			239
Total deferred tax assets		4,963			5,661
Valuation allowance		(356	)		(356	)
Total deferred tax assets, net of valuation allowance		4,607			5,305
Deferred tax liabilities:
Property		127			179
Unrealized gains on interest rate swaps		-			44
Purchase accounting adjustments		102			59
Deferred loan fees		266			368
Total deferred tax liabilities		495			650
Net deferred tax assets	$	4,112		$	4,655

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 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 $356,000 at both March 31, 2019, and September 30, 2018, respectively.

For the six-month period ended March 31, 2019, the Company recorded income tax expense of $809,000 compared to income tax expense of $2.9 million, for the period ended March 31, 2018, which included a $1.8 million one-time non-cash charge related to a re-evaluation of the Company’s deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act in December 2017. The re-evaluation reflected the effect of the significant decline in the federal corporate income tax rate applicable to the Company. During fiscal 2018, commencing with the quarter ended December 31, 2017, the Company’s federal statutory income tax rate was 24.25% as compared to companies which are calendar year tax reporting companies whose statutory rate decreased to 21% starting January 1, 2018. Effective October 1, 2018, the Company’s federal statutory tax rate was reduced to 21%.

32

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. During fiscal 2017, the Internal Revenue Service conducted an audit of the Company’s tax return for the year ended September 30, 2014, and no adverse findings were reported. 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.

11. STOCK COMPENSATION PLANS

The Company maintains the 2008 Recognition and Retention Plan and Trust (the “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 (on a converted basis) of the Company’s common stock in the open market for an aggregate 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. 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. 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. In March 2018, the Company granted 8,209 shares under the 2008 RRP and 18,291 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 six months ended March 31, 2019, an aggregate of $150,000 and $307,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. During the three and six months ended March 31, 2018, $99,000 and $250,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. At March 31, 2019, approximately $1.1 million in additional compensation expense for unvested shares awarded related to the 2008 RRP and 2014 SIP remained unrecognized.

A summary of the Company’s non-vested stock award activity for the six months ended March 31, 2019 and 2018 is presented in the following tables:

	Six Months Ended March 31, 2019
	Number of Shares (1)			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2018		116,916		$	14.36
Granted		-			-
Forfeited		-			-
Vested		(44,024	)		13.38
Non-vested stock awards at the March 31, 2019		72,892		$	14.95

33

	Six Months Ended March 31, 2018
	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2017		142,594		$	12.79
Granted		26,500			18.46
Forfeited		4,636			11.91
Vested		(44,647	)		12.06
Non-vested stock awards at the March 31, 2018		129,083		$	14.17

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 March 31, 2019, all of the options had been awarded under the 2008 Option Plan. The 2014 SIP reserved up to 714,145 shares for issuance pursuant to options. Options to purchase 605,000 shares were awarded during February 2015. During August 2016, the Company granted 18,867 shares under the 2008 Option Plan and 8,633 shares under the 2014 SIP. In March 2017, the Company granted 22,828 shares under the 2014 SIP. In May 2017, the Company granted 24,717 shares under the 2014 SIP and 283 shares under the 2008 Option Plan. In March 2018, the Company granted 159,265 shares under the 2014 SIP and 18,235 shares under the 2008 Option Plan.

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP as of March 31, 2019 and 2018 are presented below:

	Six Months Ended  March 31, 2019
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2018		869,026		$	13.41
Granted		-			-
Exercised		(75,694	)		11.77
Forfeited		(6,000	)		12.23
Outstanding at  March 31, 2019		787,332		$	13.58
Exercisable at March 31, 2019		512,788		$	12.13

34

	Six Months Ended  March 31, 2018
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2017		922,564		$	12.04
Granted		177,500			18.46
Exercised		(37,171	)		11.50
Forfeited		(12,234	)		11.90
Outstanding at March 31, 2018		1,050,659		$	13.15
Exercisable at March 31, 2018		595,385		$	11.53

The weighted average remaining contractual term was approximately 7.0 years for options outstanding as of March 31, 2019.

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 options granted during fiscal 2014, $4.58 for options granted during fiscal 2015, $2.13 for options granted during fiscal 2016, $3.18 for options granted during fiscal 2017 and $3.63 for options granted in fiscal 2018. The fair value for grants made in fiscal 2017 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise price range from $17.43 to $18.39, a term of seven years, a volatility of 14.37%, an interest rate of 2.22% and a yield of 0.69%. The fair value for grants made in fiscal 2018 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value based on the grant date market value price of $18.46, a term of seven years, a volatility rate of 15.9%, an interest rate of 2.82% and a yield rate of 1.08%.

During the three and six months ended March 31, 2019, $127,000 and $277,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. During the three and six months ended March 31, 2018, $102,000 and $239,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP.

At March 31, 2019, there was approximately $1.1 million in additional compensation expense to be recognized for awarded options which remained outstanding and unvested at such date. The weighted average period over which this expense will be recognized is approximately 2.2 years.

12. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2019, the Company had $58.2 million in outstanding commitments to originate loans with market interest rates ranging from 6.00% to 6.75%. At September 30, 2018, the Company had $40.4 million in outstanding commitments to originate loans with market interest rates ranging from 4.25% to 6.25%. The aggregate undisbursed portion of loans-in-process amounted to $70.5 million at March 31, 2019 and $54.5 million at September 30, 2018.

The Company also had commitments under unused lines of credit of $69.7 million as of March 31, 2019 and $51.9 million as of September 30, 2018 and letters of credit outstanding of $1.6 million as of March 31, 2019 and $1.6 million as of September 30, 2018.

Among the Company’s contingent liabilities are exposures to limited recourse arrangements with respect to the Company’s sales of whole loans and participation interests. At March 31, 2019, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $1.5 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.

35

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.

13. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2019 and September 30, 2018, 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 and liabilities as of March 31, 2019 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	$	-	$	24,822	$	-	$	24,822
State and political subdivisions		-		22,793		-		22,793
Mortgage-backed securities - U.S. Government agencies		-		305,717		-		305,717
Corporate bonds		-		92,834		-		92,834
Equity securities		72		-		-		72
Total	$	72	$	446,166	$	-	$	446,238
Liabilities
Interest rate swap contracts	$	-	$	4,141	$	-	$	4,141
Total	$	-	$	4,141	$	-	$	4,141

36

Those assets as of September 30, 2018 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	$	-	$	24,171	$	-	$	24,171
State and political subdivisions		-		21,536		-		21,536
Mortgage-backed securities - U.S. Government agencies		-		187,360		-		187,360
Corporate bonds		-		73,083		-		73,083
FHLMC preferred stock		37		-		-		37
Interest rate swap contracts		-		225		-		225
Total	$	37	$	306,375	$	-	$	306,412

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 comparables 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 of approximately $16.1 million as of March 31, 2019.

Other 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.

37

 Summary of Non-Recurring Fair Value Measurements

	At March 31, 2019
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,073	$	16,073
Other real estate owned		-		-		423		423
Total	$	-	$	-	$	16,496	$	16,496

	At September 30, 2018
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,048	$	16,048
Other real estate owned		-		-		1,026		1,026
Total	$	-	$	-	$	17,074	$	17,074

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

	At March 31, 2019
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,073	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	423	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2018
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,048	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	1,026	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	18% 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.

38

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

					Fair Value Measurements at
					March 31, 2019
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	50,593	$	50,593	$	50,593	$	-	$	-
Certificates of deposit		2,351		2,351		2,351		-		-
Investment and mortgage-backed securities available for sale		446,166		446,166		-		446,166		-
Equity securities		72		72		72
Investment and mortgage-backed securities held to maturity		57,361		56,159		-		56,159		-
Loans receivable, net		581,555		578,091		-		-		578,091
Accrued interest receivable		4,314		4,314		4,314		-		-
Restricted bank stock		10,383		10,383		10,383		-		-
Bank owned life insurance		28,996		28,996		28,996		-		-
Liabilities:
Checking accounts		76,506		76,506		76,506		-		-
Money market deposit accounts		67,346		67,346		67,346		-		-
Passbook, club and statement savings accounts		87,383		87,383		87,383		-		-
Certificates of deposit		594,264		605,324		-		-		605,324
Advances from FHLB short-term		25,500		25,500		25,500				-
Advances from FHLB long-term		199,594		201,289		-		-		201,289
Accrued interest payable		2,814		2,814		2,814		-		-
Advances from borrowers for taxes and insurance		2,260		2,260		2,260		-		-
Interest rate swap contracts		4141		4141		-		4141		-

39

					Fair Value Measurements at
					September 30, 2018
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	48,171	$	48,171	$	48,171	$	-	$	-
Certificates of deposit		1,604		1,604		1,604		-		-
Investment and mortgage-backed securities available for sale		306,187		306,187		37		306,150		-
Investment and mortgage-backed securities held to maturity		59,852		55,927		-		55,927		-
Loans receivable, net		602,932		598,596		-		-		598,596
Accrued interest receivable		3,825		3,825		3,825		-		-
Restricted bank stock		7,585		7,585		7,585		-		-
Interest rate swap contracts		225		225		-		225		-
Bank owned life insurance		28,691		28,691		28,691		-		-
Liabilities:
Checking accounts		62,886		62,886		62,886		-		-
Money market deposit accounts		60,686		60,686		60,686		-		-
Passbook, club and statement savings accounts		96,866		96,866		96,866		-		-
Certificates of deposit		563,820		569,375		-		-		569,375
Advances from FHLB -short-term		10,000		10,000		10,000		-		-
Advances from FHLB -long-term		144,683		141,116		-		-		141,116
Accrued interest payable		3,232		3,232		3,232		-		-
Advances from borrowers for taxes and insurance		2,083		2,083		2,083		-		-

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—On a prospective basis, the Company implemented changes to the measurement of the fair value of financial instruments using an exit price notion for disclosure purposes in the financial statements.  The September 30, 2018, fair value of each class of financial instruments disclosure did not utilize the exit price notion when measuring fair value and, therefore, would not be comparable to the March 31, 2019 disclosure.  The Company estimated the fair value based on guidance from ASC 820-10, Fair Value Measurements, which defines fair value as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  There is no active observable market for sale information on community bank loans and, thus, Level 3 fair value procedures were utilized, primarily in the use of present value techniques incorporating assumptions that market participants would use in estimating fair values.

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

40

Restricted Bank (FHLB & ACBB) Stock—Although FHLB and ACBB (Atlantic Community Bankers Bank) stock is an equity interest in the respective banks, 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 and is classified within Level 2 of the fair value hierarchy.

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 estimated using a discounted cash flow calculation that applies 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 estimated based on market rates currently offered for advances with similar remaining maturities.

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 Company’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 Company or the borrower, they only have value to the Company and the borrower. The estimated fair value approximates the recorded deferred fee amounts, which are not significant.

14. 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 October 1,		Additions/					Balance March 31,		Amortization
	2018		Adjustments		Amortization			2019		Period
Goodwill	$	6,102	$	-	$	-		$	6,102
Core deposit intangible		571		-		(63	)		508	10 years
	$	6,673	$	-	$	(63	)	$	6,610

As of March 31, 2019, the current fiscal year and the future fiscal periods amortization expense for the core deposit intangible is:

	(In Thousands)
2019	$	60
2020		108
2021		93
2022		78
2023		64
Thereafter		105
Total	$	508

41

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, 2018 (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”) (formerly known as Prudential Savings Bank) as a result of the second-step conversion of Prudential Mutual Holding Company 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 expenses. 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 located in Philadelphia, Pennsylvania, with nine additional full-service banking offices located in Philadelphia, Delaware and Montgomery 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 2005, the Bank formed PSB Delaware, Inc., a Delaware corporation, as a subsidiary of the Bank. In 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.

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 Bank’s lending policy;

· Experience, ability and depth of management and staff;

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

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

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

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

In determining the allowance for loan losses, management has established a general pooled allowance. Values assigned to the qualitative factors and those developed from historic loss experience provide a dynamic basis for the calculation of reserve factors for both pass-rated loans (the general pooled allowance) and those for criticized and classified loans. The amount of the specific allowance is determined through a loan-by-loan analysis of certain large dollar commercial real estate loans, construction and land development loans and multi-family loans. 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 March 31, 2019 or September 30, 2018. 

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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 Company determines whether the unrealized losses are temporary or are considered other than temporary.  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 other real estate owned 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.

Derivatives. The Company uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the payment of either fixed or variable-rate amounts in exchange for the receipt of variable or fixed-rate amounts from a counterparty, respectively. The Company uses interest rate swaps to manage its exposure to changes in fair value. Interest rate swaps designated as fair value hedges involve the receipt of variable-rate payments from a counterparty in exchange for the Company making fixed rate payments over the life of the agreements without the exchange of the underlying notional amount.

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. 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: 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, including the effects of the Tax Cuts and Jobs Act (“Tax Reform Act”); 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; geographic concentration of the Company’s business; fluctuations in real estate values; the adequacy of loan loss reserves; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; 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, readers are encouraged to review the Company’s filings with the SEC, including the “Risk Factors” section in the Company’s most recent Form 10-K, as supplemented by its quarterly or other reports subsequently filed with the SEC.

Market Overview. The economy continued to improve during 2019 and 2018.

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. 

The Company continues to maintain capital well in excess of regulatory requirements.

The following discussion provides further details on the financial condition of the Company at March 31, 2019 and September 30, 2018, and the results of operations for the three and six months ended March 31, 2019 and 2018.

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 2019 AND SEPTEMBER 30, 2018

At March 31, 2019, the Company had total assets of $1.2 billion, as compared to $1.1 billion at September 30, 2018, an increase of 11.2%. At March 31, 2019, the investment portfolio increased by $137.6 million to $503.6 million as compared to $366.1 million at September 30, 2018 primarily as a result of the purchase of U.S. government agency mortgage-backed securities. Net loans receivable decreased $21.3 million to $581.6 million at March 31, 2019 from $602.9 million at September 30, 2018.

Total liabilities increased by $115.7 million to $1.1 billion at March 31, 2019 from $952.8 million at September 30, 2018. Total deposits increased $41.2 million, consisting primarily of certificates of deposit which were used to fund asset growth as well as to meet on going liquidity needs. At March 31, 2019, the Company had FHLB advances outstanding of $225.1 million as compared to $154.7 million at September 30, 2018. The increase in the level of borrowings was primarily due to the match funding of purchases of investment securities in order to lock in the yield with minimal interest rate risk as part of the Company’s asset/liability management. All of the borrowings had maturities of less than six years.

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Total stockholders’ equity increased by $5.5 million to $133.9 million at March 31, 2019 from $128.4 million at September 30, 2018. The increase was primarily due to net income of $4.3 million combined with a $3.6 million increase in the appreciation in the fair market value of available for sale securities due to increased market rates of interest. These increases were partially offset by net treasury stock repurchases, net of stock plan activity, of $1.2 million and dividend payments of $893,000.

COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2019 AND 2018

Net income. The Company reported net income of $2.3 million, or $0.27 per basic share and $0.26 per diluted share, for the quarter ended March 31, 2019 as compared to income of $2.2 million, or $0.24 per basic and diluted share, respectively, for the same quarter in fiscal 2018. For the six months ended March 31, 2019, the Company recognized net income of $4.3 million, or $0.49 per basic and $0.48 per diluted share as compared to net income of $2.2 million, or $0.25 per basic and $0.24 per diluted share, for the same period in fiscal 2018.

Net interest income. For the three months ended March 31, 2019, net interest income increased to $6.3 million as compared to $6.2 million for the same period in fiscal 2018. The increase reflected a $2.8 million, or 33.3%, increase in interest income, substantially offset by an increase of $2.7 million, or 126.2%, in interest paid on deposits and borrowings. The increase in net interest income between the periods was primarily due to the increase in the weighted average balance of earning assets combined with the shift in the Bank’s emphasis to increase its investment in commercial real estate and construction loans, which generally produce higher yields than those obtained on residential loans. The average balance of interest-earning assets increased by $241.2 million, or 27.0%, to $1.1 billion from the comparable period in 2018. The yield on interest-earning assets increased by 19 basis points, to 3.98% for the quarter ended March 31, 2019 from the comparable period in 2018. However, during the same period, the weighted average cost of borrowings and deposits increased to 1.94% from 1.08% for the comparable period in 2018 due to increases in market rates of interest. For the six months ended March 31, 2019, net interest income was $12.3 million as compared to $12.4 million for the same period in fiscal 2018. The increase in interest income of $4.7 million, or 29.0%, was offset by an increase of $4.8 million, or 118.5%, in interest paid on deposits and borrowings. The increase in interest income was primarily due to the increase in the weighted average balances of earning assets, the shift in emphasis to increased investment in commercial real estate and construction loans and a rising interest rate environment. The average balance of interest-earning assets increased by $206.4 million, or 23.3%, from the comparable period in 2018. The yield on interest-earning assets increased by 17 basis points, to 3.89% for the six months ended March 31, 2019 from the comparable period in 2018. The weighted average cost of borrowings and deposits increased to 1.83% during the six months ended March 31, 2019 from 1.03% during the comparable period in 2018 primarily due to increases in market rates of interest, reflecting in part the competitive market for deposits in the areas in which the Company operates.

For the three and six months ended March 31, 2019, the net interest margin was 2.26% and 2.27%, respectively, compared to 2.83% and 2.81% for the same periods in fiscal 2018, respectively. The margin compression experienced in the 2019 periods reflected in large part the higher funding costs resulting from the increases in the federal funds rates combined with a competitive market for funding deposits. Asset yields have not risen as quickly as liability costs in response to the rising interest rate environment exacerbated by the competitive market for funding sources, especially locally-sourced deposits.

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 March 31,
	2019								2018
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	196,030	$	1,681			3.48	%	$	149,235	$	1,159			3.15	%
Mortgage-backed securities		309,638		2,553			3.34			139,264		851			2.48
Loans receivable(2)		587,857		6,722			4.64			583,319		6,261			4.35
Other interest-earning assets		41,244		178			1.75			21,797		84			1.56
Total interest-earning assets		1,134,769		11,134			3.98			893,615		8,355			3.79
Cash and non interest-bearing balances		2,339								2,460
Other non interest-earning assets		22,547								50,774
Total assets	$	1,159,655							$	946,849
Interest-bearing liabilities:
Savings accounts	$	86,826		8			0.04		$	112,490		17			0.06
Money market deposit and NOW accounts		119,831		209			0.71			121,529		52			0.17
Certificates of deposit		601,503		3,323			2.24			433,877		1,501			1.40
Total deposits		808,160		3,540			1.78			667,896		1,570			0.95
Advances from Federal Home Loan Bank		195,007		1,270			2.64			131,187		556			1.72
Advances from borrowers for taxes and insurance		1,958		1			0.21			2,667		1			0.15
Total interest-bearing liabilities		1,005,125		4,811			1.94			801,750		2,127			1.08
Non interest-bearing liabilities:
Non interest-bearing demand accounts		14,962								11,384
Other liabilities		7,333								1,949
Total liabilities		1,027,420								815,083
Stockholders' equity		132,235								131,766
Total liabilities and stockholders' equity	$	1,159,655							$	946,849
Net interest-earning assets	$	129,644							$	91,865
Net interest income; interest rate spread			$	6,323			2.04	%			$	6,228			2.62	%
Net interest margin(3)							2.26	%							2.83	%
Average interest-earning assets to average interest-bearing liabilities				112.90	%							111.46	%

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	Six Months
	Ended March 31,
	2019								2018
	Average					Average			Average					Average
	Balance		Interest			Yield/Rate (1)			Balance		Interest			Yield/Rate (1)
	(Dollars in Thousands)
Interest-earning assets:
Investment securities	$	189,535	$	3,240			3.43	%	$	143,353	$	2,145			3.00	%
Mortgage-backed securities		267,232		4,308			3.23			136,619		1,693			2.49
Loans receivable(2)		586,559		13,184			4.51			579,789		12,368			4.28
Other interest-earning assets		46,126		404			1.76			23,253		185			1.60
Total interest-earning assets		1,089,452		21,136			3.89			883,014		16,391			3.72
Cash and non interest-bearing balances		2,246								2,360
Other non interest-earning assets		39,078								53,260
Total assets	$	1,130,776							$	938,634
Interest-bearing liabilities:
Savings accounts	$	88,551		105			0.24		$	107,414		36			0.07
Money market deposit and NOW accounts		115,768		334			0.58			124,287		101			0.16
Certificates of deposit		583,795		6,139			2.11			421,450		2,843			1.35
Total deposits		788,114		6,578			1.67			653,151		2,980			0.92
Advances from Federal Home Loan Bank		175,100		2,217			2.54			129,474		1,044			1.62
Advances from borrowers for taxes and insurance		2,272		2			0.18			2,470		3			0.24
Total interest-bearing liabilities		965,486		8,797			1.83			785,095		4,027			1.03
Non interest-bearing liabilities:
Non interest-bearing demand accounts		15,644								10,976
Other liabilities		18,917								9,113
Total liabilities		1,000,047								805,184
Stockholders' equity		130,729								133,450
Total liabilities and stockholders' equity	$	1,130,776							$	938,634
Net interest-earning assets	$	123,966							$	97,919
Net interest income; interest rate spread			$	12,339			2.06	%			$	12,364			2.69	%
Net interest margin(3)							2.27	%							2.81	%
Average interest-earning assets to average interest-bearing liabilities				112.84	%							112.47	%

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

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

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

Provision for loan losses. The Company recorded no provision for loan losses for the three and six months ended March 31, 2019, respectively, compared to a provision for loan losses of $150,000 and $360,000, respectively, for the same periods in fiscal 2018

The allowance for loan losses totaled $5.2 million, or 0.9% of total loans and 38.7% of total non-performing loans (which included loans acquired from Polonia Bancorp as of January1, 2017 at their fair value) at March 31, 2019 as compared to $5.2 million, or 0.9% of total loans and 32.6% of total non-performing loans at September 30, 2018. The Company believes that the allowance for loan losses at March 31, 2019 was sufficient to cover all inherent and known losses associated with the loan portfolio at such date.

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

At March 31, 2019, the Company’s non-performing assets totaled $13.9 million or 1.2% of total assets as compared to $14.4 million or 1.3% of total assets at September 30, 2018. Non-performing assets at March 31, 2019 included five construction loans aggregating $8.8 million, 21 one-to-four family residential loans aggregating $3.3 million, and five commercial real estate loans aggregating $1.4 million. Non-performing assets at March 31, 2019 also included other real estate owned consisting of one single-family residential property with an aggregate carrying value of $423,000. At March 31, 2019, the Company had nine loans aggregating $6.0 million that were classified as troubled debt restructurings (“TDRs”). Five of such loans aggregating $639,000 were performing as of March 31, 2019 in accordance with their restructured terms and were accruing interest. One TDR is on non-accrual and consists of a $441,000 loan secured by a single-family property. The three remaining TDRs totaling $4.9 million are also classified as non-accrual and are a part of a lending relationship totaling $10.6 million (after taking into account the previously disclosed $1.9 million write-down recognized during the quarter ending March 31, 2017 related to this borrowing relationship). The primary project of the borrower (the development of a 169-unit townhouse project in Bristol Borough, Pennsylvania) is the subject of litigation between the Bank and the borrower. As previously disclosed, subsequent to the commencement of the litigation, the borrower filed for bankruptcy under Chapter 11 (Reorganization) of the federal bankruptcy code in June 2017. The Bank has moved the underlying litigation noted above with the borrower and the Bank from state court to the federal bankruptcy court in which the bankruptcy proceeding is being heard. The state litigation is stayed pending the resolution of the bankruptcy proceedings.

