Allowance for Losses on Loans (Tables)

6 Months Ended

Mar. 31, 2015

Summary of Activity in Allowance for Loan Losses

The following table summarizes the activity in the allowance for loan losses (excluding acquired and covered loans) for the three and six months ended March 31, 2015 and 2014:



Three Months Ended March 31, 2015	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	55,495	$	(1,409	)	$	4,122	$	(3,446	)	$	54,762
Construction - speculative	5,451		—			75		(81		)	5,445
Construction - custom	965		—			—		3			968
Land - acquisition & development	6,671		—			204		530			7,405
Land - consumer lot loans	3,113		(52		)	34		(60		)	3,035
Multi-family	4,500		—			—		173			4,673
Commercial real estate	5,872		—			453		409			6,734
Commercial & industrial	23,328		(355		)	18		(1,845		)	21,146
HELOC	892		—			—		(42		)	850
Consumer	2,413		(701		)	734		859			3,305
	$	108,700	$	(2,517	)	$	5,640	$	(3,500	)	$	108,323



Three Months Ended March 31, 2014	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	67,692	$	(2,444	)	$	2,088	$	(3,988	)	$	63,348
Construction - speculative	8,142		(488		)	$	—	(881		)	6,773
Construction - custom	1,474		—			—		125			1,599
Land - acquisition & development	7,084		(85		)	299		(1,271		)	6,027
Land - consumer lot loans	3,274		(231		)	—		(69		)	2,974
Multi-family	4,109		—			—		78			4,187
Commercial real estate	5,868		(73		)	—		129			5,924
Commercial & industrial	16,505		(444		)	2,852		1,490			20,403
HELOC	943		—			—		32			975
Consumer	3,067		(1,010		)	1,059		(395		)	2,721
	$	118,158	$	(4,775	)	$	6,298	$	(4,750	)	$	114,931



Six Months Ended March 31, 2015	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	62,763	$	(3,103	)	$	6,675	$	(11,573	)	$	54,762
Construction - speculative	6,742		(388		)	$	75	(984		)	5,445
Construction - custom	1,695		—			—		(727		)	968
Land - acquisition & development	5,592		(38		)	205		1,646			7,405
Land - consumer lot loans	3,077		(87		)	34		11			3,035
Multi-family	4,248		—			220		205			4,673
Commercial real estate	7,548		(27		)	481		(1,268		)	6,734
Commercial & industrial	16,527		(355		)	52		4,922			21,146
HELOC	928		—			—		(78		)	850
Consumer	3,227		(1,128		)	1,349		(143		)	3,305
	$	112,347	$	(5,126	)	$	9,091	$	(7,989	)	$	108,323



Six Months Ended March 31, 2014	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	64,184	$	(4,777	)	$	10,913	$	(6,972	)	$	63,348
Construction - speculative	8,407		(938		)	$	95	(791		)	6,773
Construction - custom	882		—			—		717			1,599
Land - acquisition & development	9,165		(541		)	738		(3,335		)	6,027
Land - consumer lot loans	3,552		(474		)	22		(126		)	2,974
Multi-family	3,816		—			—		371			4,187
Commercial real estate	5,595		(73		)	—		402			5,924
Commercial & industrial	16,614		(692		)	3,273		1,208			20,403
HELOC	1,002		—			—		(27		)	975
Consumer	3,524		(2,091		)	2,085		(797		)	2,721
	$	116,741	$	(9,586	)	$	17,126	$	(9,350	)	$	114,931

Summary of Loans Collectively and Individually Evaluated for Impairment and Related Allocation of Reserves

The following tables shows a summary of loans collectively and individually evaluated for impairment and the related allocation of general and specific reserves as of March 31, 2015 and September 30, 2014:



March 31, 2015	Loans Collectively Evaluated for Impairment						Loans Individually Evaluated for Impairment
	General Reserve Allocation		Gross Loans Subject to General Reserve (1)		Ratio		Specific Reserve Allocation		Gross Loans Subject to Specific Reserve (1)		Ratio
	(In thousands)						(In thousands)
Single-family residential	$	54,762	$	5,476,667	1.0	%	$	—	$	55,886	—	%
Construction - speculative	5,445		97,987		5.6		—		7,405		—
Construction - custom	968		201,777		0.5		—		—		—
Land - acquisition & development	7,405		87,541		8.5		—		3,298		—
Land - consumer lot loans	3,035		89,279		3.4		—		12,723		—
Multi-family	4,673		936,010		0.5		—		5,112		—
Commercial real estate	6,734		617,633		1.1		—		10,210		—
Commercial & industrial	21,146		442,459		4.8		—		—		—
HELOC	850		119,235		0.7		—		1,669		—
Consumer	3,305		218,605		1.5		—		95		—
	$	108,323	$	8,287,193	1.3	%	$	—	$	96,398	—	%


(1)	Excludes acquired loans with discounts sufficient to absorb potential losses and covered loans



September 30, 2014	Loans Collectively Evaluated for Impairment						Loans Individually Evaluated for Impairment
	General Reserve Allocation		Gross Loans Subject to General Reserve (1)		Ratio		Specific Reserve Allocation		Gross Loans Subject to Specific Reserve (1)		Ratio
	(In thousands)						(In thousands)
Single-family residential	$	62,067	$	5,487,331	1.1	%	$	—	$	72,869	—	%
Construction - speculative	6,682		130,901		5.5		60		9,159		0.7
Construction - custom	1,695		385,464		0.5		—		360		—
Land - acquisition & development	5,592		73,999		7.6		—		3,833		—
Land - consumer lot loans	3,077		95,684		3.2		—		12,939		—
Multi-family	4,248		911,162		0.5		—		6,124		—
Commercial real estate	7,548		563,534		1.4		—		27,802		—
Commercial & industrial	17,223		421,816		4.6		—		—		—
HELOC	928		114,393		0.9		—		1,650		—
Consumer	3,227		132,590		2.4		—		—		—
	$	112,287	$	8,316,874	1.4	%	$	60	$	134,736	—	%

(1) Excludes acquired loans with discounts sufficient to absorb potential losses and covered loans

Summary of Loans Based on Credit Quality Indicators

The following tables provide information on loans (excluding covered loans) based on credit quality indicators as defined above as of March 31, 2015 and September 30, 2014.



March 31, 2015	Internally Assigned Grade															Total
	Pass			Special mention			Substandard			Doubtful			Loss			Gross Loans
	(In thousands)
Non-acquired loans
Single-family residential	$	5,426,579		$	2,343		$	106,182		$	—		$	—		$	5,535,104
Construction - speculative	157,847			—			5,810			—			—			163,657
Construction - custom	370,693			—			—			—			—			370,693
Land - acquisition & development	99,686			—			5,372			—			—			105,058
Land - consumer lot loans	101,505			—			577			—			—			102,082
Multi-family	1,004,149			—			5,854			—			—			1,010,003
Commercial real estate	728,274			—			12,863			—			—			741,137
Commercial & industrial	353,998			13,949			35,542			4,869			—			408,358
HELOC	120,653			—			248			—			—			120,901
Consumer	218,500			—			180			—			—			218,680
	8,581,884			16,292			172,628			4,869			—			8,775,673

Non-impaired acquired loans
Single-family residential	10,977			—			—			—			—			10,977
Land - acquisition & development	343			—			385			—			—			728
Land - consumer lot loans	2,476			—			—			—			—			2,476
Multi-family	2,912			—			—			—			—			2,912
Commercial real estate	81,059			514			5,740			—			—			87,313
Commercial & industrial	53,666			1,870			123			—			—			55,659
HELOC	6,700			—			—			—			—			6,700
Consumer	2,794			—			—			—			—			2,794
	160,927			2,384			6,248			—			—			169,559

