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LOANS & ALLOWANCE FOR CREDIT LOSSES
 3 Months Ended
Sep. 30, 2022
Receivables [Abstract]  
LOANS & ALLOWANCE FOR CREDIT LOSSES LOANS & ALLOWANCE FOR CREDIT LOSSES
The composition of the loan portfolio was:
(Dollars in thousands)September 30, 2022June 30, 2022
Single Family - Mortgage & Warehouse$4,009,809 $3,988,462 
Multifamily and Commercial Mortgage2,964,982 2,877,680 
Commercial Real Estate5,523,895 4,781,044 
Commercial & Industrial - Non-RE2,244,342 2,028,128 
Auto & Consumer631,344 567,228 
Other9,954 11,134 
Total gross loans and leases15,384,326 14,253,676 
Allowance for credit losses - loans(155,472)(148,617)
Unaccreted premiums (discounts) and loan and lease fees(17,281)(13,998)
Total net loans and leases$15,211,573 $14,091,061 
Activity in the allowance for credit losses by portfolio classes for the periods was:
For the Three Months Ended September 30, 2022
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerOtherTotal
Balance at July 1, 2022$19,670 $14,655 $69,339 $30,808 $14,114 $31 $148,617 
Provision (benefit) for credit losses - loans(1,642)(6)4,437 3,557 2,405 (1)8,750 
Charge-offs(4)— — — (2,362)— (2,366)
Recoveries15 — — 18 438 — 471 
Balance at September 30, 2022$18,039 $14,649 $73,776 $34,383 $14,595 $30 $155,472 
For the Three Months Ended September 30, 2021
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerOtherTotal
Balance at July 1, 2021$26,604 $13,146 $57,928 $28,460 $6,519 $301 $132,958 
Provision (benefit) for credit losses - loans(1,351)36 7,295 (5,646)3,626 40 4,000 
Charge-offs— — — (322)(394)— (716)
Recoveries76 177 — 27 256 — 536 
Balance at September 30, 2021$25,329 $13,359 $65,223 $22,519 $10,007 $341 $136,778 
Credit Quality Disclosures. Nonaccrual loans consisted of the following as of the dates indicated:
(Dollars in thousands)As of September 30, 2022
Single Family - Mortgage & Warehouse$65,687 
Multifamily and Commercial Mortgage35,837 
Commercial Real Estate14,852 
Commercial & Industrial - Non-RE2,989 
Auto & Consumer990 
Other126 
     Total nonaccrual loans$120,481 
Nonaccrual loans to total loans0.78 %


(Dollars in thousands)As of June 30, 2022
Single Family - Mortgage & Warehouse$66,424 
Multifamily and Commercial Mortgage33,410 
Commercial Real Estate14,852 
Commercial & Industrial - Non-RE2,989 
Auto & Consumer439 
Other80 
     Total nonaccrual loans$118,194 
Nonaccrual loans to total loans0.83 %
No interest income was recognized on nonaccrual loans in the three months ended September 30, 2022 or September 30, 2021 and there were no nonaccrual loans without an allowance for credit losses as of September 30, 2022 and June 30, 2022.
Approximately 1.13% of our nonaccrual loans at September 30, 2022 were considered troubled debt restructurings (“TDRs”), compared to 0.55% at June 30, 2022. Borrowers that make timely payments after TDRs are considered non-performing for at least six months. Generally, after six months of timely payments, those TDRs are reclassified from the nonaccrual loan category to the performing loan category and any previously deferred interest income is recognized. Approximately 54.52% of the Bank’s nonaccrual loans are single family first mortgages.
The outstanding unpaid balance of loans that are either performing or nonaccrual by portfolio class was:
September 30, 2022
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerOtherTotal
Performing$3,944,122 $2,929,145 $5,509,043 $2,241,353 $630,354 $9,828 $15,263,845 
Nonaccrual65,687 35,837 14,852 2,989 990 126 120,481 
          Total$4,009,809 $2,964,982 $5,523,895 $2,244,342 $631,344 $9,954 $15,384,326 
June 30, 2022
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerOtherTotal
Performing$3,922,038 $2,844,270 $4,766,192 $2,025,139 $566,789 $11,054 $14,135,482 
Nonaccrual66,424 33,410 14,852 2,989 439 80 118,194 
          Total$3,988,462 $2,877,680 $4,781,044 $2,028,128 $567,228 $11,134 $14,253,676 

From time to time the Company modifies loan terms temporarily for borrowers who are experiencing financial stress. These loans are performing and accruing and generally return to the original loan terms after the modification term expires. The Company had no TDRs classified as performing loans at September 30, 2022 or June 30, 2022.