At March 31, 2019, the Company had $1.3 million of loans delinquent 30-89 days as to interest and/or principal. Such amount consisted of six one-to-four family residential loans totaling $993,000, one multi-family property in the amount of $160,000 and four consumer loans totaling $108,000.

At March 31, 2019, we also had a total of twenty-four loans aggregating $7.2 million that had been designated “special mention”. These loans consist of seventeen one-to-four family residential loans totaling $2.7 million, six commercial real estate loans totaling $4.1 million and one multi-family totaling $326,000. At September 30, 2018, we had a total of 26 loans aggregating $4.7 million designated as “special mention”.

The following table shows the amounts of non-performing assets (defined as non-accruing loans, accruing loans 90 days or more past due as to principal and/or interest and real estate owned) as of March 31, 2019 and September 30, 2018. At neither date did the Company have any accruing loans 90 days or more past due that were accruing.

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
Non-accruing loans:
One-to-four family residential	$	3,289		$	3,012
Commercial real estate		1,475			1,627
Construction and land development		8,750			8,750
Total non-accruing loans		13,514			13,389
Other real estate owned, net:  (1)		423			1,026
Total non-performing assets	$	13,937		$	14,415
Total non-performing loans as a percentage of loans, net		2.32	%		2.65	%
Total non-performing loans as a percentage of total assets		1.12	%		1.24	%
Total non-performing assets as a percentage of total assets		1.16	%		1.33	%

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

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Non-interest income. Non-interest income amounted to $542,000 and $922,000 for the three and six month periods ended March 31, 2019, respectively, compared to $567,000 and $982,000, respectively, for the comparable periods in fiscal 2018. The decrease experienced in both of the 2019 periods was primarily attributable to the decrease in derivative-related income in 2019 periods from the 2018 periods. The effect of this decrease was partially offset by investment gains during the quarter and six months ended March 31, 2019.

Non-interest expense. For the three and six month periods ended March 31, 2019, non-interest expense increased $277,000 or 7.2% and $226,000 or 2.9%, respectively, compared to the same periods in the prior fiscal year. Non-interest expense increased in the fiscal 2019 periods due in part to the hiring of additional personnel in our lending operations, normal salary increases as well as increases in benefit plan expenses. Partially offsetting these increases were decreases in professional fees and occupancy expense as the Company maintained its focus on continued implementation of operating efficiencies.

Income tax expense. For the three month period ended March 31, 2019, the Company recorded a tax expense of $380,000, compared to a tax expense of $619,000 for the same period in fiscal 2018. For the six month period ended March 31, 2019, the Company recorded an income tax expense of $809,000 as compared to a tax expense of $2.9 million for the same period in fiscal 2018. The reduction in the three month period ended March 31, 2019 reflected a benefit in 2019 associated with Company stock benefit plans combined with the decrease in the federal statutory income tax rate. The $2.9 million tax expense for the six months ended March 31, 2018 includes a one-time charge of $1.8 million related to a re-evaluation of the Company’s deferred tax assets due to the tax legislation enacted in December 2017 that reduced the statutory federal corporate income tax rate from 35% to 21%.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. Our primary sources of funds are deposits, scheduled principal and interest payments on loans, loan prepayments and the maturity of loans, mortgage-backed securities and other investments, and other funds provided from operations. While scheduled payments from the amortization of loans and mortgage-backed securities and maturing investment securities are relatively predictable sources of funds, deposit flows and loan and securities prepayments can be greatly influenced by market rates of interest, economic conditions and competition. We also maintain excess funds in short-term, interest-earning assets that provide additional liquidity. At March 31, 2019, our cash and cash equivalents amounted to $50.6 million. In addition, our available-for-sale investment securities amounted to an aggregate of $446.2 million at such date.

We use our liquidity to fund existing and future loan commitments, to invest in other interest-earning assets, to fund maturing certificates of deposit and demand deposit withdrawals, and to meet operating expenses. At March 31, 2019, the Company had $58.2 million in outstanding commitments to originate loans, not including loans in process. The Company also had undisbursed loans in process and commitments under unused lines of credit totaling $140.2 million and letters of credit outstanding of $1.6 million at March 31, 2019. Certificates of deposit as of March 31, 2019 that are maturing in one year or less totaled $457.0 million. Based upon historical experience, we anticipate that a significant portion of the maturing certificates of deposit will be redeposited with us.

In addition to cash flows from loan and securities payments and prepayments as well as from sales of available for sale securities, we have significant borrowing capacity available to fund liquidity needs should the need arise. Our borrowings consist solely of advances from the Federal Home Loan Bank of Pittsburgh (“FHLB”), of which we are a member. Under terms of the collateral agreement with the FHLB, we pledge residential mortgage loans as well as our stock in the FHLB as collateral for such advances. At March 31, 2019, we had $225.1 million in outstanding FHLB advances and had the ability to obtain an additional $282.7 million in FHLB advances. Additional borrowing capacity with the FHLB could be obtained with the pledging of certain investment securities. The Bank has also obtained approval to borrow from the Federal Reserve Bank discount window.

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

50

The following table summarizes the Company’s and Bank’s regulatory capital ratios as of March 31, 2019 and September 30, 2018 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
March 31, 2019:
Tier 1 capital (to average assets)
The Company		11.35	%		N/A			N/A
The Bank		11.06	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		19.49	%		N/A			N/A
The Bank		18.98	%		4.5	%		6.5	%
Tier 1 capital (to risk-weighted assets)
The Company		19.49	%		N/A			N/A
The Bank		18.98	%		6.0	%		8.0	%
Total capital (to risk-weighted assets)
The Company		20.32	%		N/A			N/A
The Bank		19.82	%		8.0	%		10.0	%
September 30, 2018:
Tier 1 capital (to average assets)
Company		12.51	%		N/A			N/A
Bank		11.86	%		4.0	%		5.0	%
Tier 1 common (to risk-weighted assets)
The Company		19.74	%		N/A			N/A
The Bank		18.73	%		4.5	%		6.5	%
Tier 1 capital (to risk-weighted assets)
Company		19.74	%		N/A			N/A
Bank		18.73	%		6.0	%		8.0	%
Total capital (to risk-weighted assets)
Company		20.58	%		N/A			N/A
Bank		19.56	%		8.0	%		10.0	%

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.

51

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

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

In recent years, as a part of our asset/liability management strategy we primarily have reduced our investment in longer term fixed-rate callable agency bonds, increased our origination or purchase of hybrid adjustable-rate single-family residential mortgage loans, commercial real estate and construction loans and increased our portfolio of step-up callable agency bonds and agency issued collateralized mortgage-backed securities (“CMOs”) with short effective lives. In addition, we recently implemented interest rate swaps to reduce funding cost 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 a Company’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period. The interest rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive liabilities. A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive assets. During a period of rising interest rates, a negative gap would tend to affect adversely net interest income while a positive gap would tend to result in an increase in net interest income. Conversely, during a period of falling interest rates, a negative gap would tend to result in an increase in net interest income while a positive gap would tend to adversely affect net interest income.

The following table sets forth the amounts of our interest-earning assets and interest-bearing liabilities outstanding at March 31, 2019, which we expect, based upon certain assumptions, to reprice or mature in each of the future time periods shown (the “GAP Table”). Except as stated below, the amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at March 31, 2019, 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 6.3% to 33.6%. The annual prepayment rate for mortgage-backed securities is assumed to range from 0.7% to 28.3%. For savings accounts, checking accounts and money markets, the decay rates vary on an annual basis over a ten year period.

52

				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)	$	25,930		$	54,423		$	114,519		$	105,222		$	205,090		$	505,184
Loans receivable(3)		152,680			70,517			132,018			104,830			119,159			579,204
Other interest-earning assets(4)		48,338			-			1,604			747			-			50,689
Total interest-earning assets	$	226,948		$	124,940		$	248,141		$	210,799		$	324,249		$	1,135,077
Interest-bearing liabilities:
Savings accounts	$	2,944		$	8,477		$	14,287		$	13,462		$	48,213		$	87,383
Money market deposit and NOW accounts		4,047			12,144			20,129			16,312			78,489			131,121
Certificates of deposit		143,914			168,186			82,357			199,807			-			594,264
Advances from FHLB		4,364			19,538			37,667			148,525			15,000			225,094
Advances from borrowers for taxes and insurance		2,260			-			-			-			-			2,260
Total interest-bearing liabilities	$	157,529		$	208,345		$	154,440		$	378,106		$	141,702		$	1,040,122
Interest-earning assets less interest-bearing liabilities	$	69,419		($	83,405	)	$	93,701		($	167,307	)	$	182,547		$	94,955
Cumulative interest-rate sensitivity gap (5)	$	69,419		($	13,986	)	$	79,715		($	87,592	)	$	94,955
Cumulative interest-rate gap as a percentage of total assets at March 31 , 2019		0.93	%		-11.15	%		-7.91	%		-5.60	%		10.03	%
Cumulative interest-earning assets as a percentage of cumulative interest- bearing liabilities at March 31, 2019		144.07	%		96.18	%		115.32	%		90.25	%		109.13	%

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

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

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

(4) Includes FHLB stock.

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

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

53

Net Portfolio Value Analysis. Our interest rate sensitivity also is monitored by management through the use of a model which generates estimates of the changes in our net portfolio value (“NPV”) over a range of interest rate scenarios. NPV is the present value of expected cash flows from assets, liabilities and off-balance sheet contracts. The NPV ratio, under any interest rate scenario, is defined as the NPV in that scenario divided by the market value of assets in the same scenario. The “Sensitivity Measure” is the decline in the NPV ratio, in basis points, caused by a 2% increase or decrease in rates, whichever produces a larger decline. The following table sets forth our NPV as of March 31, 2019 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	$	120,915	$	(47,612	)		(28.25	)%		10.95	%		(3.13	)%
200		135,643		(32,884	)		(19.51	)%		11.99	%		(2.09	)%
100		149,650		(18,877	)		(11.20	)%		12.90	%		(1.18	)%
Static		168,527		-			-			14.08	%		-
(100)		169,868		1,341			0.80	%		13.96	%		(0.12	)%
(200)		160,163		(8,364	)		(4.96	)%		13.09	%		(0.99	)%
(300)		158,056		(10,471	)		(6.21	)%		12.70	%		(1.38	)%

At September 30, 2018, the Company’s NPV was $163.6 million or 15.18% of the market value of assets. Following a 200 basis point increase in interest rates, the Company’s “post shock” NPV would be $123.0 million or 12.3% 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.

54

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

At March 31, 2019, 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, 2018, 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.

55

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 (“Island View Crossing”), 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.

After commencement of the Philadelphia Litigation, the Bank 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. The Bank has also filed foreclosure actions with regard to the commercial properties collateralizing the loans issued to the Gualtieri Parties and Affiliated Entities. These actions are currently stayed pending the resolution of the litigation pending in the bankruptcy court as described below.

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.

Within the bankruptcy, Island View Crossing, as the debtor and the Chapter 11 Trustee, filed a separate adversary proceeding against the Bank seeking to avoid certain collateral mortgages made by Island View Crossing as well as seeking to avoid certain loans made to Island View Crossing including, but not limited to, a $1.4 million loan and a $5.5 million loan. The complaint was filed on or about December 3, 2018. The Bank is evaluating the matter. Given the relatively early stages of the case and the complaint just being filed, we are unable to determine the likelihood of an unfavorable outcome at this time. The Bank , however, believes it meritorious defenses to the claims and intends to vigorously defend against the claims.

Prudential Bancorp is involved in various legal proceedings occurring in the ordinary course of business. Management of the Company, based on discussions with litigation counsel, does not believe that such proceedings will have a material adverse effect on the financial condition or operations of Prudential Bancorp. 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 have a material adverse effect on the financial condition and 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 fiscal year ended September 30, 2018 (“2018 Annual Report”), as such factors could materially affect the Company’s business, financial condition, or future results of operations. As of March 31, 2019, no material changes have occurred to the risk factors of the Company as reported in the 2018 Annual Report. The risks described in the 2018 Annual Report 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.

56

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

(a) and (b) Not applicable.

(c) The Company’s repurchase of equity securities for the three months ended March 31, 2019 were as follows:

Period	Total Number  of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)		Maximum Number of Shares that May Yet Purchased Under Plans or Programs (1)
January 1 - 31, 2019		4,000	$	17.55		4,000		892,500
February 1 - 28, 2019		2,000		17.75		2,000		890,500
March 1 - 31, 2019		4,200		17.45		4,200		886,300
		10,200	$	17.55		10,200

(1) On November 19, 2018, the Company announced that the Board of Directors had approved a third stock repurchase program authorizing the Company to repurchase up 900,000 shares of common stock, approximately 10% of the Company's then outstanding shares.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable

Item 6. Exhibits

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

57

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: May 10, 2019	By: /s/ Dennis Pollack
	Dennis Pollack
	President and Chief Executive Officer

Date: May 10, 2019	By: /s/ Jack E. Rothkopf
	Jack E. Rothkopf
	Senior Vice President, Chief Financial Officer and Treasurer

58

EX-31.1

EXHIBIT 31.1

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

I, Dennis Pollack, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 10, 2019	/s/ Dennis Pollack
	Dennis Pollack
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

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

I, Jack E. Rothkopf, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 10, 2019	/s/Jack E. Rothkopf
	Jack E. Rothkopf
	Senior Vice President, Chief Financial
	Officer and Treasurer

EX-32.0

EXHIBIT 32.0

SECTION 1350 CERTIFICATIONS

Each of the undersigned Chief Executive Officer and Chief Financial Officer of Prudential Bancorp, Inc. (the "Registrant") hereby certifies that the Registrant's Form 10-Q for the quarter ended March 31, 2019 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained therein fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: May 10, 2019	/s/ Dennis Pollack
	Name: Dennis Pollack
	Title: President and Chief Executive Officer

Date: May 10, 2019	/s/ Jack E. Rothkopf
	Name: Jack E. Rothkopf
	Title: Senior Vice President, Chief Financial Officer
	and Treasurer

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

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	PRUDENTIAL BANCORP, INC.
Entity Central Index Key	0001578776
Trading Symbol	pbip
Current Fiscal Year End Date	--09-30
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		8,920,946
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Ex Transition Period	false

XML

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
ASSETS
Cash and amounts due from depository institutions	$ 2,255	$ 2,457
Interest-bearing deposits	48,338	45,714
Total cash and cash equivalents	50,593	48,171
Certificates of deposit	2,351	1,604
Investment and mortgage-backed securities available for sale (amortized cost - March 31, 2019, $448,907; September 30, 2018, $316,719)	446,166	306,187
Investment and mortgage-backed securities held to maturity (fair value - March 31, 2019, $56,159; September 30, 2018, $55,927)	57,361	59,852
Equity securities (amortized cost March 31, 2019, $6)	72
Loans receivable - net of allowance for loan losses (March 31, 2019, $5,227; September 30, 2018, $5,167)	581,555	602,932
Accrued interest receivable	4,314	3,825
Real estate owned	423	1,026
Restricted bank stock - at cost	10,383	7,585
Office properties and equipment - net	7,355	7,439
Bank owned life insurance	28,996	28,691
Deferred tax assets-net	4,112	4,655
Goodwill	6,102	6,102
Core deposit intangible	508	571
Prepaid expenses and other assets	2,107	2,530
TOTAL ASSETS	1,202,398	1,081,170
Deposits:
Noninterest-bearing	12,350	13,677
Interest-bearing	813,149	770,581
Total deposits	825,499	784,258
Advances from Federal Home Loan Bank (short-term)	25,500	10,000
Advances from Federal Home Loan Bank (long-term)	199,594	144,683
Accrued interest payable	2,814	3,232
Advances from borrowers for taxes and insurance	2,260	2,083
Accounts payable and accrued expenses	12,840	8,505
Total liabilities	1,068,507	952,761
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 issued and 8,931,400 outstanding at March 31, 2019; 10,819,006 issued and 8,987,356 outstanding at September 30, 2018	108	108
Additional paid-in capital	117,976	118,345
Treasury stock, at cost: 1,887,606 shares at March 31, 2019 and 1,831,650 shares at September 30, 2018	(28,968)	(27,744)
Retained earnings	49,300	45,854
Accumulated other comprehensive loss	(4,525)	(8,154)
Total stockholders' equity	133,891	128,409
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,202,398	$ 1,081,170

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UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parentheticals) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Statement Of Financial Position [Abstract]
Investment and mortgage-backed securities available for sale, amortized cost (in dollars)	$ 448,907	$ 316,719
Investment and mortgage-backed securities held to maturity, fair value (in dollars)	56,159	55,927
Equity securities, amortized cost (in dollars)	6
Allowance for loan losses on loans receivable (in dollars)	$ 5,227	$ 5,167
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	10,819,006
Common stock, shares outstanding	8,931,400	8,987,356
Number of treasury share purchased	1,887,606	1,831,650

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UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
INTEREST INCOME:
Interest on loans	$ 6,722	$ 6,261	$ 13,184	$ 12,368
Interest on mortgage-backed securities	2,553	851	4,308	1,693
Interest and dividends on investments	1,716	1,060	3,248	2,009
Interest on interest-bearing assets	144	183	396	321
Total interest income	11,135	8,355	21,136	16,391
INTEREST EXPENSE:
Interest on deposits	3,540	1,571	6,580	2,983
Interest on advances from Federal Home Loan Bank (short-term)	122	59	189	141
Interest on advances from Federal Home Loan Bank (long-term)	1,149	497	2,028	903
Total interest expense	4,811	2,127	8,797	4,027
NET INTEREST INCOME	6,324	6,228	12,339	12,364
PROVISION FOR LOAN LOSSES	0	150	0	360
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	6,324	6,078	12,339	12,004
NON-INTEREST INCOME:
Fees and other service charges	$ 156	$ 161	$ 334	$ 328
Type of Revenue [Extensible List]	Financial Service [Member]	Financial Service [Member]	Financial Service [Member]	Financial Service [Member]
Gain on the sale of investments and mortgage-backed securities	$ 117		$ 117
Income from bank owned life insurance	149	$ 156	303	$ 320
Holding gain on equity securities	34		34
Other	86	250	134	334
Total non-interest income	542	567	922	982
NON-INTEREST EXPENSE:
Salaries and employee benefits	2,209	2,037	4,383	4,011
Data processing	201	189	384	365
Professional services	374	402	775	1,194
Office occupancy	275	308	513	579
Depreciation	155	156	310	312
Director compensation	65	61	130	120
Deposit insurance premium	126	80	303	141
Advertising	72	52	153	112
Core deposit amortization	29	34	63	71
Other	640	550	1,124	1,007
Total non-interest expense	4,146	3,869	8,138	7,912
INCOME BEFORE INCOME TAXES	2,720	2,776	5,123	5,074
INCOME TAXES:
Current expense	676	622	1,235	1,270
Deferred (benefit) expense	(296)	(3)	(426)	1,613
Total income tax expense	380	619	809	2,883
NET INCOME	$ 2,340	$ 2,157	$ 4,314	$ 2,191
BASIC EARNINGS PER SHARE (in dollars per share)	$ 0.27	$ 0.24	$ 0.49	$ 0.25
DILUTED EARNINGS PER SHARE (in dollars per share)	0.26	0.24	0.48	0.24
DIVIDENDS PER SHARE (in dollars per share)	$ 0.05	$ 0.05	$ 0.1	$ 0.25

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UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Statement Of Other Comprehensive Income [Abstract]
Net income	$ 2,340	$ 2,157	$ 4,314	$ 2,191
Unrealized holding gains (losses) on available-for-sale securities	4,522	(3,596)	7,945	(4,703)
Tax effect	(949)	756	(1,668)	1,132
Unrealized holding gains (losses) on interest rate swaps	(2,466)	190	(3,204)	234
Tax effect	518	(40)	673	(55)
Reclassification adjustment for net gains recorded in net income	(117)		(117)
Tax effect	25		25
Total other comprehensive income (loss)	1,533	(2,690)	3,654	(3,392)
Comprehensive income (loss)	$ 3,873	$ (533)	$ 7,968	$ (1,201)

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UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional paid-in capital	Treasury Stock	Retained earnings	Accumulated Other Comprehensive Loss	Total
BALANCE at Sep. 30, 2017	$ 108	$ 118,751	$ (26,707)	$ 44,787	$ (760)	$ 136,179
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				2,191		2,191
Other comprehensive income (loss)					(3,392)	(3,392)
Dividends paid ($0.05, $0.05, for three month ended March 31 ,2019 and March 31, 2018 and $0.10, $0.25 per share for six month ended March 31 ,2019 and March 31, 2018, respectively)				(2,246)		(2,246)
Purchase of Treasury Stock (10,200 shares and 50,889 shares for March 31, 2019 and March 31, 2018 respectively and 106,365 shares and 99,430 shares for March 31, 2019 and March 31, 2018 resepectively).			(1,804)			(1,804)
Treasury Stock used for employee benefit plans (48,636 shares and 67,369 shares for March 31, 2019 and for March 31, 2018 respectively and 50,409 shares and 89,540 shares for March 31, 2019 and for March 31, 2018 respectively)		(691)	1,334			643
Stock option expense		239				239
Restricted shares award expense		250				250
Reclassification for adoption of ASU 2016-01				303	(303)
BALANCE at Mar. 31, 2018	108	118,549	(27,177)	45,035	(4,455)	132,060
BALANCE at Dec. 31, 2017	108	119,039	(27,296)	43,328	(1,765)	133,414
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				2,157		2,157
Other comprehensive income (loss)					(2,690)	(2,690)
Dividends paid ($0.05, $0.05, for three month ended March 31 ,2019 and March 31, 2018 and $0.10, $0.25 per share for six month ended March 31 ,2019 and March 31, 2018, respectively)				(450)		(450)
Purchase of Treasury Stock (10,200 shares and 50,889 shares for March 31, 2019 and March 31, 2018 respectively and 106,365 shares and 99,430 shares for March 31, 2019 and March 31, 2018 resepectively).			(906)			(906)
Treasury Stock used for employee benefit plans (48,636 shares and 67,369 shares for March 31, 2019 and for March 31, 2018 respectively and 50,409 shares and 89,540 shares for March 31, 2019 and for March 31, 2018 respectively)		(691)	1,025			334
Stock option expense		70				70
Restricted shares award expense		131				131
BALANCE at Mar. 31, 2018	108	118,549	(27,177)	45,035	(4,455)	132,060
BALANCE at Sep. 30, 2018	108	118,345	(27,744)	45,854	(8,154)	128,409
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				4,314		4,314
Other comprehensive income (loss)					3,654	3,654
Dividends paid ($0.05, $0.05, for three month ended March 31 ,2019 and March 31, 2018 and $0.10, $0.25 per share for six month ended March 31 ,2019 and March 31, 2018, respectively)				(893)		(893)
Purchase of Treasury Stock (10,200 shares and 50,889 shares for March 31, 2019 and March 31, 2018 respectively and 106,365 shares and 99,430 shares for March 31, 2019 and March 31, 2018 resepectively).			(2,248)			(2,248)
Treasury Stock used for employee benefit plans (48,636 shares and 67,369 shares for March 31, 2019 and for March 31, 2018 respectively and 50,409 shares and 89,540 shares for March 31, 2019 and for March 31, 2018 respectively)		(953)	1,024			71
Stock option expense		277				277
Restricted shares award expense		307				307
Reclassification for adoption of ASU 2016-01				25	(25)
BALANCE at Mar. 31, 2019	108	117,976	(28,968)	49,300	(4,525)	133,891
BALANCE at Dec. 31, 2018	108	118,621	(29,399)	47,381	(6,033)	130,678
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				2,340		2,340
Other comprehensive income (loss)					1,533	1,533
Dividends paid ($0.05, $0.05, for three month ended March 31 ,2019 and March 31, 2018 and $0.10, $0.25 per share for six month ended March 31 ,2019 and March 31, 2018, respectively)				(446)		(446)
Purchase of Treasury Stock (10,200 shares and 50,889 shares for March 31, 2019 and March 31, 2018 respectively and 106,365 shares and 99,430 shares for March 31, 2019 and March 31, 2018 resepectively).			(561)			(561)
Treasury Stock used for employee benefit plans (48,636 shares and 67,369 shares for March 31, 2019 and for March 31, 2018 respectively and 50,409 shares and 89,540 shares for March 31, 2019 and for March 31, 2018 respectively)		(921)	992			71
Stock option expense		126				126
Restricted shares award expense		150				150
Reclassification for adoption of ASU 2016-01				25	(25)	25
BALANCE at Mar. 31, 2019	$ 108	$ 117,976	$ (28,968)	$ 49,300	$ (4,525)	$ 133,891

