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LOANS & ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
LOANS & ALLOWANCE FOR CREDIT LOSSES LOANS & ALLOWANCE FOR CREDIT LOSSES
The Company categorizes the loan portfolio into five segments: Single Family - Mortgage & Warehouse, Multifamily and Commercial Mortgage, Commercial Real Estate, Commercial & Industrial - Non Real Estate (“Non-RE”) and Auto & Consumer. For further detail of the segments of the Company’s loan portfolio, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2024 Form 10-K.
The following table sets forth the composition of the loan portfolio:
(Dollars in thousands)December 31, 2024June 30, 2024
Single Family - Mortgage & Warehouse$4,149,778 $4,178,832 
Multifamily and Commercial Mortgage1
3,430,948 3,861,931 
Commercial Real Estate1
6,214,834 6,088,622 
Commercial & Industrial - Non-RE5,809,877 5,241,766 
Auto & Consumer420,937 431,660 
Total gross loans20,026,374 19,802,811 
Allowance for credit losses - loans(270,605)(260,542)
Unaccreted premiums (discounts) and loan fees(269,042)(310,884)
Total net loans$19,486,727 $19,231,385 
1 Includes purchased credit deteriorated (“PCD”) loans of $281.3 million and $284.0 million in Multifamily and Commercial Mortgage and $44.5 million and $44.5 million in Commercial Real Estate as of December 31, 2024 and June 30, 2024, respectively. For further detail on PCD loans, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2024 Form 10-K.
Accrued interest receivable on loans held for investments totaled $111.3 million and $119.8 million as of December 31, 2024 and June 30, 2024, respectively.
At December 31, 2024 and June 30, 2024, the Company pledged certain loans totaling $4,326.2 million and $4,942.8 million, respectively, to the FHLB and $8,129.0 million and $8,197.2 million, respectively, to the Federal Reserve Bank of San Francisco (“FRBSF”).
The following table presents loan-to-value (“LTV”) for the Company’s real estate loans outstanding as of December 31, 2024:
Total Real Estate LoansSingle Family - Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real Estate
Weighted-Average LTV47.5 %55.7 %51.0 %40.1 %
Median LTV52.0 %53.0 %49.0 %43.9 %
The following table presents the components of the provision for credit losses:
For the Three Months Ended December 31,
For the Six Months Ended December 31,
(Dollars in thousands)
2024202320242023
Provision for credit losses - loans
$11,748 $12,500 $23,248 $18,250 
Provision for credit losses - unfunded lending commitments
500 1,000 3,000 2,250 
    Total provision for credit losses
$12,248 $13,500 $26,248 $20,500 
The following tables summarize activity in the allowance for credit losses - loans by portfolio segment:
For the Three Months Ended December 31, 2024
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Balance at October 1, 2024
$17,453 $65,608 $95,032 $76,555 $9,206 $263,854 
Provision (benefit) for credit losses - loans(1,355)(6,334)7,422 8,030 3,985 11,748 
Charge-offs— (3,197)— (130)(2,495)(5,822)
Recoveries6 — — — 819 825 
Balance at December 31, 2024
$16,104 $56,077 $102,454 $84,455 $11,515 $270,605 
For the Three Months Ended December 31, 2023
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Balance at October 1, 2023
$17,426 $15,874 $71,355 $54,592 $11,623 $170,870 
Allowance for credit losses at acquisition of PCD loans— 58,972 11,125 — — 70,097 
Provision (benefit) for credit losses - loans(2,080)3,507 (4,702)14,695 1,080 12,500 
Charge-offs— — — (86)(2,321)(2,407)
Recoveries10 — — — 679 689 
Balance at December 31, 2023
$15,356 $78,353 $77,778 $69,201 $11,061 $251,749 
For the Six Months Ended December 31, 2024
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Balance at July 1, 2024
$16,943 $70,771 $87,780 $76,032 $9,016 $260,542 
Provision (benefit) for credit losses - loans(891)(8,140)14,674 11,585 6,020 23,248 
Charge-offs— (6,554)— (3,162)(5,344)(15,060)
Recoveries52 — — — 1,823 1,875 
Balance at December 31, 2024
$16,104 $56,077 $102,454 $84,455 $11,515 $270,605 
For the Six Months Ended December 31, 2023
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Balance at July 1, 2023
$17,503 $16,848 $72,755 $46,347 $13,227 $166,680 
Allowance for credit losses at acquisition of PCD loans— 58,972 11,125 — — 70,097 
Provision (benefit) for credit losses - loans(2,090)2,533 (6,102)22,940 969 18,250 
Charge-offs(80)— — (86)(4,602)(4,768)
Recoveries23 — — — 1,467 1,490 
Balance at December 31, 2023
$15,356 $78,353 $77,778 $69,201 $11,061 $251,749 
For the three and six months ended December 31, 2024, the allowance for credit losses for loans increased as a result of the provision for credit losses, partially offset by net charge-offs. The provision for credit losses was primarily due to the quantitative impact of macroeconomic variables in the allowance for credit losses model, primarily the U.S. unemployment rate and commercial real estate mortgage rates, as well as loan growth, increases in specific reserves and certain qualitative adjustments, mainly in the commercial & industrial - non-RE portfolio.