Credit Quality Indicators
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. The Company analyzes loans individually by classifying the loans based on credit risk. The Company uses the following definitions for risk ratings.
Pass. Loans classified as pass are well protected by the current net worth and paying capacity of the obligor or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.
Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The Company reviews and grades loans following a continuous review process, featuring coverage of all loan types and business lines at least quarterly. Continuous reviewing provides more effective risk monitoring because it immediately tests for potential impacts caused by changes in personnel, policy, products or underwriting standards.
The amortized cost basis of the Company’s loans by year of origination and credit quality indicator are:
September 30, 2022
Loans Held for Investment Origination YearRevolving Loans Total
(Dollars in thousands)20232022202120202019Prior
Single Family-Mortgage & Warehouse
Pass$309,401 $1,427,758 $579,544 $380,330 $277,775 $767,417 $168,798 $3,911,023 
Special Mention— — — 4,971 2,165 18,091 7,532 32,759 
Substandard— 3,201 3,171 5,017 18,700 35,518 420 66,027 
Doubtful— — — — — — — — 
Total309,401 1,430,959 582,715 390,318 298,640 821,026 176,750 4,009,809 
Multifamily and Commercial Mortgage
Pass187,856 1,004,942 541,338 403,340 247,670 483,365 — 2,868,511 
Special Mention— 9,706 3,980 532 3,269 — — 17,487 
Substandard— 3,145 5,759 32,935 6,832 30,313 — 78,984 
Doubtful— — — — — — — — 
Total187,856 1,017,793 551,077 436,807 257,771 513,678 — 2,964,982 
Commercial Real Estate
Pass509,209 2,613,562 953,785 312,381 182,800 28,759 760,859 5,361,355 
Special Mention— — 55,820 12,138 1,000 15,000 — 83,958 
Substandard— — 38,290 — 15,487 23,507 1,298 78,582 
Doubtful— — — — — — — — 
Total509,209 2,613,562 1,047,895 324,519 199,287 67,266 762,157 5,523,895 
Commercial & Industrial - Non-RE
Pass63,185 402,229 35,057 19,008 10,858 6,520 1,671,859 2,208,716 
Special Mention— — — — — — — — 
Substandard— 2,988 — 8,500 — — 24,138 35,626 
Doubtful— — — — — — — — 
Total63,185 405,217 35,057 27,508 10,858 6,520 1,695,997 2,244,342 
Auto & Consumer
Pass115,451 328,900 96,119 37,417 31,545 20,039 — 629,471 
Special Mention— 328 218 44 16 38 — 644 
Substandard— 509 291 154 231 44 — 1,229 
Doubtful— — — — — — — — 
Total115,451 329,737 96,628 37,615 31,792 20,121 — 631,344 
Other
Pass698 2,000 3,310 — — 1,525 — 7,533 
Special Mention— — 2,295 — — — — 2,295 
Substandard— — — — — 126 — 126 
Doubtful— — — — — — — — 
Total698 2,000 5,605 — — 1,651 — 9,954 
Total
Pass1,185,800 5,779,391 2,209,153 1,152,476 750,648 1,307,625 2,601,516 14,986,609 
Special Mention— 10,034 62,313 17,685 6,450 33,129 7,532 137,143 
Substandard— 9,843 47,511 46,606 41,250 89,508 25,856 260,574 
Doubtful— — — — — — — — 
Total$1,185,800$5,799,268$2,318,977$1,216,767$798,348$1,430,262$2,634,904$15,384,326
As a % of total gross loans7.71%37.70%15.07%7.91%5.19%9.30%17.13%100.0%
June 30, 2022
Loans Held for Investment Origination YearRevolving Loans Total
(Dollars in thousands)20222021202020192018Prior
Single Family-Mortgage & Warehouse
Pass$1,484,027 $600,054 $402,712 $303,999 $279,248 $548,703 $241,925 $3,860,668 
Special Mention— — 4,790 2,505 4,125 10,971 38,637 61,028 
Substandard— 2,288 3,928 18,407 5,955 36,188 — 66,766 
Doubtful— — — — — — — — 
Total1,484,027 602,342 411,430 324,911 289,328 595,862 280,562 3,988,462 
Multifamily and Commercial Mortgage
Pass999,819 569,486 429,247 259,161 219,548 316,013 — 2,793,274 
Special Mention1,200 — 534 539 — 968 — 3,241 
Substandard— 5,772 34,343 9,613 7,308 24,129 — 81,165 