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UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parentheticals) - $ / shares	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Statement Of Stockholders Equity [Abstract]
Dividends paid (in dollars per share)	$ 0.05	$ 0.05	$ 0.10	$ 0.25
Purchase of treasury stock	10,200	50,889	106,365	99,430
Treasury stock used for employee benefit plan	48,636	67,369	50,409	89,540

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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
OPERATING ACTIVITIES:
Net income	$ 4,314	$ 2,191
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	310	312
Net accretion of premiums/discounts	(766)	234
Provision for loan losses	0	360
Net amortization of deferred loan fees and costs	(58)	165
Share-based compensation expense for stock options and share awards	584	489
Income from bank owned life insurance	(303)	(320)
Loss (gain) on sale of other real estate owned	46	(60)
Gain on sale of investments available for sale	(117)
Holding gains on equity securities	(34)
Deferred income tax expense (benefit)	(426)	1,613
Changes in assets and liabilities which used cash:
Accrued interest receivable	(489)	(614)
Accrued interest payable	(418)	(605)
Other, net	601	(149)
Net cash provided by operating activities	3,244	3,616
INVESTING ACTIVITIES:
Purchase of investment and mortgage-backed securities available for sale	(153,282)	(52,747)
Purchase of investment and mortgage-backed securities held to maturity		(2,458)
Sale of investments available for sale	12,770
Loans originated	(45,722)	(54,131)
Principal collected on loans	67,157	40,860
Principal payments received on investment and mortgage-backed securities:
Held-to-maturity	2,455	681
Available-for-sale	9,461	7,140
Redemption of FHLB Stock	5,589	1,596
Purchase of FHLB stock	(8,387)	(2,353)
Proceeds from sale of other real estate owned	603	278
Purchases of equipment	(225)	(179)
Net cash used in investing activities	(109,581)	(61,313)
FINANCING ACTIVITIES:
Net increase (decrease) in demand deposits, NOW accounts, and savings accounts	10,792	(10,064)
Net increase in certificates of deposit	30,449	48,784
Proceeds from FHLB advances - short term	15,500
Proceeds from FHLB advances - long term	74,223	39,500
Repayment of FHLB advances - long term	(19,312)	(27,194)
Increase in advances from borrowers for taxes and insurance	177	283
Cash dividends paid	(893)	(2,246)
Treasury stock used for employee benefit plans	71	643
Purchase of treasury stock	(2,248)	(1,804)
Net cash provided by financing activities	108,759	47,902
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	2,422	(9,795)
CASH AND CASH EQUIVALENTS - Beginning of period	48,171	27,903
CASH AND CASH EQUIVALENTS - End of period	50,593	18,108
Cash paid during the period for:
Interest on deposits and advances from Federal Home Loan Bank	9,215	4,632
Income taxes	$ 25	1,400
Loans transferred to other real estate owned		$ 111

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Mar. 31, 2019

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 branch office), administrative office, and nine additional full-service branch offices. Eight 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 10 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.

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019, 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, 2018. The significant accounting policies followed in the presentation of interim financial results are the same as those followed on an annual basis. These policies are presented on pages 84 through 88 of the Annual Report on Form 10-K for the year ended September 30, 2018.

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, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

Effective October 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers – Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard utilizing the modified retrospective approach with a cumulative effect of adoption for the impact from uncompleted contracts at the date of adoption. The adoption of this guidance did not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustments were recorded.

Management determined that the primary sources of revenue emanating from interest and dividend income on loans and securities along with noninterest revenue resulting from investment security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit cards fees, and income on bank-owned life insurance are not within the scope of ASC 606. As a result, no changes were made during the period related to these sources of revenue, which cumulatively comprise 98 percent of the total revenue of the Company. Services within the scope of ASC 606 include income from service charges on deposit accounts, other service income, ATM fees and gain on sale of OREO, net. For these accounts, fees are related to specific customer transactions and are attributable to specific performance obligations of the Bank where the revenue is recognized at a defined point in time, completion of the requested service/transaction.

Effective October 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires 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 (g) 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. The adoption of this Update did not have a significant impact on the Company’s financial statements.

Recent Accounting Pronouncements

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 one percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

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. 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 and results of operations.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718), which simplified the accounting for nonemployee share-based payment transactions. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update improve the following areas of nonemployee share-based payment accounting: (a) the overall measurement objective, (b) the measurement date, (c) awards with performance conditions, (d) classification reassessment of certain equity-classified awards, (e) calculated value (nonpublic entities only), and (f) intrinsic value (nonpublic entities only). The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. 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. 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements. The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. 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 October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815). The amendments in this Update permit use of the Overnight Index Swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. For public business entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, which addressed issues lessors sometimes encounter. Specifically addressed in this Update were issues related to 1) determining the fair value of the underlying asset by the lessor that are not manufacturers or dealers (generally financial institutions and captive finance companies), and 2) lessors that are depository and lending institutions should classify principal and payments received under sales-type and direct financing leases within investing activities in the cash flow statement. The ASU also exempts both lessees and lessors from having to provide the interim disclosures required by ASC 250-10-50-3 in the fiscal year in which a company adopts the new leases standard. The amendments addressing the two lessor accounting issues are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the effective date is for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. 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

6 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

EARNINGS PER SHARE

2. EARNINGS PER SHARE

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

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

	Three Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	2,340	$	2,340	$	2,157	$	2,157
Weighted average shares outstanding		8,777,252		8,777,252		8,851,805		8,851,805
Effect of common stock equivalents		-		144,309		-		326,295
Adjusted weighted average shares used in earnings per share computation		8,777,252		8,921,561		8,851,805		9,178,100
Earnings per share - basic and diluted	$	0.27	$	0.26	$	0.24	$	0.24

	Six Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	4,314	$	4,314	$	2,191	$	2,191
Weighted average shares outstanding		8,790,822		8,790,822		8,853,479		8,853,479
Effect of common stock equivalents		-		131,262		-		351,436
Adjusted weighted average shares used in earnings per share computation		8,790,822		8,922,084		8,853,479		9,204,915
Earnings  per share - basic and diluted	$	0.49	$	0.48	$	0.25	$	0.24

As of March 31, 2019 and 2018, there were 584,832 and 873,159 shares of common stock, respectively, subject to options with an exercise price less than the then current market and which were included in the computation of diluted earnings per share. At March 31, 2019 and 2018, there were 202,500 and 177,500 shares, respectively, that had exercise prices greater than the then current market value and were considered anti-dilutive at such dates.

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ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Mar. 31, 2019

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, for the periods presented:

	Three Months Ended March 31,									Three Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss)  on interest rate swaps (a)			Total accumulated  other comprehensive  (loss) income			Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)		Total accumulated other comprehensive  (loss) income
Beginning balance, January 1	$	(5,615	)	$	(418	)	$	(6,033	)	$	(2,125	)	$	360	$	(1,765	)
Other comprehensive (loss) income before reclassifications		3,572			(1,947	)		1,625			(2,840	)		150		(2,690	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,965	)		510		(4,455	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)		-			-		-
Reclassification for net gains recorded in net income		(92	)		-			(92	)		-			-		-
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

(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, for the periods presented:

	Six Months Ended March 31,									Six Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)			Total accumulated  other comprehensive (loss) income			Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)		Total accumulated  other comprehensive  (loss) income
Beginning balance, October 1	$	(8,320	)	$	166		$	(8,154	)	$	(1,091	)	$	331	$	(760	)
Other comprehensive (loss) income before reclassification		6,277			(2,531	)		3,746			(3,571	)		179		(3,392	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,662	)		510		(4,152	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)
Reclassification for net gains recorded in net income		(92	)		-			(92	)		(303	)		-		(303	)
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

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

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INVESTMENT AND MORTGAGE-BACKED SECURITIES

6 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

INVESTMENT AND MORTGAGE-BACKED SECURITIES

4. INVESTMENT AND MORTGAGE-BACKED SECURITIES

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

	March 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,253	$	-	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		307,219		1,859		(3,361	)		305,717
State and political subdivisions		23,206		742		(1,155	)		22,793
Corporate bonds		93,229		436		(831	)		92,834
Total securities available for sale	$	448,907	$	3,037	$	(5,778	)	$	446,166
Securities Held to Maturity:
U.S. government and agency obligations	$	31,500	$	127	$	(1,669	)	$	29,958
Mortgage-backed securities - U.S. government agencies		5,337		166		(53	)		5,450
State and political subdivisions		20,524		356		(129	)		20,751
Total securities held to maturity	$	57,361	$	649	$	(1,851	)	$	56,159

	March 31, 2019
	Amortized		Gross		Gross		Fair
	Cost		Gains		Losses		Value
	(Dollars in Thousands)
Equity securities
FHLMC preferred stock	$	6	$	66	$	-	$	72
Total equity securities	$	6	$	66			$	72

The Company recognized net gains on equity securities of $34,000 and $0 for the six and three months ended March 31, 2019, respectively. No net gains or losses on sold equity securities were realized during the three or six months ended March 31, 2018.

	September 30, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,562	$	-	$	(1,391	)	$	24,171
State and political subdivisions		22,078		-		(542	)		21,536
Mortgage-backed securities - U.S. government agencies		193,451		77		(6,168	)		187,360
Corporate bonds		75,622		-		(2,539	)		73,083
Total debt securities available for sale		316,713		77		(10,640	)		306,150
FHLMC preferred stock		6		31		-			37
Total securities available for sale	$	316,719	$	108	$	(10,640	)	$	306,187
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	85	$	(3,311	)	$	30,274
State and political subdivisions		20,574		2		(696	)		19,880
Mortgage-backed securities - U.S. government agencies		5,778		148		(153	)		5,773
Total securities held to maturity	$	59,852	$	235	$	(4,160	)	$	55,927

As of March 31, 2019, the Bank maintained $251.5 million of securities in a safekeeping account at the FHLB of Pittsburgh available to be used for collateral as a convenience. The Bank is not required to maintain any specific collateral for its borrowings; therefore these securities are not restricted and could be sold or transferred if needed.

The following table shows the gross unrealized losses and related fair values of the Company’s investment and mortgage-backed securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position as of March 31, 2019:

	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	$	-		$	-	$	(431	)	$	24,822	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		(233	)		31,387		(3,128	)		106,545		(3,361	)		137,932
State and political subdivisions		(1,155	)		22,793		-			-		(1,155	)		22,793
Corporate bonds		(123	)		15,120		(708	)		37,520		(831	)		52,640
Total securities available for sale	$	(1,511	)	$	69,300	$	(4,267	)	$	168,887	$	(5,778	)	$	238,187
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,669	)	$	28,831	$	-		$	-	$	(1,669	)	$	28,831
Mortgage-backed securities - U.S. government agencies		-			-		(53	)		2,034		(53	)		2,034
State and political subdivisions		-			-		(129	)		6,944		(129	)		6,944
Total securities held to maturity	$	(1,669	)	$	28,831	$	(182	)	$	8,978	$	(1,851	)	$	37,809
Total	$	(3,180	)	$	98,131	$	(4,449	)	$	177,865	$	(7,629	)	$	275,996

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 as of September 30, 2018:

	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	$	(89	)	$	4,479	$	(1,302	)	$	19,692	$	(1,391	)	$	24,171
Mortgage-backed securities -
U.S. government agencies		(1,821	)		92,851		(4,347	)		86,268		(6,168	)		179,119
State and political subdivisions		(542	)		21,536		-			-		(542	)		21,536
Corporate debt securities		(1,719	)		58,753		(820	)		14,330		(2,539	)		73,083
Total debt securities available for sale	$	(4,171	)	$	177,619	$	(6,469	)	$	120,290	$	(10,640	)	$	297,909
Securities Held to Maturity:
U.S. government and agency obligations	$	-		$	-	$	(3,311	)	$	27,190	$	(3,311	)	$	27,190
Mortgage-backed securities -
U.S. government agencies		(106	)		2,630		(46	)		930		(152	)		3,560
State and political subdivisions		(234	)		11,238		(463	)		6,618		(697	)		17,856
Total securities held to maturity	$	(340	)	$	13,868	$	(3,820	)	$	34,738	$	(4,160	)	$	48,606
Total	$	(4,511	)	$	191,487	$	(10,289	)	$	155,028	$	(14,800	)	$	346,515

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

The Company assesses whether a credit loss exists with respect to a security by considering whether (1) the Company has the intent to sell the security, (2) it is more likely than not that it will be required to sell the security before recovery has occurred, or (3) it does not expect to recover the entire amortized cost basis of the security. The Company bifurcates the OTTI impact on impaired securities where impairment in value is 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 six months ended March 31, 2019 and 2018, the Company did not record any credit losses on investment securities through earnings.

U.S. Government and Agency Obligations - At March 31, 2019, there were eight securities in a gross unrealized loss position for less than 12 months while there were 14 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 any of these investments to be other-than-temporarily impaired at March 31, 2019.

Mortgage-Backed Securities – At March 31, 2019, there were 14 mortgage-backed securities in a gross unrealized loss position for less than 12 months, while there were 58 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 March 31, 2019.

Corporate Bonds – At March 31, 2019, there were seven securities in a gross unrealized loss position for less than 12 months, while there were twenty-one securities in a gross unrealized loss position for more than 12 months at such date. These securities are issued by publicly traded companies with an investment grade rating by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019.

State and political subdivisions – At March 31, 2019, there were seven securities in a gross unrealized loss for less than 12 months, while there were five securities in a gross unrealized loss position for more than 12 months at such date. These securities were issued by local municipalities/school districts located in the Commonwealth of Pennsylvania with an investment grade rating by at least one bond credit rating agency. As a result, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2019.

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

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

	March 31, 2019
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	1,704	$	1,715	$	5,256	$	5,168
Due after five through ten years		23,736		23,712		7,511		7,434
Due after ten years		26,584		25,282		128,921		127,847
Total	$	52,024	$	50,709	$	141,688	$	140,449

During both the three and six month periods ended March 31, 2019, the Company sold three mortgage-back securities with an aggregate amortized cost of $12.8 million for a recognized aggregate gain of $117,000 (pre-tax). During the both three and six month periods ended March 31, 2018, the Company did not sell any securities.

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LOANS RECEIVABLE

6 Months Ended

Mar. 31, 2019

Receivables [Abstract]

LOANS RECEIVABLE

5. LOANS RECEIVABLE

Loans receivable consist of the following:

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
One-to-four family residential	$	299,323		$	324,865
Multi-family residential		35,094			34,355
Commercial real estate		128,252			119,511
Construction and land development		168,465			160,228
Loans to financial institutions		6,000			6,000
Commercial business		20,934			17,792
Leases		1,139			1,687
Consumer		891			953
Total loans		660,098			665,391
Undisbursed portion of loans-in-process		(70,462	)		(54,474	)
Deferred loan fees (net)		(2,854	)		(2,818	)
Allowance for loan losses		(5,227	)		(5,167	)
Net loans	$	581,555		$	602,932

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at March 31, 2019:

	One- to- four family residential		Multi- family residential		Commercial  real estate		Construction and land  development		Loans to financial institutions		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,314		385		1,342		1,370		68		235		13		20		480		5,227
Total ending allowance balance	$	1,314	$	385	$	1,342	$	1,370	$	68	$	235	$	13	$	20	$	480	$	5,227
Loans:
Individually evaluated for impairment	$	4,830	$	287	$	2,196	$	8,750	$	-	$	-	$	-	$	10			$	16,073
Collectively evaluated for impairment		294,493		34,807		126,056		159,715		6,000		20,934		1,139		881				644,025
Total loans	$	299,323	$	35,094	$	128,252	$	168,465	$	6,000	$	20,934	$	1,139	$	891			$	660,098

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, 2018:

	One- to- four family residential		Multi- family residential		Commercial  real estate		Construction  and land development		Loans to  financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
		(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,343		347		1,154		1,554		64		187		18		18		482		5,167
Total ending allowance balance	$	1,343	$	347	$	1,154	$	1,554	$	64	$	187	$	18	$	18	$	482	$	5,167
Loans:
Individually evaluated for impairment	$	5,081	$	298	$	1,919	$	8,750	$	-	$	-	$	-	$	-			$	16,048
Collectively evaluated for impairment		319,784		34,057		117,592		151,478		6,000		17,792		1,687		953				649,343
Total loans	$	324,865	$	34,355	$	119,511	$	160,228	$	6,000	$	17,792	$	1,687	$	953			$	665,391

The loan portfolio is segmented at a level that allows management to monitor both risk and performance. Management evaluates for potential impairment all construction loans, multi-family loans, commercial real estate loans, commercial business loans, loans to financial institutions, leases and 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 March 31, 2019, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,830	$	4,830	$	5,178
Multi-family residential		-		-		287		287		287
Commercial real estate		-		-		2,196		2,196		2,357
Construction and land development		-		-		8,750		8,750		11,131
Consumer		-		-		10		10		10
Total impaired loans	$	-	$	-	$	16,073	$	16,073	$	18,963

The following table presents impaired loans by class as of September 30, 2018, 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	$	-	$	-	$	5,081	$	5,081	$	5,432
Multi-family		-		-		298		298		298
Commercial real estate		-		-		1,919		1,919		2,057
Construction and land development		-		-		8,750		8,750		11,131
Total impaired loans	$	-	$	-	$	16,048	$	16,048	$	18,918

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

	Three Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized  on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,952	$	21	$	5
Multi-family residential		290		5		-
Commercial real estate		2,202		10		1
Construction and land development		8,752		-		-
Consumer		10		-		-
Total impaired loans	$	16,205	$	36	$	6

	Three Months Ended March 31, 2018
	Average  Recorded  Investment		Income Recognized  on Accrual Basis		Income  Recognized on  Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	9,777	$	43	$	-
Multi-family residential		311		5		-
Commercial real estate		3,316		29		-
Construction and land development		8,744		-		-
Consumer		10		-		-
Total impaired loans	$	22,158	$	77	$	-

	Six Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized  on Accrual Basis		Income  Recognized on  Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,055	$	44	$	10
Multi-family residential		293		10		-
Commercial real estate		2,133		20		2
Construction and land development		8,752		-		-
Consumer		8		-		-
Total impaired loans	$	16,242	$	74	$	12

	Six Months Ended March 31, 2018
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	8,521	$	77	$	4
Multi-family residential		316		11		-
Commercial real estate		2,942		58		-
Construction and land development		8,879		-		-
Consumer		10		-		-
Total impaired loans	$	20,668	$	146	$	4

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

	March 31, 2019
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	291,751	$	2,742	$	4,830	$	299,323
Multi-family residential		34,481		326		287		35,094
Commercial real estate		121,958		4,098		2,196		128,252
Construction and land development		159,715		-		8,750		168,465
Loans to financial institutions		6,000		-		-		6,000
Commercial business		20,934		-		-		20,934
Total loans	$	634,839	$	7,166	$	16,063	$	658,068

	September 30, 2018
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	317,033	$	2,751	$	5,081	$	324,865
Multi-family residential		34,057		-		298		34,355
Commercial real estate		115,670		1,922		1,919		119,511
Construction and land development		151,478		-		8,750		160,228
Loans to financial institutions		6,000		-		-		6,000
Commercial business		17,792		-		-		17,792
Total loans	$	642,030	$	4,673	$	16,048	$	662,751

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

	March 31, 2019
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	296,034	$	3,289	$	299,323
Leases		1,139		-		1,139
Consumer		891		-		891
Total loans	$	298,064	$	3,289	$	301,353

	September 30, 2018
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	321,853	$	3,012	$	324,865
Leases		1,687		-		1,687
Consumer		953		-		953
Total loans	$	324,493	$	3,012	$	327,505

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 tables present the loan categories of the loan portfolio summarized by the aging categories of performing loans, delinquent loans and nonaccrual loans:

	March 31, 2019
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	295,160	$	993	$	3,170	$	4,163	$	299,323	$	3,289	$	-
Multi-family residential		34,934		160		-		160		35,094		-		-
Commercial real estate		126,777		-		1,475		1,475		128,252		1,475		-
Construction and land development		159,715		-		8,750		8,750		168,465		8,750		-
Financial institutions		6,000		-		-		-		6,000		-		-
Commercial business		20,934		-		-		-		20,934		-		-
Leases		1,139		-		-		-		1,139		-		-
Consumer		783		108		-		108		891		-		-
Total loans	$	645,442	$	1,261	$	13,395	$	14,656	$	660,098	$	13,514	$	-

	September 30, 2018
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	321,749	$	1,037	$	2,079	$	3,116	$	324,865	$	3,012	$	-
Multi-family residential		34,355		-		-		-		34,355		-		-
Commercial real estate		117,335		722		1,454		2,176		119,511		1,627		-
Construction and land development		151,478		-		8,750		8,750		160,228		8,750		-
Commercial business		17,792		-		-		-		17,792		-		-
Loans to financial institutions		6,000		-		-		-		6,000		-		-
Leases		1,687		-		-		-		1,687		-		-
Consumer		837		116		-		116		953		-		-
Total loans	$	651,233	$	1,875	$	12,283	$	14,158	$	665,391	$	13,389	$	-

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 a single borrower 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 borrowers’ ability to make required payments as well as reducing the value of the collateral property. Such lending is additionally subject to the risk that if the estimate of construction cost proves to be inaccurate, the Company potentially will be compelled to advance additional funds 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 construction 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 six month periods ended March 31, 2019 and 2018:

	Three Months Ended March 31, 2019
	One- to  four-family  residential			Multi-  family  residential		Commercial  real estate		Construction  and land  development			Financial  institutions		Commercial  business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2018	$	1,427		$	372	$	1,147	$	1,445		$	67	$	193	$	16		$	13	$	487		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(173	)		13		195		(75	)		1		42		(3	)		7		(7	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

	Six Months Ended March  31, 2019
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial  business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at September 30, 2018	$	1,343		$	347	$	1,154	$	1,554		$	64	$	187	$	18		$	18	$	482		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(89	)		38		188		(184	)		4		48		(5	)		2		(2	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

	Three Months Ended March 31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2017	$	1,270	$	158	$	1,064	$	1,621		$	-	$	26	$	20	$	24	$	493		$	4,676
Charge-offs		-		-		-		(12	)		-		-		-		-		-			(12	)
Recoveries		27		-		-		-			-		-		-		-		-			27
Provision		11		47		19		(144	)		62		80		9		73		(7	)		150
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083	$	1,465		$	62	$	106	$	29	$	97	$	486		$	4,841

	Six Months Ended March  31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate			Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2017	$	1,241	$	205	$	1,201		$	1,358		$	-	$	4	$	23	$	24	$	410	$	4,466
Charge-offs		-		-		-			(12	)		-		-		-		-		-		(12	)
Recoveries		27		-		-			-			-		-		-		-		-		27
Provision		40		-		(118	)		119			62		102		6		73		76		360
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083		$	1,465		$	62	$	106	$	29	$	97	$	486	$	4,841

The Company recorded no provision for loan losses for the three and six months period ended March 31, 2019, respectively, compared to $150,000 and $360,000 for the comparable three and six months periods in fiscal 2018. During both the quarter and six months ended March 31, 2019, the Company recorded no charge offs and recoveries of $60,000. During both the quarter and six months ended March 31, 2018, the Company recorded charge offs of $12,000 and recoveries of $27,000.