Loan products within each portfolio contain varying collateral types which impact the estimate of the loss given default utilized in the calculation of the allowance for credit losses for loans. For further discussion of the model method of estimating expected lifetime credit losses, see Note 1—“Organizations and Summary of Significant Accounting Policies” in the 2024 Form 10-K.
The following tables present a summary of the activity in the allowance for credit losses for off-balance sheet lending commitments:
Three Months Ended December 31,
(Dollars in thousands)20242023
Balance at October 1,
$12,723 $11,723 
Provision for credit losses - unfunded lending commitments
500 1,000 
Balance at December 31,
$13,223 $12,723 
Six Months Ended December 31,
(Dollars in thousands)20242023
Balance at July 1,
$10,223 $10,473 
Provision for credit losses - unfunded lending commitments
3,000 2,250 
Balance at December 31,
$13,223 $12,723 
The increase in the allowance for off-balance sheet lending commitments for the three and six months ended December 31, 2024, was primarily driven by unfunded lending commitment growth, primarily in the commercial & industrial - non-RE portfolio.
Credit Quality Disclosures. The following tables provide the composition of loans that are performing and nonaccrual by portfolio segment:
December 31, 2024
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Performing$4,080,208 $3,381,791 $6,155,068 $5,739,018 $418,757 $19,774,842 
Nonaccrual69,570 49,157 59,766 70,859 2,180 251,532 
Total$4,149,778 $3,430,948 $6,214,834 $5,809,877 $420,937 $20,026,374 
Nonaccrual loans to total loans1.26 %
June 30, 2024
(Dollars in thousands)Single Family-Mortgage & WarehouseMultifamily and Commercial MortgageCommercial Real EstateCommercial & Industrial - Non-REAuto & ConsumerTotal
Performing$4,133,121 $3,826,877 $6,062,520 $5,237,746 $429,188 $19,689,452 
Nonaccrual45,711 35,054 26,102 4,020 2,472 113,359 
Total$4,178,832 $3,861,931 $6,088,622 $5,241,766 $431,660 $19,802,811 
Nonaccrual loans to total loans0.57 %
There were no nonaccrual loans without an allowance for credit losses as of December 31, 2024 and June 30, 2024. There was no interest income recognized on nonaccrual loans in the three and six months ended December 31, 2024 and 2023. Loans reaching 90 days past due are generally placed on nonaccrual status and risk rated as substandard or doubtful. Loans not yet reaching 90 days past due may be placed on nonaccrual status based on management’s assessment of the aging of contractual principal amounts due, among other factors.
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. In addition to the borrower’s primary source of repayment, in its risk rating process the Company considers all available sources of repayment, including obligor guaranties and liquidations of pledged collateral, where individually or together such sources would fully repay the loan on a timely basis. The Company analyzes loans individually by classifying the loans based on credit risk. The Company uses the following internally-defined risk ratings:
Pass. Loans where repayment in full is expected through any of the borrower’s sources of repayment.
Special Mention. Loans where any credit risk is not considered significant yet require management’s attention given certain currently identified characteristics of the borrower, collateral securing the loan and the obligor’s net worth and paying capacity. If the identified credit risks are not adequately monitored or mitigated, the loan may weaken and the Company’s credit position with respect to the loan may deteriorate in the future.
Substandard. Loans where currently identified characteristics of the borrower, collateral securing the loan and the obligor’s net worth and paying capacity, taken together, could jeopardize the repayment of the debt. A loan not fully supported by at least one available source of repayment and involves a distinct possibility that the Company will sustain some loss in that
loan if the weakness is not cured. A loan supported by a guaranty, collateral sufficient to incentivize a sale or refinance, or cash flow that is sufficient for timely repayment in full will not be classified as substandard even if the loan has a well-defined weakness in other sources of repayment.
Doubtful. Loans reflecting the same characteristics as those classified as substandard, but for which repayment in full in accordance with the contractual terms is currently considered highly unlikely.