Credit-impaired acquired loans
Pool 1 - Construction and land A&D	1,146			—			249			—			—			1,395
Pool 2 - Single-family residential	322			—			—			—			—			322
Pool 3 - Multi-family	—			—			—			—			—			—
Pool 4 - HELOC & other consumer	8,889			—			—			—			—			8,889
Pool 5 - Commercial real estate	45,472			1,773			9,482			—			—			56,727
Pool 6 - Commercial & industrial	2,190			—			—			—			—			2,190
Total credit impaired acquired loans	58,019			1,773			9,731			—			—			69,523
Total gross loans	$	8,800,830		$	20,449		$	188,607		$	4,869		$	—		$	9,014,755

Total grade as a % of total gross loans	97.6		%	0.2		%	2.1		%	0.1		%	—		%



September 30, 2014	Internally Assigned Grade															Total
	Pass			Special mention			Substandard			Doubtful			Loss			Gross Loans
	(In thousands)
Non-acquired loans
Single-family residential	$	5,426,895		$	2,793		$	130,515		$	—		$	—		$	5,560,203
Construction - speculative	134,950			—			5,110			—			—			140,060
Construction - custom	385,824			—			—			—			—			385,824
Land - acquisition & development	71,692			—			6,140			—			—			77,832
Land - consumer lot loans	108,013			—			610			—			—			108,623
Multi-family	912,728			—			4,558			—			—			917,286
Commercial real estate	557,914			1,971			31,451			—			—			591,336
Commercial & industrial	359,221			14,740			5,265			—			—			379,226
HELOC	115,794			—			248			—			—			116,042
Consumer	132,349			—			241			—			—			132,590
	8,205,380			19,504			184,138			—			—			8,409,022

Non-impaired acquired loans
Single-family residential	11,716			—			—			—			—			11,716
Land - acquisition & development	503			—			402			—			—			905
Land - consumer lot loans	2,507			—			—			—			—			2,507
Multi-family	2,999			—			—			—			—			2,999
Commercial real estate	88,974			2,571			6,353			—			—			97,898
Commercial & industrial	36,311			13,642			1,375			58			—			51,386
HELOC	8,274			—			—			—			—			8,274
Consumer	5,670			—			—			—			—			5,670
	156,954			16,213			8,130			58			—			181,355

Credit-impaired acquired loans
Pool 1 - Construction and land A&D	1,292			—			330			—			—			1,622
Pool 2 - Single-family residential	325			—			—			—			—			325
Pool 3 - Multi-family	—			—			—			—			—			—
Pool 4 - HELOC & other consumer	10,194			—			—			—			—			10,194
Pool 5 - Commercial real estate	48,878			2,143			12,702			—			—			63,723
Pool 6 - Commercial & industrial	643			—			2,833			—			—			3,476
Total credit impaired acquired loans	61,332			2,143			15,865			—			—			79,340
Total gross loans	$	8,423,666		$	37,860		$	208,133		$	58		$	—		$	8,669,717

Total grade as a % of total gross loans	97.2		%	0.4		%	2.4		%	—		%	—		%

Credit Risk Profile Based on Payment Activity (excludes acquired and covered loans):



March 31, 2015	Performing Loans				Non-Performing Loans
	Amount		% of Total Gross Loans		Amount		% of Total Gross Loans
	(In thousands)
Single-family residential	$	5,474,323	98.9	%	$	60,781	1.1	%
Construction - speculative	162,505		99.3		1,152		0.7
Construction - custom	370,693		100.0		—		—
Land - acquisition & development	105,058		100.0		—		—
Land - consumer lot loans	99,624		97.6		2,458		2.4
Multi-family	1,010,003		100.0		—		—
Commercial real estate	735,402		99.2		5,735		0.8
Commercial & industrial	403,340		98.8		5,018		1.2
HELOC	119,726		99.0		1,175		1.0
Consumer	218,104		99.7		576		0.3
	$	8,698,778	99.1	%	$	76,895	0.9	%