At March 31, 2019, the Company had nine loans aggregating $6.0 million that were classified as troubled debt restructurings (“TDRs”). Five of the nine loans aggregating $644,000 were performing in accordance with their restructured terms as of March 31, 2019 and accruing interest, with four of the TDRs on non-accrual status. Three of the TDRs which are classified as non-accrual totaling $4.9 million are a part of a troubled lending relationship totaling $10.6 million (after taking into account the previously disclosed $1.9 million write-down recognized during the quarter ending March 31, 2017 related to this borrowing relationship). The remaining TDR is also on non-accrual and consists of a $445,000 loan secured by various commercial and residential properties.

The Company did not restructure any loans during the three and six months ended March 31, 2019, or during the three and six months ending March 31, 2018.

        No TDRs defaulted during the six-month period ending March 31, 2019 or 2018.

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DEPOSITS

6 Months Ended

Mar. 31, 2019

Deposits [Abstract]

DEPOSITS

6. DEPOSITS

Deposits consist of the following major classifications:

	March 31,					September 30,
	2019					2018
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	67,346		8.2	%	$	66,120		8.4	%
Interest-bearing checking accounts		64,156		7.7			49,209		6.3
Non interest-bearing checking accounts		12,350		1.5			13,620		1.7
Passbook, club and statement savings		87,383		10.6			91,489		11.7
Certificates maturing in six months or less		352,331		42.7			301,184		38.4
Certificates maturing in more than six months		241,933		29.3			262,636		33.5
Total	$	825,499		100.0	%	$	784,258		100.0	%

Certificates of $250,000 and over totaled $29.7 million as of March 31, 2019 and $81.9 million as of September 30, 2018.

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ADVANCES FROM FEDERAL HOME LOAN BANK - SHORT TERM

6 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

ADVANCES FROM FEDERAL HOME LOAN BANK - SHORT TERM

7. ADVANCES FROM FEDERAL HOME LOAN BANK – SHORT TERM

As of March 31, 2019 and September 30, 2018 outstanding balances and related information of short-term borrowings from the FHLB are summarized as follows:

						March 31,		September 30,
						2019		2018
Type	Maturity Date	Coupon			Call Date	Amount		Amount
						(Dollars in Thousands)
Fixed Rate - Repo Plus	12-Oct-18		2.31	%	Not Applicable	$	-	$	10,000
Weighted average rate			2.31	%
Fixed Rate - Repo Plus	1-Apr-19		2.70	%	Not Applicable	$	500	$	-
Fixed Rate - Repo Plus	15-Apr-19		2.71	%	Not Applicable		10,000		-
Fixed Rate - Repo Plus	17-Apr-19		2.70	%	Not Applicable		15,000		-
Weighted average rate			2.70	%		$	25,500	$	10,000

As of March 31, 2019, short-term advances include a $10.0 million and $15.0 million 30 day FHLB advances associated with interest rate swap contracts. The additional $500,000 at March 31, 2019 consisted of an overnight borrowing to provide additional short-term liquidity. As of September 30, 2018, there was a $10.0 million 30 day FHLB advance associated with an interest rate swap contract

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ADVANCES FROM FEDERAL HOME LOAN BANK - LONG TERM

6 Months Ended

Mar. 31, 2019

Advances from Federal Home Loan Banks [Abstract]

ADVANCES FROM FEDERAL HOME LOAN BANK - LONG TERM

8. ADVANCES FROM FEDERAL HOME LOAN BANK – LONG TERM

Pursuant to collateral agreements with the FHLB of Pittsburgh, advances are secured by a blanket collateral of loans held by the Company and qualifying fixed-income securities and FHLB stock. The long-term advances outstanding as of March 31, 2019 and September 30, 2018 are as follows:

Lomg-term FHLB advances:
	Maturity range		Weighted average			Stated interest rate range						March 31,		September 30,
Description	from	to	interest rate			from			to			2019		2018
												(Dollars in Thousands)
Fixed Rate - Amortizing	1-Oct-18	30-Sep-20		1.53	%		1.53	%		1.53	%	$	940	$	1,639
Fixed Rate - Amortizing	1-Oct-20	30-Sep-21		2.69	%		1.94	%		2.83	%		18,851		23,288
Fixed Rate - Amortizing	1-Oct-21	30-Sep-22		2.80	%		1.99	%		3.05	%		10,299		11,848
Fixed Rate - Amortizing	1-Oct-22	30-Sep-23		2.88	%		1.94	%		3.11	%		7,746		8,550
Total				2.73	%							$	37,836	$	45,325
Fixed Rate - Advances	1-Oct-18	30-Sep-19		2.66	%		1.40	%		2.66	%	$	3,011	$	18,528
Fixed Rate - Advances	1-Oct-19	30-Sep-20		2.62	%		1.38	%		3.06	%		12,365		12,413
Fixed Rate - Advances	1-Oct-20	30-Sep-21		2.45	%		1.42	%		2.92	%		3,027		3,037
Fixed Rate - Advances	1-Oct-21	30-Sep-22		2.28	%		1.94	%		3.23	%		23,358		23,380
Fixed Rate - Advances	1-Oct-22	30-Sep-23		2.72	%		2.18	%		3.22	%		65,999		37,000
Fixed Rate - Advances	1-Oct-23	30-Sep-24		2.99	%		2.98	%		3.20	%		53,998		5,000
Total				2.73	%							$	161,758	$	99,358
				2.73	%					Total		$	199,594	$	144,683

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DERIVATIVES

6 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

9. DERIVATIVES

The Company has contracted with a third party to participate in interest rate swap contracts. One of the swaps is a cash flow hedge associated with FHLB advances at both March 31, 2019 and September 30, 2018, while there are seven additional cash flow hedges tied to wholesale funding at March 31, 2019. These interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments. During the quarter ended March 31, 2019, $3,000 of expense was recognized as ineffectiveness through earnings, while $6,000 of income was recognized as ineffectiveness through earnings during the comparable period in fiscal 2018. During the six months ended March 31, 2019, $5,000 of expense was recognized as ineffectiveness through earnings, while $48,000 of income was recognized as ineffectiveness through earnings during the comparable period in 2018. There were nine interest rate swaps designated as fair value hedges involving the receipt of variable-rate payments from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements that were applicable to two loans and seven investment securities as of both March 31, 2019 and September 30, 2018. The fair value of the swaps is recorded in the other liabilities section of the statement of financial condition.

Below is a summary of the interest rate swap agreements and their terms as of March 31, 2019.

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Loss
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	(311	)
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(87	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(147	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(275	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(69	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(252	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(165	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(160	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Interest rate swap contract	90 Day wholesale funding		20,000		2.78	%	3 Mth Libor	11-Jan-24		(492	)
Interest rate swap contract	90 Day wholesale funding		15,000		2.75	%	3 Mth Libor	18-Jan-24		(345	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.66	%	3 Mth Libor	20-Feb-24		(491	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.56	%	3 Mth Libor	28-Feb-24		(377	)
Interest rate swap contract	30 Day wholesale funding		15,000		2.51	%	1 Mth Libor	15-Feb-24		(257	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.59	%	3 Mth Libor	13-Mar-24		(409	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.51	%	3 Mth Libor	27-Mar-24		(314	)
Total									$	(4,151	)

Below is a summary of the interest rate swap agreements and their terms as of September 30, 2018.

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Gain (Loss)
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	35
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(19	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(31	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(57	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(14	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(52	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(32	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(32	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Total									$	(202	)

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

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INCOME TAXES

6 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

INCOME TAXES

10. INCOME TAXES

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

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
Deferred tax assets:
Allowance for loan losses	$	1,428		$	1,445
Nonaccrual interest		619			312
Accrued vacation		4			29
Capital loss carryforward		356			356
Split dollar life insurance		8			10
Post-retirement benefits		77			85
Unrealized losses on available for sale securities		576			2,212
Unrealized losses on interest rate swaps		629			-
Deferred compensation		811			838
Goodwill		75			80
Other		50			55
Employee benefit plans		330			239
Total deferred tax assets		4,963			5,661
Valuation allowance		(356	)		(356	)
Total deferred tax assets, net of valuation allowance		4,607			5,305
Deferred tax liabilities:
Property		127			179
Unrealized gains on interest rate swaps		-			44
Purchase accounting adjustments		102			59
Deferred loan fees		266			368
Total deferred tax liabilities		495			650
Net deferred tax assets	$	4,112		$	4,655

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 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 $356,000 at both March 31, 2019, and September 30, 2018, respectively.

For the six-month period ended March 31, 2019, the Company recorded income tax expense of $809,000 compared to income tax expense of $2.9 million, for the period ended March 31, 2018, which included a $1.8 million one-time non-cash charge related to a re-evaluation of the Company’s deferred tax assets as a result of the enactment of the Tax Cuts and Jobs Act in December 2017. The re-evaluation reflected the effect of the significant decline in the federal corporate income tax rate applicable to the Company. During fiscal 2018, commencing with the quarter ended December 31, 2017, the Company’s federal statutory income tax rate was 24.25% as compared to companies which are calendar year tax reporting companies whose statutory rate decreased to 21% starting January 1, 2018. Effective October 1, 2018, the Company’s federal statutory tax rate was reduced to 21%.

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. During fiscal 2017, the Internal Revenue Service conducted an audit of the Company’s tax return for the year ended September 30, 2014, and no adverse findings were reported. 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

6 Months Ended

Mar. 31, 2019

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

STOCK COMPENSATION PLANS

11. STOCK COMPENSATION PLANS

The Company maintains the 2008 Recognition and Retention Plan and Trust (the “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 (on a converted basis) of the Company’s common stock in the open market for an aggregate 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. 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. 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. In March 2018, the Company granted 8,209 shares under the 2008 RRP and 18,291 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 six months ended March 31, 2019, an aggregate of $150,000 and $307,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. During the three and six months ended March 31, 2018, $99,000 and $250,000, respectively, was recognized in compensation expense for the grants pursuant to the 2008 RRP and the grants pursuant to the 2014 SIP. At March 31, 2019, approximately $1.1 million in additional compensation expense for unvested shares awarded related to the 2008 RRP and 2014 SIP remained unrecognized.

A summary of the Company’s non-vested stock award activity for the six months ended March 31, 2019 and 2018 is presented in the following tables:

	Six Months Ended March 31, 2019
	Number of Shares (1)			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2018		116,916		$	14.36
Granted		-			-
Forfeited		-			-
Vested		(44,024	)		13.38
Non-vested stock awards at the March 31, 2019		72,892		$	14.95

	Six Months Ended March 31, 2018
	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2017		142,594		$	12.79
Granted		26,500			18.46
Forfeited		4,636			11.91
Vested		(44,647	)		12.06
Non-vested stock awards at the March 31, 2018		129,083		$	14.17

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 March 31, 2019, all of the options had been awarded under the 2008 Option Plan. The 2014 SIP reserved up to 714,145 shares for issuance pursuant to options. Options to purchase 605,000 shares were awarded during February 2015. During August 2016, the Company granted 18,867 shares under the 2008 Option Plan and 8,633 shares under the 2014 SIP. In March 2017, the Company granted 22,828 shares under the 2014 SIP. In May 2017, the Company granted 24,717 shares under the 2014 SIP and 283 shares under the 2008 Option Plan. In March 2018, the Company granted 159,265 shares under the 2014 SIP and 18,235 shares under the 2008 Option Plan.

A summary of the status of the Company’s stock options under the 2008 Option Plan and the 2014 SIP as of March 31, 2019 and 2018 are presented below:

	Six Months Ended  March 31, 2019
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2018		869,026		$	13.41
Granted		-			-
Exercised		(75,694	)		11.77
Forfeited		(6,000	)		12.23
Outstanding at  March 31, 2019		787,332		$	13.58
Exercisable at March 31, 2019		512,788		$	12.13

	Six Months Ended  March 31, 2018
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2017		922,564		$	12.04
Granted		177,500			18.46
Exercised		(37,171	)		11.50
Forfeited		(12,234	)		11.90
Outstanding at March 31, 2018		1,050,659		$	13.15
Exercisable at March 31, 2018		595,385		$	11.53

The weighted average remaining contractual term was approximately 7.0 years for options outstanding as of March 31, 2019.

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 options granted during fiscal 2014, $4.58 for options granted during fiscal 2015, $2.13 for options granted during fiscal 2016, $3.18 for options granted during fiscal 2017 and $3.63 for options granted in fiscal 2018. The fair value for grants made in fiscal 2017 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise price range from $17.43 to $18.39, a term of seven years, a volatility of 14.37%, an interest rate of 2.22% and a yield of 0.69%. The fair value for grants made in fiscal 2018 was estimated on the date of grant using the Black-Scholes pricing model with the following assumptions: an exercise and fair value based on the grant date market value price of $18.46, a term of seven years, a volatility rate of 15.9%, an interest rate of 2.82% and a yield rate of 1.08%.

During the three and six months ended March 31, 2019, $127,000 and $277,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP. During the three and six months ended March 31, 2018, $102,000 and $239,000, respectively, was recognized in compensation expense for options granted pursuant to the 2008 Option Plan and the 2014 SIP.

At March 31, 2019, there was approximately $1.1 million in additional compensation expense to be recognized for awarded options which remained outstanding and unvested at such date. The weighted average period over which this expense will be recognized is approximately 2.2 years.

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COMMITMENTS AND CONTINGENT LIABILITIES

6 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENT LIABILITIES

12. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2019, the Company had $58.2 million in outstanding commitments to originate loans with market interest rates ranging from 6.00% to 6.75%. At September 30, 2018, the Company had $40.4 million in outstanding commitments to originate loans with market interest rates ranging from 4.25% to 6.25%. The aggregate undisbursed portion of loans-in-process amounted to $70.5 million at March 31, 2019 and $54.5 million at September 30, 2018.

The Company also had commitments under unused lines of credit of $69.7 million as of March 31, 2019 and $51.9 million as of September 30, 2018 and letters of credit outstanding of $1.6 million as of March 31, 2019 and $1.6 million as of September 30, 2018.

Among the Company’s contingent liabilities are exposures to limited recourse arrangements with respect to the Company’s sales of whole loans and participation interests. At March 31, 2019, the exposure, which represents a portion of credit risk associated with the interests sold, amounted to $1.5 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

6 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENT

13. FAIR VALUE MEASUREMENT

The fair value estimates presented herein are based on pertinent information available to management as of March 31, 2019 and September 30, 2018, 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 and liabilities as of March 31, 2019 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	$	-	$	24,822	$	-	$	24,822
State and political subdivisions		-		22,793		-		22,793
Mortgage-backed securities - U.S. Government agencies		-		305,717		-		305,717
Corporate bonds		-		92,834		-		92,834
Equity securities		72		-		-		72
Total	$	72	$	446,166	$	-	$	446,238
Liabilities
Interest rate swap contracts	$	-	$	4,141	$	-	$	4,141
Total	$	-	$	4,141	$	-	$	4,141

Those assets as of September 30, 2018 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	$	-	$	24,171	$	-	$	24,171
State and political subdivisions		-		21,536		-		21,536
Mortgage-backed securities - U.S. Government agencies		-		187,360		-		187,360
Corporate bonds		-		73,083		-		73,083
FHLMC preferred stock		37		-		-		37
Interest rate swap contracts		-		225		-		225
Total	$	37	$	306,375	$	-	$	306,412

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 comparables 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 of approximately $16.1 million as of March 31, 2019.

Other 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 March 31, 2019
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,073	$	16,073
Other real estate owned		-		-		423		423
Total	$	-	$	-	$	16,496	$	16,496

	At September 30, 2018
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,048	$	16,048
Other real estate owned		-		-		1,026		1,026
Total	$	-	$	-	$	17,074	$	17,074

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

	At March 31, 2019
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,073	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	423	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2018
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,048	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	1,026	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	18% discount

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

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

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

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

					Fair Value Measurements at
					March 31, 2019
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	50,593	$	50,593	$	50,593	$	-	$	-
Certificates of deposit		2,351		2,351		2,351		-		-
Investment and mortgage-backed securities available for sale		446,166		446,166		-		446,166		-
Equity securities		72		72		72
Investment and mortgage-backed securities held to maturity		57,361		56,159		-		56,159		-
Loans receivable, net		581,555		578,091		-		-		578,091
Accrued interest receivable		4,314		4,314		4,314		-		-
Restricted bank stock		10,383		10,383		10,383		-		-
Bank owned life insurance		28,996		28,996		28,996		-		-
Liabilities:
Checking accounts		76,506		76,506		76,506		-		-
Money market deposit accounts		67,346		67,346		67,346		-		-
Passbook, club and statement savings accounts		87,383		87,383		87,383		-		-
Certificates of deposit		594,264		605,324		-		-		605,324
Advances from FHLB short-term		25,500		25,500		25,500				-
Advances from FHLB long-term		199,594		201,289		-		-		201,289
Accrued interest payable		2,814		2,814		2,814		-		-
Advances from borrowers for taxes and insurance		2,260		2,260		2,260		-		-
Interest rate swap contracts		4141		4141		-		4141		-

					Fair Value Measurements at
					September 30, 2018
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	48,171	$	48,171	$	48,171	$	-	$	-
Certificates of deposit		1,604		1,604		1,604		-		-
Investment and mortgage-backed securities available for sale		306,187		306,187		37		306,150		-
Investment and mortgage-backed securities held to maturity		59,852		55,927		-		55,927		-
Loans receivable, net		602,932		598,596		-		-		598,596
Accrued interest receivable		3,825		3,825		3,825		-		-
Restricted bank stock		7,585		7,585		7,585		-		-
Interest rate swap contracts		225		225		-		225		-
Bank owned life insurance		28,691		28,691		28,691		-		-
Liabilities:
Checking accounts		62,886		62,886		62,886		-		-
Money market deposit accounts		60,686		60,686		60,686		-		-
Passbook, club and statement savings accounts		96,866		96,866		96,866		-		-
Certificates of deposit		563,820		569,375		-		-		569,375
Advances from FHLB -short-term		10,000		10,000		10,000		-		-
Advances from FHLB -long-term		144,683		141,116		-		-		141,116
Accrued interest payable		3,232		3,232		3,232		-		-
Advances from borrowers for taxes and insurance		2,083		2,083		2,083		-		-

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—On a prospective basis, the Company implemented changes to the measurement of the fair value of financial instruments using an exit price notion for disclosure purposes in the financial statements.  The September 30, 2018, fair value of each class of financial instruments disclosure did not utilize the exit price notion when measuring fair value and, therefore, would not be comparable to the March 31, 2019 disclosure.  The Company estimated the fair value based on guidance from ASC 820-10, Fair Value Measurements, which defines fair value as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  There is no active observable market for sale information on community bank loans and, thus, Level 3 fair value procedures were utilized, primarily in the use of present value techniques incorporating assumptions that market participants would use in estimating fair values.

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

Restricted Bank (FHLB & ACBB) Stock—Although FHLB and ACBB (Atlantic Community Bankers Bank) stock is an equity interest in the respective banks, 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 and is classified within Level 2 of the fair value hierarchy.

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 estimated using a discounted cash flow calculation that applies 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 estimated based on market rates currently offered for advances with similar remaining maturities.

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 Company’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 Company or the borrower, they only have value to the Company 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

6 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND OTHER INTANGIBLE ASSETS

14. 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 October 1,		Additions/					Balance March 31,		Amortization
	2018		Adjustments		Amortization			2019		Period
Goodwill	$	6,102	$	-	$	-		$	6,102
Core deposit intangible		571		-		(63	)		508	10 years
	$	6,673	$	-	$	(63	)	$	6,610

As of March 31, 2019, the current fiscal year and the future fiscal periods amortization expense for the core deposit intangible is:

	(In Thousands)
2019	$	60
2020		108
2021		93
2022		78
2023		64
Thereafter		105
Total	$	508

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation – The accompanying unaudited consolidated financial statements were prepared pursuant to the rules and regulations of the U. S. Securities and Exchange Commission (“SEC”) for interim information and therefore do not include all the information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, all normal recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the financial statements have been included. The results for the three and six months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending September 30, 2019, 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, 2018. The significant accounting policies followed in the presentation of interim financial results are the same as those followed on an annual basis. These policies are presented on pages 84 through 88 of the Annual Report on Form 10-K for the year ended September 30, 2018.

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, deferred income taxes, other-than-temporary impairment, and the fair value measurement for financial instruments. Actual results could differ from those estimates.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Effective October 1, 2018, the Company adopted ASU 2014-09 Revenue from Contracts with Customers – Topic 606 and all subsequent ASUs that modified ASC 606. The Company has elected to apply the standard utilizing the modified retrospective approach with a cumulative effect of adoption for the impact from uncompleted contracts at the date of adoption. The adoption of this guidance did not result in a change to the accounting for any of the in-scope revenue streams; as such, no cumulative effect adjustments were recorded.

Management determined that the primary sources of revenue emanating from interest and dividend income on loans and securities along with noninterest revenue resulting from investment security gains, loan servicing, gains on the sale of loans, commitment fees, fees from financial guarantees, certain credit cards fees, and income on bank-owned life insurance are not within the scope of ASC 606. As a result, no changes were made during the period related to these sources of revenue, which cumulatively comprise 98 percent of the total revenue of the Company. Services within the scope of ASC 606 include income from service charges on deposit accounts, other service income, ATM fees and gain on sale of OREO, net. For these accounts, fees are related to specific customer transactions and are attributable to specific performance obligations of the Bank where the revenue is recognized at a defined point in time, completion of the requested service/transaction.