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 following tables present the composition of loans by portfolio segment, fiscal year of origination and credit quality indicator, and the amount of year-to-date gross charge-offs.
December 31, 2024
Loans Held for Investment by Fiscal Year of Origination
Revolving Loans Total
(Dollars in thousands)20252024202320222021Prior
Single Family-Mortgage & Warehouse
Pass$228,407 $358,736 $502,219 $1,107,651 $464,983 $848,732 $500,009 $4,010,737 
Special Mention— 4,119 1,455 19,542 2,978 22,172 8,551 58,817 
Substandard— 1,200 5,704 15,602 5,832 51,886 — 80,224 
Doubtful— — — — — — — — 
Total228,407 364,055 509,378 1,142,795 473,793 922,790 508,560 4,149,778 
Year-to-date gross charge-offs— — — — — — — — 
Multifamily and Commercial Mortgage
Pass22,417 29,290 652,116 981,431 468,493 1,099,774 — 3,253,521 
Special Mention— — 23,199 58,964 4,340 25,096 — 111,599 
Substandard— — — 16,035 2,000 47,793 — 65,828 
Doubtful— — — — — — — — 
Total22,417 29,290 675,315 1,056,430 474,833 1,172,663 — 3,430,948 
Year-to-date gross charge-offs— — — — — 6,554 — 6,554 
Commercial Real Estate
Pass1,517,172 1,592,351 1,031,855 883,495 143,351 30,000 881,147 6,079,371 
Special Mention— 53,875 — — — — — 53,875 
Substandard— — — 43,525 5,000 29,191 3,872 81,588 
Doubtful— — — — — — — — 
Total1,517,172 1,646,226 1,031,855 927,020 148,351 59,191 885,019 6,214,834 
Year-to-date gross charge-offs— — — — — — — — 
Commercial & Industrial - Non-RE
Pass462,836 831,133 405,020 148,634 46,117 41,238 3,552,851 5,487,829 
Special Mention— 16,271 — — — — 7,213 23,484 
Substandard— 14,065 34,532 127,126 3,665 2,989 106,187 288,564 
Doubtful— — — 10,000 — — — 10,000 
Total462,836 861,469 439,552 285,760 49,782 44,227 3,666,251 5,809,877 
Year-to-date gross charge-offs— — 130 — 1,032 — 2,000 3,162 
Auto & Consumer
Pass74,619 57,408 93,350 141,743 32,646 18,154 — 417,920 
Special Mention16 27 204 349 91 1 — 688 
Substandard— 225 504 976 156 468 — 2,329 
Doubtful— — — — — — — — 
Total74,635 57,660 94,058 143,068 32,893 18,623 — 420,937 
Year-to-date gross charge-offs18 281 1,620 2,395 704 326 — 5,344 
Total
Pass2,305,451 2,868,918 2,684,560 3,262,954 1,155,590 2,037,898 4,934,007 19,249,378 
Special Mention16 74,292 24,858 78,855 7,409 47,269 15,764 248,463 
Substandard— 15,490 40,740 203,264 16,653 132,327 110,059 518,533 
Doubtful— — — 10,000 — — — 10,000 
Total$2,305,467 $2,958,700 $2,750,158 $3,555,073 $1,179,652 $2,217,494 $5,059,830 $20,026,374 
As a % of total gross loans11.5%14.8%13.7%17.7%5.9%11.1%25.3%100.0%
Total year-to-date gross charge-offs$18 $281 $1,750 $2,395 $1,736 $6,880 $2,000 $15,060 
June 30, 2024
Loans Held for Investment by Fiscal Year of Origination
Revolving Loans Total
(Dollars in thousands)20242023202220212020Prior
Single Family-Mortgage & Warehouse
Pass$491,822 $590,060 $1,200,230 $487,132 $291,047 $720,049 $256,778 $4,037,118 
Special Mention31,000 — 24,489 665 6,591 26,873 — 89,618 
Substandard— 283 6,728 — 14,720 30,365 — 52,096 
Doubtful— — — — — — — — 
Total522,822 590,343 1,231,447 487,797 312,358 777,287 256,778 4,178,832 
Year-to-date gross charge-offs— — — — — 172 — 172 
Multifamily and Commercial Mortgage
Pass36,058 700,163 994,004 595,299 510,341 811,184 — 3,647,049 
Special Mention— 29,325 46,194 17,478 9,011 10,277 — 112,285 
Substandard— 13,489 12,509 15,507 41,013 20,079 — 102,597 
Doubtful— — — — — — — — 
Total36,058 742,977 1,052,707 628,284 560,365 841,540 — 3,861,931 
Year-to-date gross charge-offs— — — — 640 — — 640 
Commercial Real Estate
Pass1,952,001 1,419,399 1,456,643 221,061 7,741 53,000 866,686 5,976,531 