September 30, 2014	Performing Loans				Non-Performing Loans
	Amount		% of Total Gross Loans		Amount		% of Total Gross Loans
	(In thousands)
Single-family residential	$	5,486,136	98.7	%	$	74,067	1.3	%
Construction - speculative	138,583		98.9		1,477		1.1
Construction - custom	385,824		100.0		—		—
Land - acquisition & development	77,021		99.0		811		1.0
Land - consumer lot loans	105,986		97.6		2,637		2.4
Multi-family	915,544		99.8		1,742		0.2
Commercial real estate	586,230		99.1		5,106		0.9
Commercial & industrial	379,219		100.0		7		—
HELOC	115,247		99.3		795		0.7
Consumer	131,801		99.4		789		0.6
	$	8,321,591	99.0	%	$	87,431	1.0	%

The following tables provide information on covered loans based on credit quality indicators (defined in Note E ) as of March 31, 2015 and September 30, 2014:



March 31, 2015	Internally Assigned Grade															Total Net Loans
	Pass			Special mention			Substandard			Doubtful			Loss			Total Net Loans
	(In thousands)
Acquired non-impaired loans:
Single-family residential	$	19,975		$	—		$	775		$	—		$	—		$	20,750
Construction - speculative	—			—			—			—			—			—
Construction - custom	—			—			—			—			—			—
Land - acquisition & development	349			—			—			—			—			349
Land - consumer lot loans	72			—			—			—			—			72
Multi-family	903			—			—			—			—			903
Commercial real estate	14,188			—			8,779			—			—			22,967
Commercial & industrial	2,241			—			2,142			—			—			4,383
HELOC	10,093			—			—			—			—			10,093
Consumer	336			—			—			—			—			336
	$	48,157		$	—		$	11,696		$	—		$	—		$	59,853
Total grade as a % of total net loans	80.5		%	—		%	19.5		%	—		%	—		%

Acquired credit-impaired loans:
Pool 1 - Construction and land A&D	$	6,639		$	—		$	9,424		$	—		$	—		$	16,063
Pool 2 - Single-family residential	14,700			—			228			—			—			14,928
Pool 3 - Multi-family	49			—			409			—			—			458
Pool 4 - HELOC & other consumer	2,728			—			581			—			—			3,309
Pool 5 - Commercial real estate	32,425			685			24,224			1,734			—			59,068
Pool 6 - Commercial & industrial	3,423			—			1,916			—			—			5,339
	$	59,964		$	685		$	36,782		$	1,734		$	—		99,165
										Total covered loans						159,018
													Discount			(21,013		)
													Allowance			—
													Covered loans, net			$	138,005



September 30, 2014	Internally Assigned Grade															Total Net Loans
	Pass			Special mention			Substandard			Doubtful			Loss			Total Net Loans
	(In thousands)
Acquired non-impaired loans:
Single-family residential	$	21,311		$	—		$	1,756		$	—		$	—		$	23,067
Construction - speculative	—			—			—			—			—			—
Construction - custom	—			—			—			—			—			—
Land - acquisition & development	972			—			392			—			—			1,364
Land - consumer lot loans	73			—			—			—			—			73
Multi-family	6,598			—			—			—			—			6,598
Commercial real estate	26,940			115			24,281			—			—			51,336
Commercial & industrial	2,801			—			2,691			—			—			5,492
HELOC	11,777			—			—			—			—			11,777
Consumer	454			—			—			—			—			454
	$	70,926		$	115		$	29,120		$	—		$	—		$	100,161
Total grade as a % of total net loans	70.8		%	0.1		%	29.1		%	—		%	—		%

Acquired credit-impaired loans:
Pool 1 - Construction and land A&D	$	8,349		$	—		$	11,912		$	—		$	—		$	20,261
Pool 2 - Single-family residential	15,585			—			379			—			—			15,964
Pool 3 - Multi-family	52			—			471			—			—			523
Pool 4 - HELOC & other consumer	2,804			—			1,173			—			—			3,977
Pool 5 - Commercial real estate	33,909			700			29,782			—			—			64,391
Pool 6 - Commercial & industrial	3,509			—			3,892			525			—			7,926
	$	64,208		$	700		$	47,609		$	525		$	—		113,042
										Total covered loans						213,203
													Discount			(34,483		)
													Allowance			(2,244		)
													Covered loans, net			$	176,476