Effective October 1, 2018, the Company adopted ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. This Update applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. Among other things, this Update (a) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (b) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (c) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (d) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (e) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (f) requires 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 (g) 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. The adoption of this Update did not have a significant impact on the Company’s financial statements.

Recent Accounting Pronouncements

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 one percent increase in assets and liabilities. The Company also anticipates additional disclosures to be provided at adoption.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which changes the impairment model for most financial assets. This Update is intended to improve financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by financial institutions and other organizations. The underlying premise of the Update is that financial assets measured at amortized cost should be presented at the net amount expected to be collected, through an allowance for credit losses that is deducted from the amortized cost basis. The allowance for credit losses should reflect management’s current estimate of credit losses that are expected to occur over the remaining life of a financial asset. The income statement will be affected for the measurement of credit losses for newly recognized financial assets, as well as the expected increases or decreases of expected credit losses that have taken place during the period. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019, and early adoption is permitted for annual and interim periods beginning after December 15, 2018. With certain exceptions, transition to the new requirements will be through a cumulative effect adjustment to opening retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We expect to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which the new standard is effective, but cannot yet determine the magnitude of any such one-time adjustment or the overall impact of the new guidance on the consolidated financial statements.

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. 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 and results of operations.

In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718), which simplified the accounting for nonemployee share-based payment transactions. The amendments in this update expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The amendments in this Update improve the following areas of nonemployee share-based payment accounting: (a) the overall measurement objective, (b) the measurement date, (c) awards with performance conditions, (d) classification reassessment of certain equity-classified awards, (e) calculated value (nonpublic entities only), and (f) intrinsic value (nonpublic entities only). The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. 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. 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 August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes the Disclosure Requirements for Fair Value Measurements. The Update removes the requirement to disclose the amount of and reasons for transfers between Level I and Level II of the fair value hierarchy; the policy for timing of transfers between levels; and the valuation processes for Level III fair value measurements. The Update requires disclosure of changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level III fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level III fair value measurements. This Update is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. 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 October 2018, the FASB issued ASU 2018-16, Derivatives and Hedging (Topic 815). The amendments in this Update permit use of the Overnight Index Swap (OIS) rate based on the Secured Overnight Financing Rate (SOFR) as a U.S. benchmark interest rate for hedge accounting purposes under Topic 815, in addition to the interest rates on direct Treasury obligations of the U.S. government, the London Interbank Offered Rate (LIBOR) swap rate, the OIS rate based on the Fed Funds Effective Rate, and the Securities Industry and Financial Markets Association (SIFMA) Municipal Swap Rate. For entities that have not already adopted Update 2017-12, the amendments in this Update are required to be adopted concurrently with the amendments in Update 2017-12. For public business entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities that already have adopted the amendments in Update 2017-12, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted in any interim period upon issuance of this Update if an entity already has adopted Update 2017-12. The Company is currently evaluating the impact the adoption of the standard will have on the Company’s financial position or results of operations.

In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements, which addressed issues lessors sometimes encounter. Specifically addressed in this Update were issues related to 1) determining the fair value of the underlying asset by the lessor that are not manufacturers or dealers (generally financial institutions and captive finance companies), and 2) lessors that are depository and lending institutions should classify principal and payments received under sales-type and direct financing leases within investing activities in the cash flow statement. The ASU also exempts both lessees and lessors from having to provide the interim disclosures required by ASC 250-10-50-3 in the fiscal year in which a company adopts the new leases standard. The amendments addressing the two lessor accounting issues are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the effective date is for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. This Update is not expected to have a significant impact on the Company’s financial statements.

In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments – Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which affects a variety of topics in the Codification and applies to all reporting entities within the scope of the affected accounting guidance. 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)

6 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of basic and diluted earnings per share

	Three Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	2,340	$	2,340	$	2,157	$	2,157
Weighted average shares outstanding		8,777,252		8,777,252		8,851,805		8,851,805
Effect of common stock equivalents		-		144,309		-		326,295
Adjusted weighted average shares used in earnings per share computation		8,777,252		8,921,561		8,851,805		9,178,100
Earnings per share - basic and diluted	$	0.27	$	0.26	$	0.24	$	0.24

	Six Months Ended March 31,
	2019				2018
	Basic		Diluted		Basic		Diluted
	(Dollars in Thousands, Except Share and Per Share Data)
Net income	$	4,314	$	4,314	$	2,191	$	2,191
Weighted average shares outstanding		8,790,822		8,790,822		8,853,479		8,853,479
Effect of common stock equivalents		-		131,262		-		351,436
Adjusted weighted average shares used in earnings per share computation		8,790,822		8,922,084		8,853,479		9,204,915
Earnings  per share - basic and diluted	$	0.49	$	0.48	$	0.25	$	0.24

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ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)

6 Months Ended

Mar. 31, 2019

Accumulated Other Comprehensive Income [Abstract]

Schedule of changes in accumulated other comprehensive (loss) income

	Three Months Ended March 31,									Three Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss)  on interest rate swaps (a)			Total accumulated  other comprehensive  (loss) income			Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)		Total accumulated other comprehensive  (loss) income
Beginning balance, January 1	$	(5,615	)	$	(418	)	$	(6,033	)	$	(2,125	)	$	360	$	(1,765	)
Other comprehensive (loss) income before reclassifications		3,572			(1,947	)		1,625			(2,840	)		150		(2,690	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,965	)		510		(4,455	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)		-			-		-
Reclassification for net gains recorded in net income		(92	)		-			(92	)		-			-		-
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

(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 for the periods presented:

	Six Months Ended March 31,									Six Months Ended March 31,
	2019			2019			2019			2018			2018		2018
	(Dollars in Thousands)
	Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)			Total accumulated  other comprehensive (loss) income			Unrealized gain (loss)  on AFS securities (a)			Unrealized gain (loss) on interest rate  swaps (a)		Total accumulated  other comprehensive  (loss) income
Beginning balance, October 1	$	(8,320	)	$	166		$	(8,154	)	$	(1,091	)	$	331	$	(760	)
Other comprehensive (loss) income before reclassification		6,277			(2,531	)		3,746			(3,571	)		179		(3,392	)
Total		(2,043	)		(2,365	)		(4,408	)		(4,662	)		510		(4,152	)
Reclassification from adoption of ASU 2016-01		(25	)		-			(25	)
Reclassification for net gains recorded in net income		(92	)		-			(92	)		(303	)		-		(303	)
Ending Balance, March 31	$	(2,160	)	$	(2,365	)	$	(4,525	)	$	(4,965	)	$	510	$	(4,455	)

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

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INVESTMENT AND MORTGAGE-BACKED SECURITIES (Tables)

6 Months Ended

Mar. 31, 2019

Investments, Debt and Equity Securities [Abstract]

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

	March 31, 2019
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,253	$	-	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		307,219		1,859		(3,361	)		305,717
State and political subdivisions		23,206		742		(1,155	)		22,793
Corporate bonds		93,229		436		(831	)		92,834
Total securities available for sale	$	448,907	$	3,037	$	(5,778	)	$	446,166
Securities Held to Maturity:
U.S. government and agency obligations	$	31,500	$	127	$	(1,669	)	$	29,958
Mortgage-backed securities - U.S. government agencies		5,337		166		(53	)		5,450
State and political subdivisions		20,524		356		(129	)		20,751
Total securities held to maturity	$	57,361	$	649	$	(1,851	)	$	56,159

	March 31, 2019
	Amortized		Gross		Gross		Fair
	Cost		Gains		Losses		Value
	(Dollars in Thousands)
Equity securities
FHLMC preferred stock	$	6	$	66	$	-	$	72
Total equity securities	$	6	$	66			$	72

	September 30, 2018
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(Dollars in Thousands)
Securities Available for Sale:
U.S. government and agency obligations	$	25,562	$	-	$	(1,391	)	$	24,171
State and political subdivisions		22,078		-		(542	)		21,536
Mortgage-backed securities - U.S. government agencies		193,451		77		(6,168	)		187,360
Corporate bonds		75,622		-		(2,539	)		73,083
Total debt securities available for sale		316,713		77		(10,640	)		306,150
FHLMC preferred stock		6		31		-			37
Total securities available for sale	$	316,719	$	108	$	(10,640	)	$	306,187
Securities Held to Maturity:
U.S. government and agency obligations	$	33,500	$	85	$	(3,311	)	$	30,274
State and political subdivisions		20,574		2		(696	)		19,880
Mortgage-backed securities - U.S. government agencies		5,778		148		(153	)		5,773
Total securities held to maturity	$	59,852	$	235	$	(4,160	)	$	55,927

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

The following table shows the gross unrealized losses and related fair values of the Company’s investment and mortgage-backed securities, aggregated by investment category and length of time that individual securities had been in a continuous loss position as of March 31, 2019:

	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	$	-		$	-	$	(431	)	$	24,822	$	(431	)	$	24,822
Mortgage-backed securities - U.S. government agencies		(233	)		31,387		(3,128	)		106,545		(3,361	)		137,932
State and political subdivisions		(1,155	)		22,793		-			-		(1,155	)		22,793
Corporate bonds		(123	)		15,120		(708	)		37,520		(831	)		52,640
Total securities available for sale	$	(1,511	)	$	69,300	$	(4,267	)	$	168,887	$	(5,778	)	$	238,187
Securities Held to Maturity:
U.S. government and agency obligations	$	(1,669	)	$	28,831	$	-		$	-	$	(1,669	)	$	28,831
Mortgage-backed securities - U.S. government agencies		-			-		(53	)		2,034		(53	)		2,034
State and political subdivisions		-			-		(129	)		6,944		(129	)		6,944
Total securities held to maturity	$	(1,669	)	$	28,831	$	(182	)	$	8,978	$	(1,851	)	$	37,809
Total	$	(3,180	)	$	98,131	$	(4,449	)	$	177,865	$	(7,629	)	$	275,996

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 as of September 30, 2018:

	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	$	(89	)	$	4,479	$	(1,302	)	$	19,692	$	(1,391	)	$	24,171
Mortgage-backed securities -
U.S. government agencies		(1,821	)		92,851		(4,347	)		86,268		(6,168	)		179,119
State and political subdivisions		(542	)		21,536		-			-		(542	)		21,536
Corporate debt securities		(1,719	)		58,753		(820	)		14,330		(2,539	)		73,083
Total debt securities available for sale	$	(4,171	)	$	177,619	$	(6,469	)	$	120,290	$	(10,640	)	$	297,909
Securities Held to Maturity:
U.S. government and agency obligations	$	-		$	-	$	(3,311	)	$	27,190	$	(3,311	)	$	27,190
Mortgage-backed securities -
U.S. government agencies		(106	)		2,630		(46	)		930		(152	)		3,560
State and political subdivisions		(234	)		11,238		(463	)		6,618		(697	)		17,856
Total securities held to maturity	$	(340	)	$	13,868	$	(3,820	)	$	34,738	$	(4,160	)	$	48,606
Total	$	(4,511	)	$	191,487	$	(10,289	)	$	155,028	$	(14,800	)	$	346,515

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

	March 31, 2019
	Held to Maturity				Available for Sale
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(Dollars in Thousands)
Due after one through five years	$	1,704	$	1,715	$	5,256	$	5,168
Due after five through ten years		23,736		23,712		7,511		7,434
Due after ten years		26,584		25,282		128,921		127,847
Total	$	52,024	$	50,709	$	141,688	$	140,449

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LOANS RECEIVABLE (Tables)

6 Months Ended

Mar. 31, 2019

Receivables [Abstract]

Schedule of loans receivable

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
One-to-four family residential	$	299,323		$	324,865
Multi-family residential		35,094			34,355
Commercial real estate		128,252			119,511
Construction and land development		168,465			160,228
Loans to financial institutions		6,000			6,000
Commercial business		20,934			17,792
Leases		1,139			1,687
Consumer		891			953
Total loans		660,098			665,391
Undisbursed portion of loans-in-process		(70,462	)		(54,474	)
Deferred loan fees (net)		(2,854	)		(2,818	)
Allowance for loan losses		(5,227	)		(5,167	)
Net loans	$	581,555		$	602,932

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

The following table summarizes by loan segment the balance in the allowance for loan losses and the loans individually and collectively evaluated for impairment by loan segment at March 31, 2019:

	One- to- four family residential		Multi- family residential		Commercial  real estate		Construction and land  development		Loans to financial institutions		Commercial Business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,314		385		1,342		1,370		68		235		13		20		480		5,227
Total ending allowance balance	$	1,314	$	385	$	1,342	$	1,370	$	68	$	235	$	13	$	20	$	480	$	5,227
Loans:
Individually evaluated for impairment	$	4,830	$	287	$	2,196	$	8,750	$	-	$	-	$	-	$	10			$	16,073
Collectively evaluated for impairment		294,493		34,807		126,056		159,715		6,000		20,934		1,139		881				644,025
Total loans	$	299,323	$	35,094	$	128,252	$	168,465	$	6,000	$	20,934	$	1,139	$	891			$	660,098

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, 2018:

	One- to- four family residential		Multi- family residential		Commercial  real estate		Construction  and land development		Loans to  financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
		(Dollars in Thousands)
Allowance for loan losses:
Individually evaluated for impairment	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Collectively evaluated for impairment		1,343		347		1,154		1,554		64		187		18		18		482		5,167
Total ending allowance balance	$	1,343	$	347	$	1,154	$	1,554	$	64	$	187	$	18	$	18	$	482	$	5,167
Loans:
Individually evaluated for impairment	$	5,081	$	298	$	1,919	$	8,750	$	-	$	-	$	-	$	-			$	16,048
Collectively evaluated for impairment		319,784		34,057		117,592		151,478		6,000		17,792		1,687		953				649,343
Total loans	$	324,865	$	34,355	$	119,511	$	160,228	$	6,000	$	17,792	$	1,687	$	953			$	665,391

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

The following table presents impaired loans by class as of March 31, 2019, segregated by those for which a specific allowance was required and those for which a specific allowance was not required.

					Impaired
					Loans with
	Impaired Loans with				No Specific
	Specific Allowance				Allowance		Total Impaired Loans
	(Dollars in Thousands)
									Unpaid
	Recorded		Related		Recorded		Recorded		Principal
	Investment		Allowance		Investment		Investment		Balance
One-to-four family residential	$	-	$	-	$	4,830	$	4,830	$	5,178
Multi-family residential		-		-		287		287		287
Commercial real estate		-		-		2,196		2,196		2,357
Construction and land development		-		-		8,750		8,750		11,131
Consumer		-		-		10		10		10
Total impaired loans	$	-	$	-	$	16,073	$	16,073	$	18,963

The following table presents impaired loans by class as of September 30, 2018, 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	$	-	$	-	$	5,081	$	5,081	$	5,432
Multi-family		-		-		298		298		298
Commercial real estate		-		-		1,919		1,919		2,057
Construction and land development		-		-		8,750		8,750		11,131
Total impaired loans	$	-	$	-	$	16,048	$	16,048	$	18,918

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

	Three Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized  on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	4,952	$	21	$	5
Multi-family residential		290		5		-
Commercial real estate		2,202		10		1
Construction and land development		8,752		-		-
Consumer		10		-		-
Total impaired loans	$	16,205	$	36	$	6

	Three Months Ended March 31, 2018
	Average  Recorded  Investment		Income Recognized  on Accrual Basis		Income  Recognized on  Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	9,777	$	43	$	-
Multi-family residential		311		5		-
Commercial real estate		3,316		29		-
Construction and land development		8,744		-		-
Consumer		10		-		-
Total impaired loans	$	22,158	$	77	$	-

	Six Months Ended March 31, 2019
	Average Recorded Investment		Income Recognized  on Accrual Basis		Income  Recognized on  Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	5,055	$	44	$	10
Multi-family residential		293		10		-
Commercial real estate		2,133		20		2
Construction and land development		8,752		-		-
Consumer		8		-		-
Total impaired loans	$	16,242	$	74	$	12

	Six Months Ended March 31, 2018
	Average Recorded Investment		Income Recognized on Accrual Basis		Income Recognized on Cash Basis
	(Dollars in Thousands)
One-to-four family residential	$	8,521	$	77	$	4
Multi-family residential		316		11		-
Commercial real estate		2,942		58		-
Construction and land development		8,879		-		-
Consumer		10		-		-
Total impaired loans	$	20,668	$	146	$	4

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

	March 31, 2019
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	291,751	$	2,742	$	4,830	$	299,323
Multi-family residential		34,481		326		287		35,094
Commercial real estate		121,958		4,098		2,196		128,252
Construction and land development		159,715		-		8,750		168,465
Loans to financial institutions		6,000		-		-		6,000
Commercial business		20,934		-		-		20,934
Total loans	$	634,839	$	7,166	$	16,063	$	658,068

	September 30, 2018
			Special				Total
	Pass		Mention		Substandard		Loans
	(Dollars in Thousands)
One-to-four family residential	$	317,033	$	2,751	$	5,081	$	324,865
Multi-family residential		34,057		-		298		34,355
Commercial real estate		115,670		1,922		1,919		119,511
Construction and land development		151,478		-		8,750		160,228
Loans to financial institutions		6,000		-		-		6,000
Commercial business		17,792		-		-		17,792
Total loans	$	642,030	$	4,673	$	16,048	$	662,751

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

	March 31, 2019
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	296,034	$	3,289	$	299,323
Leases		1,139		-		1,139
Consumer		891		-		891
Total loans	$	298,064	$	3,289	$	301,353

	September 30, 2018
			Non-		Total
	Performing		Performing		Loans
	(Dollars in Thousands)
One-to-four family residential	$	321,853	$	3,012	$	324,865
Leases		1,687		-		1,687
Consumer		953		-		953
Total loans	$	324,493	$	3,012	$	327,505

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

	March 31, 2019
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	295,160	$	993	$	3,170	$	4,163	$	299,323	$	3,289	$	-
Multi-family residential		34,934		160		-		160		35,094		-		-
Commercial real estate		126,777		-		1,475		1,475		128,252		1,475		-
Construction and land development		159,715		-		8,750		8,750		168,465		8,750		-
Financial institutions		6,000		-		-		-		6,000		-		-
Commercial business		20,934		-		-		-		20,934		-		-
Leases		1,139		-		-		-		1,139		-		-
Consumer		783		108		-		108		891		-		-
Total loans	$	645,442	$	1,261	$	13,395	$	14,656	$	660,098	$	13,514	$	-

	September 30, 2018
													90 Days+
			30-89 Days		90 Days +		Total		Total		Non-		Past Due
	Current		Past Due		Past Due		Past Due		Loans		Accrual		and Accruing
	(Dollars in Thousands)
One-to-four family residential	$	321,749	$	1,037	$	2,079	$	3,116	$	324,865	$	3,012	$	-
Multi-family residential		34,355		-		-		-		34,355		-		-
Commercial real estate		117,335		722		1,454		2,176		119,511		1,627		-
Construction and land development		151,478		-		8,750		8,750		160,228		8,750		-
Commercial business		17,792		-		-		-		17,792		-		-
Loans to financial institutions		6,000		-		-		-		6,000		-		-
Leases		1,687		-		-		-		1,687		-		-
Consumer		837		116		-		116		953		-		-
Total loans	$	651,233	$	1,875	$	12,283	$	14,158	$	665,391	$	13,389	$	-

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

	Three Months Ended March 31, 2019
	One- to  four-family  residential			Multi-  family  residential		Commercial  real estate		Construction  and land  development			Financial  institutions		Commercial  business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2018	$	1,427		$	372	$	1,147	$	1,445		$	67	$	193	$	16		$	13	$	487		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(173	)		13		195		(75	)		1		42		(3	)		7		(7	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

	Six Months Ended March  31, 2019
	One- to four-family residential			Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial  business		Leases			Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at September 30, 2018	$	1,343		$	347	$	1,154	$	1,554		$	64	$	187	$	18		$	18	$	482		$	5,167
Charge-offs		-			-		-		-			-		-		-			-		-			-
Recoveries		60			-		-		-			-		-		-			-		-			60
Provision		(89	)		38		188		(184	)		4		48		(5	)		2		(2	)		-
ALLL balance at March 31, 2019	$	1,314		$	385	$	1,342	$	1,370		$	68	$	235	$	13		$	20	$	480		$	5,227

	Three Months Ended March 31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate		Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated			Total
	(Dollars in Thousands)
ALLL balance at December 31, 2017	$	1,270	$	158	$	1,064	$	1,621		$	-	$	26	$	20	$	24	$	493		$	4,676
Charge-offs		-		-		-		(12	)		-		-		-		-		-			(12	)
Recoveries		27		-		-		-			-		-		-		-		-			27
Provision		11		47		19		(144	)		62		80		9		73		(7	)		150
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083	$	1,465		$	62	$	106	$	29	$	97	$	486		$	4,841

	Six Months Ended March  31, 2018
	One- to four-family residential		Multi- family residential		Commercial real estate			Construction and land development			Financial institutions		Commercial business		Leases		Consumer		Unallocated		Total
	(Dollars in Thousands)
ALLL balance at September 30, 2017	$	1,241	$	205	$	1,201		$	1,358		$	-	$	4	$	23	$	24	$	410	$	4,466
Charge-offs		-		-		-			(12	)		-		-		-		-		-		(12	)
Recoveries		27		-		-			-			-		-		-		-		-		27
Provision		40		-		(118	)		119			62		102		6		73		76		360
ALLL balance at March 31, 2018	$	1,308	$	205	$	1,083		$	1,465		$	62	$	106	$	29	$	97	$	486	$	4,841

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DEPOSITS (Tables)

6 Months Ended

Mar. 31, 2019

Deposits [Abstract]

Schedule of major classifications of deposits

	March 31,					September 30,
	2019					2018
	Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Money market deposit accounts	$	67,346		8.2	%	$	66,120		8.4	%
Interest-bearing checking accounts		64,156		7.7			49,209		6.3
Non interest-bearing checking accounts		12,350		1.5			13,620		1.7
Passbook, club and statement savings		87,383		10.6			91,489		11.7
Certificates maturing in six months or less		352,331		42.7			301,184		38.4
Certificates maturing in more than six months		241,933		29.3			262,636		33.5
Total	$	825,499		100.0	%	$	784,258		100.0	%

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ADVANCES FROM FEDERAL HOME LOAN BANK - SHORT TERM (Tables)

6 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of short-term borrowings from the FHLB

						March 31,		September 30,
						2019		2018
Type	Maturity Date	Coupon			Call Date	Amount		Amount
						(Dollars in Thousands)
Fixed Rate - Repo Plus	12-Oct-18		2.31	%	Not Applicable	$	-	$	10,000
Weighted average rate			2.31	%
Fixed Rate - Repo Plus	1-Apr-19		2.70	%	Not Applicable	$	500	$	-
Fixed Rate - Repo Plus	15-Apr-19		2.71	%	Not Applicable		10,000		-
Fixed Rate - Repo Plus	17-Apr-19		2.70	%	Not Applicable		15,000		-
Weighted average rate			2.70	%		$	25,500	$	10,000

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ADVANCES FROM FEDERAL HOME LOAN BANK - LONG TERM (Tables)

6 Months Ended

Mar. 31, 2019

Advances from Federal Home Loan Banks [Abstract]

Schedule of collateral agreement with the FHLB

Lomg-term FHLB advances:
	Maturity range		Weighted average			Stated interest rate range						March 31,		September 30,
Description	from	to	interest rate			from			to			2019		2018
												(Dollars in Thousands)
Fixed Rate - Amortizing	1-Oct-18	30-Sep-20		1.53	%		1.53	%		1.53	%	$	940	$	1,639
Fixed Rate - Amortizing	1-Oct-20	30-Sep-21		2.69	%		1.94	%		2.83	%		18,851		23,288
Fixed Rate - Amortizing	1-Oct-21	30-Sep-22		2.80	%		1.99	%		3.05	%		10,299		11,848
Fixed Rate - Amortizing	1-Oct-22	30-Sep-23		2.88	%		1.94	%		3.11	%		7,746		8,550
Total				2.73	%							$	37,836	$	45,325
Fixed Rate - Advances	1-Oct-18	30-Sep-19		2.66	%		1.40	%		2.66	%	$	3,011	$	18,528
Fixed Rate - Advances	1-Oct-19	30-Sep-20		2.62	%		1.38	%		3.06	%		12,365		12,413
Fixed Rate - Advances	1-Oct-20	30-Sep-21		2.45	%		1.42	%		2.92	%		3,027		3,037
Fixed Rate - Advances	1-Oct-21	30-Sep-22		2.28	%		1.94	%		3.23	%		23,358		23,380
Fixed Rate - Advances	1-Oct-22	30-Sep-23		2.72	%		2.18	%		3.22	%		65,999		37,000
Fixed Rate - Advances	1-Oct-23	30-Sep-24		2.99	%		2.98	%		3.20	%		53,998		5,000
Total				2.73	%							$	161,758	$	99,358
				2.73	%					Total		$	199,594	$	144,683

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DERIVATIVES (Tables)

6 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate swap agreements and the terms

Below is a summary of the interest rate swap agreements and their terms as of March 31, 2019.