Special Mention— — 27,452 — — — — 27,452 
Substandard— 5,600 43,700 5,000 — 30,339 — 84,639 
Doubtful— — — — — — — — 
Total1,952,001 1,424,999 1,527,795 226,061 7,741 83,339 866,686 6,088,622 
Year-to-date gross charge-offs— — — — — — — — 
Commercial & Industrial - Non-RE
Pass991,497 458,454 238,397 44,923 10,422 12,867 3,295,425 5,051,985 
Special Mention— 1,613 731 1,818 — — 5,349 9,511 
Substandard— 34,433 122,729 1,031 — 2,988 19,089 180,270 
Doubtful— — — — — — — — 
Total991,497 494,500 361,857 47,772 10,422 15,855 3,319,863 5,241,766 
Year-to-date gross charge-offs— — — — — 84 — 84 
Auto & Consumer
Pass65,766 114,615 177,043 43,287 13,402 14,056 — 428,169 
Special Mention33 213 422 176 — 61 — 905 
Substandard142 547 1,264 410 114 109 — 2,586 
Doubtful— — — — — — — — 
Total65,941 115,375 178,729 43,873 13,516 14,226 — 431,660 
Year-to-date gross charge-offs202 3,471 5,212 1,556 303 269 — 11,013 
Total
Pass3,537,144 3,282,691 4,066,317 1,391,702 832,953 1,611,156 4,418,889 19,140,852 
Special Mention31,033 31,151 99,288 20,137 15,602 37,211 5,349 239,771 
Substandard142 54,352 186,930 21,948 55,847 83,880 19,089 422,188 
Doubtful— — — — — — — — 
Total$3,568,319 $3,368,194 $4,352,535 $1,433,787 $904,402 $1,732,247 $4,443,327 $19,802,811 
As a % of total gross loans18.0%17.0%22.0%7.2%4.6%8.8%22.4%100%
Total year-to-date gross charge-offs$202 $3,471 $5,212 $1,556 $943 $525 $— $11,909 
The following tables provide the aging of loans by portfolio segment:
December 31, 2024
(Dollars in thousands)Current30-59 Days60-89 Days90+ DaysTotal
Single Family-Mortgage & Warehouse$4,063,877 $21,352 $12,671 $51,878 $4,149,778 
Multifamily and Commercial Mortgage3,373,736 8,557 14,818 33,837 3,430,948 
Commercial Real Estate6,126,947 15,000 3,185 69,702 6,214,834 
Commercial & Industrial - Non-RE5,784,695 7,588 — 17,594 5,809,877 
Auto & Consumer413,813 5,502 767 855 420,937 
Total$19,763,068 $57,999 $31,441 $173,866 $20,026,374 
As a % of total gross loans98.68 %0.29 %0.16 %0.87 %100 %
June 30, 2024
(Dollars in thousands)Current30-59 Days60-89 Days90+ DaysTotal
Single Family-Mortgage & Warehouse$4,070,186 $46,387 $18,401 $43,858 $4,178,832 
Multifamily and Commercial Mortgage3,795,387 13,074 8,554 44,916 3,861,931 
Commercial Real Estate6,024,470 — 25,950 38,202 6,088,622 
Commercial & Industrial - Non-RE
5,240,734 — — 1,032 5,241,766 
Auto & Consumer424,555 4,644 996 1,465 431,660 
Total$19,555,332 $64,105 $53,901 $129,473 $19,802,811 
As a % of total gross loans98.75 %0.33 %0.27 %0.65 %100 %
Loans reaching 90 or more days past due are generally placed on nonaccrual. As of December 31, 2024 and June 30, 2024, there were loans of $34.7 million and $20.2 million, respectively, over 90 days past due and still accruing interest as the Company expects to collect the principal and interest amounts due.
Single family mortgage loans in process of foreclosure were $28.8 million and $20.1 million as of December 31, 2024 and June 30, 2024, respectively.
Loan Modifications to Borrowers Experiencing Financial Difficulty. The Company may grant certain modifications of loans to borrowers experiencing financial difficulty, which effective following the adoption of ASU 2022-02, are reported as financial difficulty modifications (“FDMs”). The Company’s modification programs provide various modifications to borrowers experiencing financial difficulty which may include interest rate reductions, term extensions, payment delays and/or principal forgiveness. For the three and six months ended December 31, 2024 and 2023, there were no FDMs.