Summary of Impaired Loans Based on Type

The following table provides information on impaired loan balances and the related allowances by loan types as of March 31, 2015 and September 30, 2014:




March 31, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment
	(In thousands)
With no related allowance recorded:
Single-family residential	$	23,164	$	25,986	$	—		$	21,135
Construction - speculative	997		1,192		—			1,001
Land - acquisition & development	685		1,229		—			738
Land - consumer lot loans	1,353		1,451		—			1,144
Multi-family	1,079		1,079		—			1,080
Commercial real estate	9,768		14,145		—			9,587
Commercial & industrial	6,988		18,865		—			5,091
HELOC	1,112		1,898		—			931
Consumer	414		614		—			369
	45,560		66,459		—			41,076
With an allowance recorded:
Single-family residential	290,951		295,408		8,597			289,495
Construction - speculative	6,408		7,198		—			6,260
Land - acquisition & development	4,179		5,119		—			4,208
Land - consumer lot loans	12,501		12,884		—			12,376
Multi-family	3,862		3,862		—			3,547
Commercial real estate	20,673		21,323		—			19,160
HELOC	1,394		1,394		—			1,390
Consumer	123		293		—			124
	340,091		347,481		8,597		(1)	336,560
Total:
Single-family residential	314,115		321,394		8,597			310,630
Construction - speculative	7,405		8,390		—			7,261
Land - acquisition & development	4,864		6,348		—			4,946
Land - consumer lot loans	13,854		14,335		—			13,520
Multi-family	4,941		4,941		—			4,627
Commercial real estate	30,441		35,468		—			28,747
Commercial & industrial	6,988		18,865		—			5,091
HELOC	2,506		3,292		—			2,321
Consumer	537		907		—			493
	$	385,651	$	413,940	$	8,597	(1)	$	377,636

(1)Included in the general reserves.



September 30, 2014	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment
	(In thousands)
With no related allowance recorded:
Single-family residential	$	24,044	$	26,628	$	—		$	16,843
Construction - speculative	1,603		2,173		—			1,804
Land - acquisition & development	837		2,325		—			1,038
Land - consumer lot loans	974		1,072		—			713
Multi-family	1,111		1,111		—			327
Commercial real estate	13,234		20,085		—			11,720
Commercial & industrial	3,195		17,166		—			3,900
HELOC	1,019		1,730		—			612
Consumer	663		833		—			517
	46,680		73,123		—			37,474
With an allowance recorded:
Single-family residential	322,320		327,869		10,527			316,348
Construction - speculative	7,556		7,986		60			7,532
Land - acquisition & development	4,696		5,636		—			4,114
Land - consumer lot loans	13,002		13,385		—			12,858
Multi-family	5,243		5,463		—			4,957
Commercial real estate	34,159		35,028		—			18,572
HELOC	1,486		1,486		—			1,204
Consumer	43		214		—			79
	388,505		397,067		10,587		(1)	365,664
Total:
Single-family residential	346,364		354,497		10,527			333,191
Construction - speculative	9,159		10,159		60			9,336
Land - acquisition & development	5,533		7,961		—			5,152
Land - consumer lot loans	13,976		14,457		—			13,571
Multi-family	6,354		6,574		—			5,284
Commercial real estate	47,393		55,113		—			30,292
Commercial & industrial	3,195		17,166		—			3,900
HELOC	2,505		3,216		—			1,816
Consumer	706		1,047		—			596
	$	435,185	$	470,190	$	10,587	(1)	$	403,138


(1)	Includes $60,000 of specific reserves and $10,527,000 included in the general reserves.