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Loss
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	(311	)
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(87	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(147	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(275	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(69	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(252	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(165	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(160	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Interest rate swap contract	90 Day wholesale funding		20,000		2.78	%	3 Mth Libor	11-Jan-24		(492	)
Interest rate swap contract	90 Day wholesale funding		15,000		2.75	%	3 Mth Libor	18-Jan-24		(345	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.66	%	3 Mth Libor	20-Feb-24		(491	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.56	%	3 Mth Libor	28-Feb-24		(377	)
Interest rate swap contract	30 Day wholesale funding		15,000		2.51	%	1 Mth Libor	15-Feb-24		(257	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.59	%	3 Mth Libor	13-Mar-24		(409	)
Interest rate swap contract	90 Day wholesale funding		25,000		2.51	%	3 Mth Libor	27-Mar-24		(314	)
Total									$	(4,151	)

Below is a summary of the interest rate swap agreements and their terms as of September 30, 2018.

	Hedged	Notional		Pay			Receive	Maturity	Unrealized
	Item	Amount		Rate			Rate	Date	Gain (Loss)
	(Dollars in thousands)
Interest rate swap contract	FHLB Advance	$	10,000		2.70	%	1 Mth Libor	10-Apr-25	$	35
Interest rate swap contract	State and political subdivision		1,705		3.06	%	3 Mth Libor	15-Feb-27		(19	)
Interest rate swap contract	State and political subdivision		2,825		3.06	%	3 Mth Libor	1-Apr-27		(31	)
Interest rate swap contract	State and political subdivision		5,000		3.07	%	3 Mth Libor	1-Jan-28		(57	)
Interest rate swap contract	State and political subdivision		1,235		3.07	%	3 Mth Libor	1-Mar-28		(14	)
Interest rate swap contract	State and political subdivision		4,500		3.07	%	3 Mth Libor	1-May-28		(52	)
Interest rate swap contract	State and political subdivision		3,305		3.05	%	3 Mth Libor	1-Feb-27		(32	)
Interest rate swap contract	State and political subdivision		3,000		3.06	%	3 Mth Libor	15-Oct-27		(32	)
Interest rate swap contract	Commercial loan		8,300		5.74	%	1 Mth Libor +250 bp	13-Jun-25		-
Interest rate swap contract	Commercial loan		1,100		4.10	%	1 Mth Libor +276 bp	1-Aug-26		-
Total									$	(202	)

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INCOME TAXES (Tables)

6 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of deferred income taxes

	March 31,			September 30,
	2019			2018
	(Dollars in Thousands)
Deferred tax assets:
Allowance for loan losses	$	1,428		$	1,445
Nonaccrual interest		619			312
Accrued vacation		4			29
Capital loss carryforward		356			356
Split dollar life insurance		8			10
Post-retirement benefits		77			85
Unrealized losses on available for sale securities		576			2,212
Unrealized losses on interest rate swaps		629			-
Deferred compensation		811			838
Goodwill		75			80
Other		50			55
Employee benefit plans		330			239
Total deferred tax assets		4,963			5,661
Valuation allowance		(356	)		(356	)
Total deferred tax assets, net of valuation allowance		4,607			5,305
Deferred tax liabilities:
Property		127			179
Unrealized gains on interest rate swaps		-			44
Purchase accounting adjustments		102			59
Deferred loan fees		266			368
Total deferred tax liabilities		495			650
Net deferred tax assets	$	4,112		$	4,655

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STOCK COMPENSATION PLANS (Tables)

6 Months Ended

Mar. 31, 2019

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

Schedule of summary of the non-vested stock award activity

	Six Months Ended March 31, 2019
	Number of Shares (1)			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2018		116,916		$	14.36
Granted		-			-
Forfeited		-			-
Vested		(44,024	)		13.38
Non-vested stock awards at the March 31, 2019		72,892		$	14.95

	Six Months Ended March 31, 2018
	Number of Shares			Weighted Average Grant Date Fair Value
Non-vested stock awards at October 1, 2017		142,594		$	12.79
Granted		26,500			18.46
Forfeited		4,636			11.91
Vested		(44,647	)		12.06
Non-vested stock awards at the March 31, 2018		129,083		$	14.17

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

	Six Months Ended  March 31, 2019
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2018		869,026		$	13.41
Granted		-			-
Exercised		(75,694	)		11.77
Forfeited		(6,000	)		12.23
Outstanding at  March 31, 2019		787,332		$	13.58
Exercisable at March 31, 2019		512,788		$	12.13

	Six Months Ended  March 31, 2018
	Number of Shares			Weighted Average Exercise Price
Outstanding at October 1, 2017		922,564		$	12.04
Granted		177,500			18.46
Exercised		(37,171	)		11.50
Forfeited		(12,234	)		11.90
Outstanding at March 31, 2018		1,050,659		$	13.15
Exercisable at March 31, 2018		595,385		$	11.53

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FAIR VALUE MEASUREMENT (Tables)

6 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of assets measured at fair value on recurring basis

Those assets and liabilities as of March 31, 2019 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	$	-	$	24,822	$	-	$	24,822
State and political subdivisions		-		22,793		-		22,793
Mortgage-backed securities - U.S. Government agencies		-		305,717		-		305,717
Corporate bonds		-		92,834		-		92,834
Equity securities		72		-		-		72
Total	$	72	$	446,166	$	-	$	446,238
Liabilities
Interest rate swap contracts	$	-	$	4,141	$	-	$	4,141
Total	$	-	$	4,141	$	-	$	4,141

Those assets as of September 30, 2018 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	$	-	$	24,171	$	-	$	24,171
State and political subdivisions		-		21,536		-		21,536
Mortgage-backed securities - U.S. Government agencies		-		187,360		-		187,360
Corporate bonds		-		73,083		-		73,083
FHLMC preferred stock		37		-		-		37
Interest rate swap contracts		-		225		-		225
Total	$	37	$	306,375	$	-	$	306,412

Schedule of summary of non-recurring fair value measurements

	At March 31, 2019
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,073	$	16,073
Other real estate owned		-		-		423		423
Total	$	-	$	-	$	16,496	$	16,496

	At September 30, 2018
	(Dollars in Thousands)
	Level 1		Level 2		Level 3		Total
Impaired loans	$	-	$	-	$	16,048	$	16,048
Other real estate owned		-		-		1,026		1,026
Total	$	-	$	-	$	17,074	$	17,074

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

	At March 31, 2019
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,073	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	423	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	10% discount

	At September 30, 2018
	(Dollars in Thousands)
			Valuation		Range/
	Fair Value		Technique	Unobservable Input	Weighted Ave.
Impaired loans	$	16,048	Property appraisals (1) (3)	Management discount for selling costs, property type and market volatility (2)	6% to 8% discount/ 6%
Other real estate owned	$	1,026	Property appraisals (1)(3)	Management discount for selling costs, property type and market volatility (2)	18% discount

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

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

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

Schedule of the estimated fair value amounts

					Fair Value Measurements at
					March 31, 2019
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	50,593	$	50,593	$	50,593	$	-	$	-
Certificates of deposit		2,351		2,351		2,351		-		-
Investment and mortgage-backed securities available for sale		446,166		446,166		-		446,166		-
Equity securities		72		72		72
Investment and mortgage-backed securities held to maturity		57,361		56,159		-		56,159		-
Loans receivable, net		581,555		578,091		-		-		578,091
Accrued interest receivable		4,314		4,314		4,314		-		-
Restricted bank stock		10,383		10,383		10,383		-		-
Bank owned life insurance		28,996		28,996		28,996		-		-
Liabilities:
Checking accounts		76,506		76,506		76,506		-		-
Money market deposit accounts		67,346		67,346		67,346		-		-
Passbook, club and statement savings accounts		87,383		87,383		87,383		-		-
Certificates of deposit		594,264		605,324		-		-		605,324
Advances from FHLB short-term		25,500		25,500		25,500				-
Advances from FHLB long-term		199,594		201,289		-		-		201,289
Accrued interest payable		2,814		2,814		2,814		-		-
Advances from borrowers for taxes and insurance		2,260		2,260		2,260		-		-
Interest rate swap contracts		4141		4141		-		4141		-

					Fair Value Measurements at
					September 30, 2018
	Carrying		Fair
	Amount		Value		(Level 1)		(Level 2)		(Level 3)
	(Dollars in Thousands)
Assets:
Cash and cash equivalents	$	48,171	$	48,171	$	48,171	$	-	$	-
Certificates of deposit		1,604		1,604		1,604		-		-
Investment and mortgage-backed securities available for sale		306,187		306,187		37		306,150		-
Investment and mortgage-backed securities held to maturity		59,852		55,927		-		55,927		-
Loans receivable, net		602,932		598,596		-		-		598,596
Accrued interest receivable		3,825		3,825		3,825		-		-
Restricted bank stock		7,585		7,585		7,585		-		-
Interest rate swap contracts		225		225		-		225		-
Bank owned life insurance		28,691		28,691		28,691		-		-
Liabilities:
Checking accounts		62,886		62,886		62,886		-		-
Money market deposit accounts		60,686		60,686		60,686		-		-
Passbook, club and statement savings accounts		96,866		96,866		96,866		-		-
Certificates of deposit		563,820		569,375		-		-		569,375
Advances from FHLB -short-term		10,000		10,000		10,000		-		-
Advances from FHLB -long-term		144,683		141,116		-		-		141,116
Accrued interest payable		3,232		3,232		3,232		-		-
Advances from borrowers for taxes and insurance		2,083		2,083		2,083		-		-

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

6 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

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

	Balance October 1,		Additions/					Balance March 31,		Amortization
	2018		Adjustments		Amortization			2019		Period
Goodwill	$	6,102	$	-	$	-		$	6,102
Core deposit intangible		571		-		(63	)		508	10 years
	$	6,673	$	-	$	(63	)	$	6,610

Schedule of future fiscal periods amortization expense for core deposit intangible

	(In Thousands)
2019	$	60
2020		108
2021		93
2022		78
2023		64
Thereafter		105
Total	$	508

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SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals)	6 Months Ended
	Mar. 31, 2019 Branch
Significant Accounting Policies [Line Items]
Number of full service branch offices	9
Number of banking offices	10
ASU 2016-02, Leases (Topic 842)
Significant Accounting Policies [Line Items]
Description of increase in assets and liabilities due to change in new accounting principle	less than a one percent
ASU 2014-09 Revenue from Contracts with Customers
Significant Accounting Policies [Line Items]
Percent of cumulatively total revenue	98.00%
Philadelphia (Philadelphia County)
Significant Accounting Policies [Line Items]
Number of full service branch offices	8
Drexel Hill, Delaware County, Pennsylvania
Significant Accounting Policies [Line Items]
Number of full service branch offices	1
Huntingdon Valley, Montgomery County
Significant Accounting Policies [Line Items]
Number of full service branch offices	1

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EARNINGS PER SHARE - Calculated basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Earnings per share - basic
Net income	$ 2,340	$ 2,157	$ 4,314	$ 2,191
Weighted average shares outstanding - basic	8,777,252	8,851,805	8,790,822	8,853,479
Effect of common stock equivalents - basic	0	0	0	0
Adjusted weighted average shares used in earnings per share computation - basic	8,777,252	8,851,805	8,790,822	8,853,479
Earnings per share - basic (in dollars per share)	$ 0.27	$ 0.24	$ 0.49	$ 0.25
Earnings per share - diluted
Net income (loss)	$ 2,340	$ 2,157	$ 4,314	$ 2,191
Weighted average shares outstanding - diluted	8,777,252	8,851,805	8,790,822	8,853,479
Effect of common stock equivalents - diluted	144,309	326,295	131,262	351,436
Adjusted weighted average shares used in earnings per share computation - diluted	8,921,561	9,178,100	8,922,084	9,204,915
Earnings per share - diluted (in dollars per share)	$ 0.26	$ 0.24	$ 0.48	$ 0.24

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EARNINGS PER SHARE (Detail Textuals) - shares	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Adjusted weighted average shares of common stock used in diluted earnings per share computation	584,832	873,159
Adjusted weighted average shares of common stock having exercise prices less than the current market value and are considered anti-dilutive	202,500	177,500

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ACCUMULATED OTHER COMPREHENSIVE LOSS - Changes in accumulated other comprehensive (loss) income by component net of tax (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance				$ (8,154)
Total		$ 1,533	$ (2,690)	3,654	$ (3,392)
Ending balance		(4,525)		(4,525)
Total accumulated other comprehensive income (loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance		(6,033)	(1,765)	(8,154)	(760)
Other comprehensive (loss) income before reclassification		1,625	(2,690)	3,746	(3,392)
Total		(4,408)	(4,455)	(4,408)	(4,152)
Reclassification from adoption of ASU 2016-01		(25)	0	(25)
Reclassification for net gains recorded in net income		(92)	0	(92)	(303)
Ending balance		(4,525)	(4,455)	(4,525)	(4,455)
Unrealized gain (loss) on AFS securities
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	[1]	(5,615)	(2,125)	(8,320)	(1,091)
Other comprehensive (loss) income before reclassification	[1]	3,572	(2,840)	6,277	(3,571)
Total	[1]	(2,043)	(4,965)	(2,043)	(4,662)
Reclassification from adoption of ASU 2016-01	[1]	(25)	0	(25)
Reclassification for net gains recorded in net income	[1]	(92)	0	(92)	(303)
Ending balance	[1]	(2,160)	(4,965)	(2,160)	(4,965)
Unrealized gain (loss) on interest rate swaps
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Beginning balance	[1]	(418)	360	166	331
Other comprehensive (loss) income before reclassification	[1]	(1,947)	150	(2,531)	179
Total	[1]	(2,365)	510	(2,365)	510
Reclassification from adoption of ASU 2016-01	[1]	0	0	0
Reclassification for net gains recorded in net income	[1]	0	0	0	0
Ending balance	[1]	$ (2,365)	$ 510	$ (2,365)	$ 510

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

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of investment and mortgage-backed securities, with gross unrealized gains and losses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Securities Available for Sale:
Equity securities, Amortized Cost	$ 6
Equity securities, Gross Unrealized Gains	66
Equity securities, Gross Unrealized Losses	0
Equity securities, Fair Value	72
Total securities available for sale, Amortized Cost	448,907	$ 316,719
Total securities available for sale, Gross Unrealized Gains		108
Total securities available for sale, Gross Unrealized Losses		(10,640)
Total securities available for sale, Fair Value	446,166	306,187
U.S. government and agency obligations
Securities Available for Sale:
Amortized Cost	25,253	25,562
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(431)	(1,391)
Fair Value	24,822	24,171
Mortgage-backed securities - U.S. government agencies
Securities Available for Sale:
Amortized Cost	307,219	193,451
Gross Unrealized Gains	1,859	77
Gross Unrealized Losses	(3,361)	(6,168)
Fair Value	305,717	187,360
State and political subdivisions
Securities Available for Sale:
Amortized Cost	23,206	22,078
Gross Unrealized Gains	742	0
Gross Unrealized Losses	(1,155)	(542)
Fair Value	22,793	21,536
Corporate bonds
Securities Available for Sale:
Amortized Cost	93,229	75,622
Gross Unrealized Gains	436	0
Gross Unrealized Losses	(831)	(2,539)
Fair Value	92,834	73,083
Total securities available for sale
Securities Available for Sale:
Total securities available for sale, Amortized Cost	448,907	316,713
Total securities available for sale, Gross Unrealized Gains	3,037	77
Total securities available for sale, Gross Unrealized Losses	(5,778)	(10,640)
Total securities available for sale, Fair Value	446,166	306,150
FHLMC preferred stock
Securities Available for Sale:
Equity securities, Amortized Cost	6	6
Equity securities, Gross Unrealized Gains	66	31
Equity securities, Gross Unrealized Losses	0	0
Equity securities, Fair Value	$ 72	$ 37

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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 1) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	$ 57,361	$ 59,852
Gross Unrealized Gains	649	235
Gross unrealized losses	(1,851)	(4,160)
Fair value	56,159	55,927
U.S. Government and agency obligations
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	31,500	33,500
Gross Unrealized Gains	127	85
Gross unrealized losses	(1,669)	(3,311)
Fair value	29,958	30,274
Mortgage-backed securities - U.S. government agencies
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	5,337	5,778
Gross Unrealized Gains	166	148
Gross unrealized losses	(53)	(153)
Fair value	5,450	5,773
State and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Amortized Cost	20,524	20,574
Gross Unrealized Gains	356	2
Gross unrealized losses	(129)	(696)
Fair value	$ 20,751	$ 19,880

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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 2) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	$ (1,511)	$ (4,171)
Less than 12 months - Fair value	69,300	177,619
More than 12 months - Gross Unrealized Losses	(4,267)	(6,469)
More than 12 months - Fair value	168,887	120,290
Gross Unrealized Losses - Total	(5,778)	(10,640)
Fair Value - Total	238,187	297,909
U.S. government and agency obligations
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	0	(89)
Less than 12 months - Fair value	0	4,479
More than 12 months - Gross Unrealized Losses	(431)	(1,302)
More than 12 months - Fair value	24,822	19,692
Gross Unrealized Losses - Total	(431)	(1,391)
Fair Value - Total	24,822	24,171
Mortgage-backed securities - U.S. government agencies
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(233)	(1,821)
Less than 12 months - Fair value	31,387	92,851
More than 12 months - Gross Unrealized Losses	(3,128)	(4,347)
More than 12 months - Fair value	106,545	86,268
Gross Unrealized Losses - Total	(3,361)	(6,168)
Fair Value - Total	137,932	179,119
State and political subdivisions
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(1,155)	(542)
Less than 12 months - Fair value	22,793	21,536
More than 12 months - Gross Unrealized Losses	0	0
More than 12 months - Fair value	0	0
Gross Unrealized Losses - Total	(1,155)	(542)
Fair Value - Total	22,793	21,536
Corporate bonds
Securities Available for Sale:
Less than 12 months - Gross Unrealized Losses	(123)	(1,719)
Less than 12 months - Fair value	15,120	58,753
More than 12 months - Gross Unrealized Losses	(708)	(820)
More than 12 months - Fair value	37,520	14,330
Gross Unrealized Losses - Total	(831)	(2,539)
Fair Value - Total	$ 52,640	$ 73,083

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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 3) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months - Gross Unrealized Losses	$ (1,669)	$ (340)
Less than 12 Months, Fair Value	28,831	13,868
More than 12 months - Gross Unrealized Losses	(182)	(3,820)
12 Months or More, Fair Value	8,978	34,738
Total - Gross Unrealized Losses	(1,851)	(4,160)
Total - Fair Value	37,809	48,606
U.S. Government and agency obligations
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months - Gross Unrealized Losses	(1,669)	0
Less than 12 Months, Fair Value	28,831	0
More than 12 months - Gross Unrealized Losses	0	(3,311)
12 Months or More, Fair Value	0	27,190
Total - Gross Unrealized Losses	(1,669)	(3,311)
Total - Fair Value	28,831	27,190
Mortgage-backed securities - U.S. government agencies
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months - Gross Unrealized Losses	0	(106)
Less than 12 Months, Fair Value	0	2,630
More than 12 months - Gross Unrealized Losses	(53)	(46)
12 Months or More, Fair Value	2,034	930
Total - Gross Unrealized Losses	(53)	(152)
Total - Fair Value	2,034	3,560
State and political subdivisions
Schedule of Held-to-maturity Securities [Line Items]
Less than 12 months - Gross Unrealized Losses	0	(234)
Less than 12 Months, Fair Value	0	11,238
More than 12 months - Gross Unrealized Losses	(129)	(463)
12 Months or More, Fair Value	6,944	6,618
Total - Gross Unrealized Losses	(129)	(697)
Total - Fair Value	$ 6,944	$ 17,856

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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 4) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Investments, Debt and Equity Securities [Abstract]
Less than 12 months - Gross Unrealized Losses	$ (3,180)	$ (4,511)
Fair Value, Less than 12 Months	98,131	191,487
More than 12 months - Gross Unrealized Losses	(4,449)	(10,289)
Fair Value, 12 Months or More	177,865	155,028
Gross Unrealized Losses -Total	(7,629)	(14,800)
Fair Value - Total	$ 275,996	$ 346,515

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of debt securities, by contractual maturity (Details 5) $ in Thousands	Mar. 31, 2019 USD ($)
Available for Sale, Amortized Cost
Due after one through five years	$ 5,256
Due after five through ten years	7,511
Due after ten years	128,921
Total	141,688
Available for Sale, Fair Value
Due after one through five years	5,168
Due after five through ten years	7,434
Due after ten years	127,847
Total	$ 140,449

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INVESTMENT AND MORTGAGE-BACKED SECURITIES - Amortized cost and fair value of debt securities, by contractual maturity (Details 6) $ in Thousands	Mar. 31, 2019 USD ($)
Held to Maturity - Amortized Cost
Due after one through five years	$ 1,704
Due after five through ten years	23,736
Due after ten years	26,584
Total	52,024
Held to Maturity - Fair Value
Due after one through five years	1,715
Due after five through ten years	23,712
Due after ten years	25,282
Total	$ 50,709