Doubtful— — — — — — — — 
Total1,001,019 575,258 464,124 269,313 226,856 341,110 — 2,877,680 
Commercial Real Estate
Pass2,482,366 990,887 358,422 186,800 28,758 — 602,412 4,649,645 
Special Mention— 32,351 12,138 16,487 15,000 — — 75,976 
Substandard— — 12,575 18,043 23,507 — 1,298 55,423 
Doubtful— — — — — — — — 
Total2,482,366 1,023,238 383,135 221,330 67,265 — 603,710 4,781,044 
Commercial & Industrial - Non-RE
Pass435,228 66,226 25,629 61,932 9,268 — 1,388,435 1,986,718 
Special Mention13 — — 186 710 — — 909 
Substandard2,988 28,359 9,154 — — — — 40,501 
Doubtful— — — — — — — — 
Total438,229 94,585 34,783 62,118 9,978 — 1,388,435 2,028,128 
Auto & Consumer
Pass352,468 107,882 43,377 37,008 16,147 8,891 — 565,773 
Special Mention204 188 24 110 — 1 — 527 
Substandard157 311 224 205 25 6 — 928 
Doubtful— — — — — — — — 
Total352,829 108,381 43,625 37,323 16,172 8,898 — 567,228 
Other
Pass3,057 6,185 — — 1,091 721 — 11,054 
Special Mention— — — — — — — — 
Substandard— — 46 — — 34 — 80 
Doubtful— — — — — — — — 
Total3,057 6,185 46 — 1,091 755 — 11,134 
Total
Pass5,756,965 2,340,720 1,259,387 848,900 554,060 874,328 2,232,772 13,867,132 
Special Mention1,417 32,539 17,486 19,827 19,835 11,940 38,637 141,681 
Substandard3,145 36,730 60,270 46,268 36,795 60,357 1,298 244,863 
Doubtful— — — — — — — — 
Total$5,761,527 $2,409,989 $1,337,143 $914,995 $610,690 $946,625 $2,272,707 $14,253,676 
As a % of total gross loans40.42%16.91%9.38%6.42%4.28%6.64%15.95%100.0%
The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses and evaluates credit quality based on the aging status of its loans. Certain short-term loans do not have a fixed maturity date and are treated as delinquent if not paid in full 90 days after the origination date.
The outstanding unpaid balance of loans past due 30 days or more by portfolio class are:
September 30, 2022
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due90+ Days Past DueTotal
Single Family-Mortgage & Warehouse$13,021 $5,494 $57,883 $76,398 
Multifamily and Commercial Mortgage5,909 358 30,001 36,268 
Commercial Real Estate9,655 — 14,852 24,507 
Commercial & Industrial - Non-RE— — — — 
Auto & Consumer4,174 945 495 5,614 
Other1,162 — 126 1,288 
Total$33,921 $6,797 $103,357 $144,075 
As a % of total gross loans0.22 %0.05 %0.67 %0.94 %
June 30, 2022
(Dollars in thousands)30-59 Days Past Due60-89 Days Past Due90+ Days Past DueTotal
Single Family-Mortgage & Warehouse$5,167 $1,518 $63,286 $69,971 
Multifamily and Commercial Mortgage9,455 2,115 26,556 38,126 
Commercial Real Estate— 14,852 — 14,852 
Commercial & Industrial - Non-RE— — — — 
Auto & Consumer4,865 1,009 466 6,340 
Other413 — 193 606 
Total$19,900 $19,494 $90,501 $129,895 
As a % of total gross loans0.14 %0.14 %0.63 %0.91 %
Loans reaching 90+ days past due are placed on non-accrual as required under Company policy. No loans 90+ days past due were still accruing interest as of September 30, 2022 and June 30, 2022.
Loans in process of foreclosure were $20.4 million and $20.7 million as of September 30, 2022 and June 30, 2022, respectively.
Unfunded Loan Commitment Reserves
Unfunded loan commitment reserves are included in “Accounts payable and other liabilities” in the unaudited Condensed Consolidated Balance Sheets. Provisions for the unfunded loan commitments are included in the unaudited Condensed Consolidated Statements of Income in “General and administrative expenses”.
The following tables present a summary of the activity in the unfunded loan commitment reserves for the periods indicated:
Three Months Ended September 30,
(Dollars in thousands)20222021
BALANCE—beginning July 1$10,973 $5,723 
Provision— 2,000 
BALANCE—end September 30$10,973 $7,723