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INVESTMENT AND MORTGAGE-BACKED SECURITIES (Detail Textuals)	3 Months Ended	6 Months Ended
	Mar. 31, 2019 USD ($) Security	Mar. 31, 2019 USD ($) Security
Marketable Securities [Line Items]
Safekeeping account at the FHLB | $	$ 251,500,000	$ 251,500,000
Mortgage-back securities sold with an aggregate amortized cost | $	12,800,000	12,800,000
Agreegate gain of mortgage-back securities | $	117,000	117,000
Recognized net gains on equity securities | $	$ 0	$ 34,000
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	8	8
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	14	14
Mortgage-Backed Securities
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company	14	14
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	58	58
Corporate debt securities
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company	7	7
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	21	21
State and political subdivisions
Marketable Securities [Line Items]
Number of investment securities in debt obligations in the category of loss position less than 12 months held by company	7	7
Number of investment securities in debt obligations in the category of loss position more than 12 months held by company	5	5

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LOANS RECEIVABLE - Summary of Loans receivable (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	$ 660,098		$ 665,391
Undisbursed portion of loans-in-process	(70,462)		(54,474)
Deferred loan fees, net	(2,854)		(2,818)
Allowance for loan losses	(5,227)	$ (5,167)	(5,167)	$ (4,841)	$ (4,676)	$ (4,466)
Net loans	581,555		602,932
One-to-four family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	299,323		324,865
Allowance for loan losses	(1,314)	(1,427)	(1,343)	(1,308)	(1,270)	(1,241)
Multi-family residential
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	35,094		34,355
Allowance for loan losses	(385)	(372)	(347)	(205)	(158)	(205)
Commercial real estate
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	128,252		119,511
Allowance for loan losses	(1,342)	(1,147)	(1,154)	(1,083)	(1,064)	(1,201)
Construction and land development
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	168,465		160,228
Allowance for loan losses	(1,370)	(1,445)	(1,554)	(1,465)	(1,621)	(1,358)
Loans to financial institutions
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	6,000		6,000
Allowance for loan losses	(68)	(67)	(64)	(62)	0	0
Commercial business
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	20,934		17,792
Allowance for loan losses	(235)	(193)	(187)	(106)	(26)	(4)
Leases
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	1,139		1,687
Allowance for loan losses	(13)	(16)	(18)	(29)	(20)	(23)
Consumer
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total loans	891		953
Allowance for loan losses	$ (20)	$ (13)	$ (18)	$ (97)	$ (24)	$ (24)

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LOANS RECEIVABLE - Summary of loans individually evaluated for impairment by loan segment (Details 1) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017
Allowance for Loan Losses:
Individually evaluated for impairment	$ 0		$ 0
Collectively evaluated for impairment	5,227		5,167
Total ending allowance balance	5,227	$ 5,167	5,167	$ 4,841	$ 4,676	$ 4,466
Loans:
Individually evaluated for impairment	16,073		16,048
Collectively evaluated for impairment	644,025		649,343
Total loans	660,098		665,391
One-to-four family residential
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	1,314		1,343
Total ending allowance balance	1,314	1,427	1,343	1,308	1,270	1,241
Loans:
Individually evaluated for impairment	4,830		5,081
Collectively evaluated for impairment	294,493		319,784
Total loans	299,323		324,865
Multi-family residential
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	385		347
Total ending allowance balance	385	372	347	205	158	205
Loans:
Individually evaluated for impairment	287		298
Collectively evaluated for impairment	34,807		34,057
Total loans	35,094		34,355
Commercial real estate
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	1,342		1,154
Total ending allowance balance	1,342	1,147	1,154	1,083	1,064	1,201
Loans:
Individually evaluated for impairment	2,196		1,919
Collectively evaluated for impairment	126,056		117,592
Total loans	128,252		119,511
Construction and land development
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	1,370		1,554
Total ending allowance balance	1,370	1,445	1,554	1,465	1,621	1,358
Loans:
Individually evaluated for impairment	8,750		8,750
Collectively evaluated for impairment	159,715		151,478
Total loans	168,465		160,228
Loans to financial institutions
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	68		64
Total ending allowance balance	68	67	64	62	0	0
Loans:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	6,000		6,000
Total loans	6,000		6,000
Commercial business
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	235		187
Total ending allowance balance	235	193	187	106	26	4
Loans:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	20,934		17,792
Total loans	20,934		17,792
Leases
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	13		18
Total ending allowance balance	13	16	18	29	20	23
Loans:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	1,139		1,687
Total loans	1,139		1,687
Consumer
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	20		18
Total ending allowance balance	20	13	18	97	24	24
Loans:
Individually evaluated for impairment	10		0
Collectively evaluated for impairment	881		953
Total loans	891		953
Unallocated
Allowance for Loan Losses:
Individually evaluated for impairment	0		0
Collectively evaluated for impairment	480		482
Total ending allowance balance	$ 480	$ 487	$ 482	$ 486	$ 493	$ 410

XML

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	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	$ 0	$ 0
Impaired Loans with Specific Allowance - Related Allowance	0	0
Impaired Loans with No Specific Allowance - Recorded Investment	16,073	16,048
Total Impaired Loans - Recorded Investment	16,073	16,048
Total impaired loans - Unpaid Principal Balance	18,963	18,918
One-to-four family residential
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	0	0
Impaired Loans with Specific Allowance - Related Allowance	0	0
Impaired Loans with No Specific Allowance - Recorded Investment	4,830	5,081
Total Impaired Loans - Recorded Investment	4,830	5,081
Total impaired loans - Unpaid Principal Balance	5,178	5,432
Multi-family residential
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	0	0
Impaired Loans with Specific Allowance - Related Allowance	0	0
Impaired Loans with No Specific Allowance - Recorded Investment	287	298
Total Impaired Loans - Recorded Investment	287	298
Total impaired loans - Unpaid Principal Balance	287	298
Commercial real estate
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	0	0
Impaired Loans with Specific Allowance - Related Allowance	0	0
Impaired Loans with No Specific Allowance - Recorded Investment	2,196	1,919
Total Impaired Loans - Recorded Investment	2,196	1,919
Total impaired loans - Unpaid Principal Balance	2,357	2,057
Construction and land development
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	0	0
Impaired Loans with Specific Allowance - Related Allowance	0	0
Impaired Loans with No Specific Allowance - Recorded Investment	8,750	8,750
Total Impaired Loans - Recorded Investment	8,750	8,750
Total impaired loans - Unpaid Principal Balance	11,131	$ 11,131
Consumer
Financing Receivable, Impaired [Line Items]
Impaired Loans with Specific Allowance - Recorded Investment	0
Impaired Loans with Specific Allowance - Related Allowance	0
Impaired Loans with No Specific Allowance - Recorded Investment	10
Total Impaired Loans - Recorded Investment	10
Total impaired loans - Unpaid Principal Balance	$ 10

XML

LOANS RECEIVABLE - Average recorded investment in impaired loans and related interest income recognized (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	$ 16,205	$ 22,158	$ 16,242	$ 20,668
Income Recognized on Accrual Basis	36	77	74	146
Income Recognized on Cash Basis	6	0	12	4
One-to-four family residential
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	4,952	9,777	5,055	8,521
Income Recognized on Accrual Basis	21	43	44	77
Income Recognized on Cash Basis	5	0	10	4
Multi-family residential
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	290	311	293	316
Income Recognized on Accrual Basis	5	5	10	11
Income Recognized on Cash Basis	0	0	0	0
Commercial real estate
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	2,202	3,316	2,133	2,942
Income Recognized on Accrual Basis	10	29	20	58
Income Recognized on Cash Basis	1	0	2	0
Construction and land development
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	8,752	8,744	8,752	8,879
Income Recognized on Accrual Basis	0	0	0	0
Income Recognized on Cash Basis	0	0	0	0
Consumer
Financing Receivable, Impaired [Line Items]
Average Recorded Investment	10	10	8	10
Income Recognized on Accrual Basis	0	0	0	0
Income Recognized on Cash Basis	$ 0	$ 0	$ 0	$ 0

XML

LOANS RECEIVABLE - Summary of classes of loan portfolio in which formal risk weighting system is used (Details 4) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 660,098	$ 665,391
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	299,323	324,865
Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	35,094	34,355
Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	128,252	119,511
Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	168,465	160,228
Loans to financial institutions
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,000	6,000
Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,934	17,792
Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total Loans	658,068	662,751
Risk Rating System | Pass
Financing Receivable, Recorded Investment [Line Items]
Total Loans	634,839	642,030
Risk Rating System | Pass | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	291,751	317,033
Risk Rating System | Pass | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	34,481	34,057
Risk Rating System | Pass | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	121,958	115,670
Risk Rating System | Pass | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	159,715	151,478
Risk Rating System | Pass | Loans to financial institutions
Financing Receivable, Recorded Investment [Line Items]
Total Loans	6,000	6,000
Risk Rating System | Pass | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	20,934	17,792
Risk Rating System | Special Mention
Financing Receivable, Recorded Investment [Line Items]
Total Loans	7,166	4,673
Risk Rating System | Special Mention | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,742	2,751
Risk Rating System | Special Mention | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	326	0
Risk Rating System | Special Mention | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,098	1,922
Risk Rating System | Special Mention | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Risk Rating System | Special Mention | Loans to financial institutions
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Risk Rating System | Special Mention | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Risk Rating System | Substandard
Financing Receivable, Recorded Investment [Line Items]
Total Loans	16,063	16,048
Risk Rating System | Substandard | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	4,830	5,081
Risk Rating System | Substandard | Multi-family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	287	298
Risk Rating System | Substandard | Commercial real estate
Financing Receivable, Recorded Investment [Line Items]
Total Loans	2,196	1,919
Risk Rating System | Substandard | Construction and land development
Financing Receivable, Recorded Investment [Line Items]
Total Loans	8,750	8,750
Risk Rating System | Substandard | Loans to financial institutions
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Risk Rating System | Substandard | Commercial business
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 0	$ 0

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	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 660,098	$ 665,391
One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	299,323	324,865
Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,139	1,687
Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	891	953
Non Risk Rating System
Financing Receivable, Recorded Investment [Line Items]
Total Loans	301,353	327,505
Non Risk Rating System | Performing
Financing Receivable, Recorded Investment [Line Items]
Total Loans	298,064	324,493
Non Risk Rating System | Performing | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	296,034	321,853
Non Risk Rating System | Performing | Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	1,139	1,687
Non Risk Rating System | Performing | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	891	953
Non Risk Rating System | Nonperforming
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,289	3,012
Non Risk Rating System | Nonperforming | One-to-four family residential
Financing Receivable, Recorded Investment [Line Items]
Total Loans	3,289	3,012
Non Risk Rating System | Nonperforming | Leases
Financing Receivable, Recorded Investment [Line Items]
Total Loans	0	0
Non Risk Rating System | Nonperforming | Consumer
Financing Receivable, Recorded Investment [Line Items]
Total Loans	$ 0	$ 0

XML

LOANS RECEIVABLE - Loan categories of loan portfolio summarized by aging categories of performing loans and nonaccrual loans (Details 6) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	$ 645,442	$ 651,233
Past Due	14,656	14,158
Total Loans	660,098	665,391
Non- Accrual	13,514	13,389
90 Days+ Past Due and Accruing	0	0
30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,261	1,875
90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	13,395	12,283
One-to-four family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	295,160	321,749
Past Due	4,163	3,116
Total Loans	299,323	324,865
Non- Accrual	3,289	3,012
90 Days+ Past Due and Accruing	0	0
One-to-four family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	993	1,037
One-to-four family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	3,170	2,079
Multi-family residential
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	34,934	34,355
Past Due	160	0
Total Loans	35,094	34,355
Non- Accrual	0	0
90 Days+ Past Due and Accruing	0	0
Multi-family residential | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	160	0
Multi-family residential | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Commercial real estate
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	126,777	117,335
Past Due	1,475	2,176
Total Loans	128,252	119,511
Non- Accrual	1,475	1,627
90 Days+ Past Due and Accruing	0	0
Commercial real estate | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	722
Commercial real estate | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	1,475	1,454
Construction and land development
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	159,715	151,478
Past Due	8,750	8,750
Total Loans	168,465	160,228
Non- Accrual	8,750	8,750
90 Days+ Past Due and Accruing	0	0
Construction and land development | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Construction and land development | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	8,750	8,750
Financial institutions
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	6,000	6,000
Past Due	0	0
Total Loans	6,000	6,000
Non- Accrual	0	0
90 Days+ Past Due and Accruing	0	0
Financial institutions | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Financial institutions | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Commercial business
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	20,934	17,792
Past Due	0	0
Total Loans	20,934	17,792
Non- Accrual	0	0
90 Days+ Past Due and Accruing	0	0
Commercial business | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Commercial business | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Leases
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	1,139	1,687
Past Due	0	0
Total Loans	1,139	1,687
Non- Accrual	0	0
90 Days+ Past Due and Accruing	0	0
Leases | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Leases | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	0	0
Consumer
Financing Receivable, Recorded Investment, Past Due [Line Items]
Current	783	837
Past Due	108	116
Total Loans	891	953
Non- Accrual	0	0
90 Days+ Past Due and Accruing	0	0
Consumer | 30-89 Days Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	108	116
Consumer | 90 Days + Past Due
Financing Receivable, Recorded Investment, Past Due [Line Items]
Past Due	$ 0	$ 0

XML

LOANS RECEIVABLE - Activity in allowance (Details 7) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	$ 5,167	$ 4,676	$ 5,167	$ 4,466
Charge-offs	0	(12)	0	(12)
Recoveries	60	27	60	27
Provision	0	150	0	360
ALLL balance	5,227	4,841	5,227	4,841
One- to four-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	1,427	1,270	1,343	1,241
Charge-offs	0	0	0	0
Recoveries	60	27	60	27
Provision	(173)	11	(89)	40
ALLL balance	1,314	1,308	1,314	1,308
Multi-family residential
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	372	158	347	205
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	13	47	38	0
ALLL balance	385	205	385	205
Commercial real estate
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	1,147	1,064	1,154	1,201
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	195	19	188	(118)
ALLL balance	1,342	1,083	1,342	1,083
Construction and land development
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	1,445	1,621	1,554	1,358
Charge-offs	0	(12)	0	(12)
Recoveries	0	0	0	0
Provision	(75)	(144)	(184)	119
ALLL balance	1,370	1,465	1,370	1,465
Financial institutions
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	67	0	64	0
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	1	62	4	62
ALLL balance	68	62	68	62
Commercial business
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	193	26	187	4
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	42	80	48	102
ALLL balance	235	106	235	106
Leases
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	16	20	18	23
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	(3)	9	(5)	6
ALLL balance	13	29	13	29
Consumer
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	13	24	18	24
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	7	73	2	73
ALLL balance	20	97	20	97
Unallocated
Allowance for Loan and Lease Losses [Roll Forward]
ALLL balance	487	493	482	410
Charge-offs	0	0	0	0
Recoveries	0	0	0	0
Provision	(7)	(7)	(2)	76
ALLL balance	$ 480	$ 486	$ 480	$ 486

XML

LOANS RECEIVABLE (Detail Textuals)	3 Months Ended			6 Months Ended
	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)	Mar. 31, 2019 USD ($) Loan	Mar. 31, 2018 USD ($)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Provision for loan losses	$ 0	$ 150,000		$ 0	$ 360,000
Allowance for Loan and Lease Losses, Write-offs	0	12,000		0	12,000
Allowance for Loan and Lease Loss, Recovery of Bad Debts	60,000	$ 27,000		$ 60,000	$ 27,000
Number of loans default | Loan				9
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	6,000,000			$ 6,000,000
Nonperforming
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans default | Loan				3
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	4,900,000			$ 4,900,000
Amount of TDR loans, default				$ 10,600,000
Write-down amount of TDR loans			$ 1,900,000
Nonperforming | Commercial and residential properties
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans default | Loan				1
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	445,000			$ 445,000
Performing
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of loans default | Loan				5
Loans classified as troubled debt restructurings ("TDRs"), Recorded investment	$ 644,000			$ 644,000

XML

DEPOSITS - Major classifications of deposits (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Amount
Money market deposit accounts	$ 67,346	$ 66,120
Interest-bearing checking accounts	64,156	49,209
Non interest-bearing checking accounts	12,350	13,620
Passbook, club and statement savings	87,383	91,489
Certificates maturing in six months or less	352,331	301,184
Certificates maturing in more than six months	241,933	262,636
Total deposits	$ 825,499	$ 784,258
Percent
Money market deposit accounts	8.20%	8.40%
Interest-bearing checking accounts	7.70%	6.30%
Non interest-bearing checking accounts	1.50%	1.70%
Passbook, club and statement savings	10.60%	11.70%
Certificates maturing in six months or less	42.70%	38.40%
Certificates maturing in more than six months	29.30%	33.50%
Total	100.00%	100.00%

XML

DEPOSITS (Detail Textuals) - USD ($) $ in Millions	Mar. 31, 2019	Sep. 30, 2018
Deposits [Abstract]
Certificates of $250,000 and over	$ 29.7	$ 81.9

XML

ADVANCES FROM FEDERAL HOME LOAN BANK - SHORT TERM (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.73%	2.73%
Advances from FHLB short-term	$ 25,500	$ 10,000
Weighted average | Short-term
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.70%	2.31%
Fixed Rate - Repo Plus Maturity Date 12 Oct 18 | Short-term
Federal Home Loan Bank, Advances [Line Items]
Maturity Date		Oct. 12, 2018
Coupon		2.31%
Call Date		Not Applicable
Advances from FHLB short-term	$ 0	$ 10,000
Fixed Rate Repo Plus Maturity Date 1 Apr 19 | Short-term
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Apr. 01, 2019
Coupon	2.70%
Call Date	Not Applicable
Advances from FHLB short-term	$ 500	0
Fixed Rate Repo Plus Maturity Date 15 Apr 19 | Short-term
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Apr. 15, 2019
Coupon	2.71%
Call Date	Not Applicable
Advances from FHLB short-term	$ 10,000	0
Fixed Rate Repo Plus Maturity Date 17 Apr 19 | Short-term
Federal Home Loan Bank, Advances [Line Items]
Maturity Date	Apr. 17, 2019
Coupon	2.70%
Call Date	Not Applicable
Advances from FHLB short-term	$ 15,000	$ 0

XML

ADVANCES FROM FEDERAL HOME LOAN BANK - SHORT TERM (Detail Textuals) - USD ($)	Mar. 31, 2019	Sep. 30, 2018
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Short-term borrowings from the FHLB	$ 25,500,000	$ 10,000,000
Remaining advances were used short term liquidity needs	500,000
First interest rate swap contract
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Short-term borrowings from the FHLB	10,000,000	$ 10,000,000
Second interest rate swap contract
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items]
Short-term borrowings from the FHLB	$ 15,000,000

XML

ADVANCES FROM FEDERAL HOME LOAN BANK - LONG TERM (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.73%	2.73%
Long-term Federal Home Loan Bank Advances	$ 199,594	$ 144,683
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 18 to 30 Sep 20
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2018	Oct. 01, 2018
Date of maturity to	Sep. 30, 2020	Sep. 30, 2020
Long-term Federal Home Loan Bank Advances	$ 940	$ 1,639
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 18 to 30 Sep 20 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.53%	1.53%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 18 to 30 Sep 20 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.53%	1.53%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 18 to 30 Sep 20 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.53%	1.53%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 20 to 30 Sep 21
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2020	Oct. 01, 2020
Date of maturity to	Sep. 30, 2021	Sep. 30, 2021
Long-term Federal Home Loan Bank Advances	$ 18,851	$ 23,288
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 20 to 30 Sep 21 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.94%	1.94%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 20 to 30 Sep 21 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.83%	2.83%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 20 to 30 Sep 21 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.69%	2.69%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 21 to 30 Sep 22
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2021	Oct. 01, 2021
Date of maturity to	Sep. 30, 2022	Sep. 30, 2022
Long-term Federal Home Loan Bank Advances	$ 10,299	$ 11,848
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 21 to 30 Sep 22 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.99%	1.99%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 21 to 30 Sep 22 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.05%	3.05%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 21 to 30 Sep 22 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.80%	2.80%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 22 to 30 Sep 23
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2022	Oct. 01, 2022
Date of maturity to	Sep. 30, 2023	Sep. 30, 2023
Long-term Federal Home Loan Bank Advances	$ 7,746	$ 8,550
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 22 to 30 Sep 23 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.94%	1.94%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 22 to 30 Sep 23 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.11%	3.11%
Long-term | Fixed Rate Amortizing Maturity from 1 Oct 22 to 30 Sep 23 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.88%	2.88%
Long-term | Fixed Rate - Amortizing
Federal Home Loan Bank, Advances [Line Items]
Long-term Federal Home Loan Bank Advances	$ 37,836	$ 45,325
Long-term | Fixed Rate - Amortizing | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.73%	2.73%
Long-term | Fixed Rate Advances Maturity from 1 Oct 18 to 30 Sep 19
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2018	Oct. 01, 2018
Date of maturity to	Sep. 30, 2019	Sep. 30, 2019
Long-term Federal Home Loan Bank Advances	$ 3,011	$ 18,528
Long-term | Fixed Rate Advances Maturity from 1 Oct 18 to 30 Sep 19 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.40%	1.40%
Long-term | Fixed Rate Advances Maturity from 1 Oct 18 to 30 Sep 19 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.66%	2.66%
Long-term | Fixed Rate Advances Maturity from 1 Oct 18 to 30 Sep 19 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.66%	2.66%
Long-term | Fixed Rate Advances Maturity from 1 Oct 19 to 30 Sep 20
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2019	Oct. 01, 2019
Date of maturity to	Sep. 30, 2020	Sep. 30, 2020
Long-term Federal Home Loan Bank Advances	$ 12,365	$ 12,413
Long-term | Fixed Rate Advances Maturity from 1 Oct 19 to 30 Sep 20 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.38%	1.38%
Long-term | Fixed Rate Advances Maturity from 1 Oct 19 to 30 Sep 20 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.06%	3.06%
Long-term | Fixed Rate Advances Maturity from 1 Oct 19 to 30 Sep 20 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.62%	2.62%
Long-term | Fixed Rate Advances Maturity from 1 Oct 20 to 30 Sep 21
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2020	Oct. 01, 2020
Date of maturity to	Sep. 30, 2021	Sep. 30, 2021
Long-term Federal Home Loan Bank Advances	$ 3,027	$ 3,037
Long-term | Fixed Rate Advances Maturity from 1 Oct 20 to 30 Sep 21 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.42%	1.42%
Long-term | Fixed Rate Advances Maturity from 1 Oct 20 to 30 Sep 21 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.92%	2.92%
Long-term | Fixed Rate Advances Maturity from 1 Oct 20 to 30 Sep 21 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.45%	2.45%
Long-term | Fixed Rate Advances Maturity from 1 Oct 21 to 30 Sep 22
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2021	Oct. 01, 2021
Date of maturity to	Sep. 30, 2022	Sep. 30, 2022
Long-term Federal Home Loan Bank Advances	$ 23,358	$ 23,380
Long-term | Fixed Rate Advances Maturity from 1 Oct 21 to 30 Sep 22 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	1.94%	1.94%
Long-term | Fixed Rate Advances Maturity from 1 Oct 21 to 30 Sep 22 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.23%	3.23%
Long-term | Fixed Rate Advances Maturity from 1 Oct 21 to 30 Sep 22 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.28%	2.28%
Long-term | Fixed Rate Advances Maturity from 1 Oct 22 to 30 Sep 23
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2022	Oct. 01, 2022
Date of maturity to	Sep. 30, 2023	Sep. 30, 2023
Long-term Federal Home Loan Bank Advances	$ 65,999	$ 37,000
Long-term | Fixed Rate Advances Maturity from 1 Oct 22 to 30 Sep 23 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.18%	2.18%
Long-term | Fixed Rate Advances Maturity from 1 Oct 22 to 30 Sep 23 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.22%	3.22%
Long-term | Fixed Rate Advances Maturity from 1 Oct 22 to 30 Sep 23 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.72%	2.72%
Long-term | Fixed Rate Advances Maturity from 1 Oct 23 to 30 Sep 24
Federal Home Loan Bank, Advances [Line Items]
Date of maturity from	Oct. 01, 2023	Oct. 01, 2023
Date of maturity to	Sep. 30, 2024	Sep. 30, 2024
Long-term Federal Home Loan Bank Advances	$ 53,998	$ 5,000
Long-term | Fixed Rate Advances Maturity from 1 Oct 23 to 30 Sep 24 | Minimum
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.98%	2.98%
Long-term | Fixed Rate Advances Maturity from 1 Oct 23 to 30 Sep 24 | Maximum
Federal Home Loan Bank, Advances [Line Items]
Coupon	3.20%	3.20%
Long-term | Fixed Rate Advances Maturity from 1 Oct 23 to 30 Sep 24 | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.99%	2.99%
Long-term | Long-term FHLB advances
Federal Home Loan Bank, Advances [Line Items]
Long-term Federal Home Loan Bank Advances	$ 161,758	$ 99,358
Long-term | Long-term FHLB advances | Weighted Average
Federal Home Loan Bank, Advances [Line Items]
Coupon	2.73%	2.73%

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DERIVATIVES (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Derivative [Line Items]
Unrealized Gain (Loss)	$ (4,151)	$ (202)
Interest rate swap contract maturing on 10 Apr 2025
Derivative [Line Items]
Hedge Item	FHLB Advance	FHLB Advance
Notional Amount	$ 10,000	$ 10,000
Pay Rate	2.70%	2.70%
Receive Rate	1 Mth Libor	1 Mth Libor
Maturity Date	Apr. 10, 2025	Apr. 10, 2025
Unrealized Gain (Loss)	$ (311)	$ 35
Interest rate swap contract maturing on 15 Feb 2027
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 1,705	$ 1,705
Pay Rate	3.06%	3.06%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Feb. 15, 2027	Feb. 15, 2027
Unrealized Gain (Loss)	$ (87)	$ (19)
Interest rate swap contract maturing on 1 Apr 2027
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 2,825	$ 2,825
Pay Rate	3.06%	3.06%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Apr. 01, 2027	Apr. 01, 2027
Unrealized Gain (Loss)	$ (147)	$ (31)
Interest rate swap contract maturing on 1 Jan 2028
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 5,000	$ 5,000
Pay Rate	3.07%	3.07%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Jan. 01, 2028	Jan. 01, 2028
Unrealized Gain (Loss)	$ (275)	$ (57)
Interest rate swap contract maturing on 1 Mar 2028
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 1,235	$ 1,235
Pay Rate	3.07%	3.07%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Mar. 01, 2028	Mar. 01, 2028
Unrealized Gain (Loss)	$ (69)	$ (14)
Interest rate swap contract maturing on 1 May 2028
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 4,500	$ 4,500
Pay Rate	3.07%	3.07%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	May 01, 2028	May 01, 2028
Unrealized Gain (Loss)	$ (252)	$ (52)
Interest rate swap contract maturing on 1 Feb 2027
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 3,305	$ 3,305
Pay Rate	3.05%	3.05%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Feb. 01, 2027	Feb. 01, 2027
Unrealized Gain (Loss)	$ (165)	$ (32)
Interest rate swap contract maturing on 15 Oct 2027
Derivative [Line Items]
Hedge Item	State and political subdivision	State and political subdivision
Notional Amount	$ 3,000	$ 3,000
Pay Rate	3.06%	3.06%
Receive Rate	3 Mth Libor	3 Mth Libor
Maturity Date	Oct. 15, 2027	Oct. 15, 2027
Unrealized Gain (Loss)	$ (160)	$ (32)
Interest rate swap contract maturing on 13 Jun 2025
Derivative [Line Items]
Hedge Item	Commercial loan	Commercial loan
Notional Amount	$ 8,300	$ 8,300
Pay Rate	5.74%	5.74%
Receive Rate	1 Mth Libor +250 bp	1 Mth Libor +250 bp
Maturity Date	Jun. 13, 2025	Jun. 13, 2025
Unrealized Gain (Loss)	$ 0	$ 0
Interest rate swap contract maturing on 1 Aug 2026
Derivative [Line Items]
Hedge Item	Commercial loan	Commercial loan
Notional Amount	$ 1,100	$ 1,100
Pay Rate	4.10%	4.10%
Receive Rate	1 Mth Libor +276 bp	1 Mth Libor +276 bp
Maturity Date	Aug. 01, 2026	Aug. 01, 2026
Unrealized Gain (Loss)	$ 0	$ 0
Interest rate swap contract maturing on 11 Jan 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 20,000
Pay Rate	2.78%
Receive Rate	3 Mth Libor
Maturity Date	Jan. 11, 2024
Unrealized Gain (Loss)	$ (492)
Interest rate swap contract maturing on 18 Jan 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 15,000
Pay Rate	2.75%
Receive Rate	3 Mth Libor
Maturity Date	Jan. 18, 2024
Unrealized Gain (Loss)	$ (345)
Interest rate swap contract maturing on 20 Feb 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 25,000
Pay Rate	2.66%
Receive Rate	3 Mth Libor
Maturity Date	Feb. 20, 2024
Unrealized Gain (Loss)	$ (491)
Interest rate swap contract maturing on 28 Feb 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 25,000
Pay Rate	2.56%
Receive Rate	3 Mth Libor
Maturity Date	Feb. 28, 2024
Unrealized Gain (Loss)	$ (377)
Interest rate swap contract maturing on 15 Feb 24
Derivative [Line Items]
Hedge Item	30 Day wholesale funding
Notional Amount	$ 15,000
Pay Rate	2.51%
Receive Rate	1 Mth Libor
Maturity Date	Feb. 15, 2024
Unrealized Gain (Loss)	$ (257)
Interest rate swap contract maturing on 13 Mar 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 25,000
Pay Rate	2.59%
Receive Rate	3 Mth Libor
Maturity Date	Mar. 13, 2024
Unrealized Gain (Loss)	$ (409)
Interest rate swap contract maturing on 27 Mar 24
Derivative [Line Items]
Hedge Item	90 Day wholesale funding
Notional Amount	$ 25,000
Pay Rate	2.51%
Receive Rate	3 Mth Libor
Maturity Date	Mar. 27, 2024
Unrealized Gain (Loss)	$ (314)

XML

DERIVATIVES (Detail Textuals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Income recognized as ineffectiveness through earnings	$ 3,000	$ 6,000	$ 5,000	$ 48,000

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INCOME TAXES - Items that gave rise to significant portions of deferred income taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Deferred tax assets:
Allowance for loan losses	$ 1,428	$ 1,445
Nonaccrual interest	619	312
Accrued vacation	4	29
Capital loss carryforward	356	356
Split dollar life insurance	8	10
Post-retirement benefits	77	85
Unrealized losses on available for sale securities	576	2,212
Unrealized losses on interest rate swaps	629	0
Deferred compensation	811	838
Goodwill	75	80
Other	50	55
Employee benefit plans	330	239
Total deferred tax assets	4,963	5,661
Valuation allowance	(356)	(356)
Total deferred tax assets, net of valuation allowance	4,607	5,305
Deferred tax liabilities:
Property	127	179
Unrealized gains on interest rate swaps	0	44
Purchase accounting adjustments	102	59
Deferred loan fees	266	368
Total deferred tax liabilities	495	650
Net deferred tax assets	$ 4,112	$ 4,655

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INCOME TAXES (Detail Textuals) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Sep. 30, 2018
Income Taxes [Line Items]
Valuation allowance	$ 356		$ 356		$ 356
Income tax expense	$ 380	$ 619	809	$ 2,883
TCJA remeasurement of deferred tax assets			$ 1,800
Period of capital gains recognized			5 years
Tax at statutory rate			24.25%
January 1, 2018
Income Taxes [Line Items]
Tax at statutory rate			21.00%
October 1, 2018
Income Taxes [Line Items]
Tax at statutory rate			21.00%

XML

STOCK COMPENSATION PLANS - Summary of non-vested stock award activity (Details) - $ / shares	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Number of Shares
Nonvested stock awards at October 1, 2018	116,916	142,594
Granted	0	26,500
Forfeited	0	4,636
Vested	(44,024)	(44,647)
Nonvested stock awards at the March 31, 2019	72,892	129,083
Weighted Average Grant Date Fair Value
Nonvested stock awards at October 1	$ 14.36	$ 12.79
Granted	0	18.46
Forfeited	0	11.91
Vested	13.38	12.06
Nonvested stock awards at the March 31	$ 14.95	$ 14.17

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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 - Stock Options - $ / shares	6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Number of Shares
Outstanding at October 1	869,026	922,564
Granted	0	177,500
Exercised	(75,694)	(37,171)
Forfeited	(6,000)	(12,234)
Outstanding at March 31	787,332	1,050,659
Exercisable at March 31	512,788	595,385
Weighted Average Exercise Price
Outstanding at October 1	$ 13.41	$ 12.04
Granted	0	18.46
Exercised	11.77	11.50
Forfeited	12.23	11.90
Outstanding at March 31	13.58	13.15
Exercisable at March 31	$ 12.13	$ 11.53

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STOCK COMPENSATION PLANS (Detail Textuals) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended		6 Months Ended
	Mar. 31, 2018	Aug. 31, 2016	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted			0	26,500
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	8,209	7,473

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STOCK COMPENSATION PLANS (Detail Textuals 1) - USD ($)	1 Months Ended					3 Months Ended		6 Months Ended
	Mar. 31, 2018	May 31, 2017	Mar. 31, 2017	Aug. 31, 2016	Feb. 28, 2015	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted								0	26,500
2008 Stock Option Plan (the "2008 Option Plan")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	18,235	283
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 shares purchased for award				18,867
2014 Stock Incentive Plan (the "2014 SIP")
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares granted	18,291	24,717	17,128	3,027
2014 Stock Incentive Plan (the "2014 SIP") | 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	159,265		22,828	8,633
2014 Stock Incentive Plan (the "2014 SIP") | 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 shares granted					233,500
2008 RRP and 2014 SIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares purchased for award					605,000
2008 RRP and 2014 SIP | Restricted stock awards or units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of options								5 years
Recognized compensation expense						$ 150,000	$ 99,000	$ 307,000	$ 250,000
Additional compensation expense for shares awarded remained unrecognized						1,100,000		1,100,000
2008 Option Plan and 2014 SIP | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense						127,000	$ 102,000	277,000	$ 239,000
Additional compensation expense for shares awarded remained unrecognized						$ 1,100,000		$ 1,100,000

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STOCK COMPENSATION PLANS (Detail Textuals 2) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average remaining contractual term for options outstanding			7 years
Exercise price and fair value	$ 18.46		$ 18.46
2008 Option Plan and 2014 SIP | Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recognized compensation expense	$ 127,000	$ 102,000	$ 277,000	$ 239,000
Additional compensation expense for shares awarded remained unrecognized	$ 1,100,000		$ 1,100,000
Weighted average period for recognition of nonvested awards			2 years 2 months 12 days
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
2008 Option Plan and 2014 SIP | Stock Options | 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
Fair value, valuation method			Black-Scholes pricing model
Expected term			7 years
Volatility rate			14.37%
Expected interest rate			2.22%
Expected yield			0.69%
2008 Option Plan and 2014 SIP | Stock Options | Granted in fiscal 2017 | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price and fair value	$ 18.39		$ 18.39
2008 Option Plan and 2014 SIP | Stock Options | Granted in fiscal 2017 | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercise price and fair value	$ 17.43		17.43
2008 Option Plan and 2014 SIP | Stock Options | Granted in fiscal 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated fair value of options granted per share			$ 3.63
Fair value, valuation method			Black-Scholes pricing model
Expected term			7 years
Volatility rate			15.90%
Expected interest rate			2.82%
Expected yield			1.08%

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COMMITMENTS AND CONTINGENT LIABILITIES (Detail Textuals) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Mar. 31, 2019	Sep. 30, 2018
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 1,500
Aggregate undisbursed portion of loans-in-process	70,462	$ 54,474
Loan Origination Commitments
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	58,200	40,400
Aggregate undisbursed portion of loans-in-process	$ 70,500	$ 54,500
Loan Origination Commitments | Minimum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	6.00%	4.25%
Loan Origination Commitments | Maximum
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Market interest rate on fixed and variable rate loans	6.75%	6.25%
Unused lines of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 69,700	$ 51,900
Letters of Credit
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items]
Outstanding commitments	$ 1,600	$ 1,600

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FAIR VALUE MEASUREMENT - Assets measured at fair value on recurring basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Assets:
Assets, Total	$ 446,238	$ 306,412
Liabilities
Liabilities, Total	4,141
Level 1
Assets:
Assets, Total	72	37
Liabilities
Liabilities, Total	0
Level 2
Assets:
Assets, Total	446,166	306,375
Liabilities
Liabilities, Total	4,141
Level 3
Assets:
Assets, Total	0	0
Liabilities
Liabilities, Total	0
U.S. Government and agency obligations
Assets:
Assets, Total	24,822	24,171
U.S. Government and agency obligations | Level 1
Assets:
Assets, Total	0	0
U.S. Government and agency obligations | Level 2
Assets:
Assets, Total	24,822	24,171
U.S. Government and agency obligations | Level 3
Assets:
Assets, Total	0	0
State and political subdivisions
Assets:
Assets, Total	22,793	21,536
State and political subdivisions | Level 1
Assets:
Assets, Total	0	0
State and political subdivisions | Level 2
Assets:
Assets, Total	22,793	21,536
State and political subdivisions | Level 3
Assets:
Assets, Total	0	0
Mortgage-backed securities - U.S. government agencies
Assets:
Assets, Total	305,717	187,360
Mortgage-backed securities - U.S. government agencies | Level 1
Assets:
Assets, Total	0	0
Mortgage-backed securities - U.S. government agencies | Level 2
Assets:
Assets, Total	305,717	187,360
Mortgage-backed securities - U.S. government agencies | Level 3
Assets:
Assets, Total	0	0
Corporate bonds
Assets:
Assets, Total	92,834	73,083
Corporate bonds | Level 1
Assets:
Assets, Total	0	0
Corporate bonds | Level 2
Assets:
Assets, Total	92,834	73,083
Corporate bonds | Level 3
Assets:
Assets, Total	0	0
Equity security - FHLMC preferred stock
Assets:
Assets, Total	72	37
Equity security - FHLMC preferred stock | Level 1
Assets:
Assets, Total	72	37
Equity security - FHLMC preferred stock | Level 2
Assets:
Assets, Total	0	0
Equity security - FHLMC preferred stock | Level 3
Assets:
Assets, Total	0	0
Interest rate swap contracts
Assets:
Assets, Total		225
Liabilities
Liabilities, Total	4,141
Interest rate swap contracts | Level 1
Assets:
Assets, Total		0
Liabilities
Liabilities, Total	0
Interest rate swap contracts | Level 2
Assets:
Assets, Total		225
Liabilities
Liabilities, Total	4,141
Interest rate swap contracts | Level 3
Assets:
Assets, Total		$ 0
Liabilities
Liabilities, Total	$ 0

XML

FAIR VALUE MEASUREMENT - Changes in level 3 assets measured at fair value (Details 1) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Impaired loans	$ 16,073	$ 16,048
Real estate owned	423	1,026
Total	16,496	17,074
Level 1
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Real estate owned	0	0
Total	0	0
Level 2
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Impaired loans	0	0
Real estate owned	0	0
Total	0	0
Level 3
Fair Value, Assets and Liabilities Measured On Recurring and Nonrecurring Basis [Line Items]
Impaired loans	16,073	16,048
Real estate owned	423	1,026
Total	$ 16,496	$ 17,074

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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 on a nonrecurring basis $ in Thousands		Mar. 31, 2019 USD ($) Percent	Sep. 30, 2018 USD ($) Percent
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans | $		$ 16,073	$ 16,048
Real estate owned | $		423	1,026
Level 3
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans | $		16,073	16,048
Real estate owned | $		$ 423	$ 1,026
Level 3 | Management discount for selling costs, property type and market volatility | Property appraisals | Minimum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans measurement input (in percent) | Percent	[1],[2],[3]	6	6
Level 3 | Management discount for selling costs, property type and market volatility | Property appraisals | Maximum
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans measurement input (in percent) | Percent	[1],[2],[3]	8	8
Level 3 | Management discount for selling costs, property type and market volatility | Property appraisals | Weighted average
Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques [Line Items]
Impaired loans measurement input (in percent) | Percent	[1],[2],[3]	6	6
Real estate owned measurement input (in percent) | Percent	[1],[2],[3]	10	18

[1] 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.

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

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

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FAIR VALUE MEASUREMENT - Assets measured at fair value on a non-recurring basis and the adjustments to the carrying value (Details 3) - USD ($) $ in Thousands	Mar. 31, 2019	Sep. 30, 2018	Mar. 31, 2018	Sep. 30, 2017
Assets:
Cash and cash equivalents	$ 50,593	$ 48,171	$ 18,108	$ 27,903
Certificates of deposit	2,351	1,604
Investment and mortgage-backed securities available for sale	446,166	306,187
Investment and mortgage-backed securities held to maturity	57,361	59,852
Loans receivable, net	581,555	602,932
Accrued interest receivable	4,314	3,825
Restricted bank stock - at cost	10,383	7,585
Bank owned life insurance	28,996	28,691
Liabilities:
Passbook, club and statement savings accounts	87,383	91,489
Advances from FHLB short-term	25,500	10,000
Advances from FHLB long-term	199,594	144,683
Accrued interest payable	2,814	3,232
Advances from borrowers for taxes and insurance	2,260	$ 2,083
Carrying Amount
Assets:
Cash and cash equivalents	50,593
Certificates of deposit	2,351
Investment and mortgage-backed securities available for sale	446,166
Equity securities	72
Investment and mortgage-backed securities held to maturity	57,361
Loans receivable, net	581,555
Accrued interest receivable	4,314
Restricted bank stock - at cost	10,383
Bank owned life insurance	28,996
Liabilities:
Checking accounts	76,506
Money market deposit accounts	67,346
Passbook, club and statement savings accounts	87,383
Certificates of deposit	594,264
Advances from FHLB short-term	25,500
Advances from FHLB long-term	199,594
Accrued interest payable	2,814
Advances from borrowers for taxes and insurance	2,260
Interest rate swap contracts	4,141
Fair Value
Assets:
Cash and cash equivalents	50,593
Certificates of deposit	2,351
Investment and mortgage-backed securities available for sale	446,166
Equity securities	72
Investment and mortgage-backed securities held to maturity	56,159
Loans receivable, net	578,091
Accrued interest receivable	4,314
Restricted bank stock - at cost	10,383
Bank owned life insurance	28,996
Liabilities:
Checking accounts	76,506
Money market deposit accounts	67,346
Passbook, club and statement savings accounts	87,383
Certificates of deposit	605,324
Advances from FHLB short-term	25,500
Advances from FHLB long-term	201,289
Accrued interest payable	2,814
Advances from borrowers for taxes and insurance	2,260
Interest rate swap contracts	4,141
Level 1
Assets:
Cash and cash equivalents	50,593
Certificates of deposit	2,351
Investment and mortgage-backed securities available for sale	0
Equity securities	72
Investment and mortgage-backed securities held to maturity	0
Loans receivable, net	0
Accrued interest receivable	4,314
Restricted bank stock - at cost	10,383
Bank owned life insurance	28,996
Liabilities:
Checking accounts	76,506
Money market deposit accounts	67,346
Passbook, club and statement savings accounts	87,383
Certificates of deposit	0
Advances from FHLB short-term	25,500
Advances from FHLB long-term	0
Accrued interest payable	2,814
Advances from borrowers for taxes and insurance	2,260
Interest rate swap contracts	0
Level 2
Assets:
Cash and cash equivalents	0
Certificates of deposit	0
Investment and mortgage-backed securities available for sale	446,166
Investment and mortgage-backed securities held to maturity	56,159
Loans receivable, net	0
Accrued interest receivable	0
Restricted bank stock - at cost	0
Bank owned life insurance	0
Liabilities:
Checking accounts	0
Money market deposit accounts	0
Passbook, club and statement savings accounts	0
Certificates of deposit	0
Advances from FHLB long-term	0
Accrued interest payable	0
Advances from borrowers for taxes and insurance	0
Interest rate swap contracts	4,141
Level 3
Assets:
Cash and cash equivalents	0
Certificates of deposit	0
Investment and mortgage-backed securities available for sale	0
Investment and mortgage-backed securities held to maturity	578,091
Loans receivable, net	0
Accrued interest receivable	0
Restricted bank stock - at cost	0
Bank owned life insurance	0
Liabilities:
Checking accounts	0
Money market deposit accounts	0
Passbook, club and statement savings accounts	0
Certificates of deposit	605,324
Advances from FHLB short-term	0
Advances from FHLB long-term	201,289
Accrued interest payable	0
Advances from borrowers for taxes and insurance	0
Interest rate swap contracts	$ 0

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FAIR VALUE MEASUREMENT (Detail Textuals) $ in Millions	Mar. 31, 2019 USD ($)
Level 2
Financing Receivable, Impaired [Line Items]
Collateral dependent impaired loans, fair value	$ 16.1

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GOODWILL AND OTHER INTANGIBLE ASSETS - Related to acquisition of Polonia Bancorp (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018
Goodwill [Roll Forward]
Balance, Goodwill			$ 6,102
Balance, Goodwill	$ 6,102		6,102
Finite-lived Intangible Assets [Roll Forward]
Balance	508		508
Intangible Assets Net Including Goodwill [Roll Forward]
Amortization	(29)	$ (34)	(63)	$ (71)
Polonia Bancorp
Goodwill [Roll Forward]
Balance, Goodwill			6,102
Additions/Adjustments			0
Balance, Goodwill	6,102		6,102
Intangible Assets Net Including Goodwill [Roll Forward]
Balance, Total			6,673
Additions/Adjustments			0
Amortization			(63)
Balance, Total	6,610		6,610
Polonia Bancorp | Core deposit intangible
Finite-lived Intangible Assets [Roll Forward]
Balance			571
Additions/Adjustments			0
Amortization			(63)
Balance	$ 508		$ 508
Amortization Period			10 years

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GOODWILL AND OTHER INTANGIBLE ASSETS - Future fiscal periods amortization expense (Details 1) $ in Thousands	Mar. 31, 2019 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2019	$ 60
2020	108
2021	93
2022	78
2023	64
Thereafter	105
Total	$ 508