Allowance for Losses on Loans (Tables)

9 Months Ended

Jun. 30, 2015

Summary of Activity in Allowance for Loan Losses

The following table summarizes the activity in the allowance for loan losses (excluding certain acquired and covered loans) for the three and nine months ended June 30, 2015 and 2014:



Three Months Ended June 30, 2015	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	54,762	$	(1,698	)	$	3,878	$	(4,938	)	$	52,004
Construction - speculative	5,445		—			—		488			5,933
Construction - custom	968		—			—		17			985
Land - acquisition & development	7,405		—			1		(1,634		)	5,772
Land - consumer lot loans	3,035		(276		)	187		53			2,999
Multi-family	4,673		—			—		362			5,035
Commercial real estate	6,734		(1,592		)	230		1,896			7,268
Commercial & industrial	21,146		(2,106		)	896		1,726			21,662
HELOC	850		(26		)	1		39			864
Consumer	3,305		(853		)	1,045		(408		)	3,089
	$	108,323	$	(6,551	)	$	6,238	$	(2,399	)	$	105,611



Three Months Ended June 30, 2014	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	63,348	$	(2,530	)	$	4,717	$	(3,175	)	$	62,360
Construction - speculative	6,773		—			$	2	(388		)	6,387
Construction - custom	1,599		—			—		79			1,678
Land - acquisition & development	6,027		—			85		843			6,955
Land - consumer lot loans	2,974		(86		)	—		(26		)	2,862
Multi-family	4,187		—			—		(46		)	4,141
Commercial real estate	5,924		(32		)	24		773			6,689
Commercial & industrial	20,403		(38		)	4		(1,673		)	18,696
HELOC	975		(18		)	—		58			1,015
Consumer	2,721		(696		)	787		555			3,367
	$	114,931	$	(3,400	)	$	5,619	$	(3,000	)	$	114,150



Nine Months Ended June 30, 2015	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	62,763	$	(4,801	)	$	10,553	$	(16,511	)	$	52,004
Construction - speculative	6,742		(388		)	$	75	(496		)	5,933
Construction - custom	1,695		—			—		(710		)	985
Land - acquisition & development	5,592		(38		)	206		12			5,772
Land - consumer lot loans	3,077		(363		)	221		64			2,999
Multi-family	4,248		—			220		567			5,035
Commercial real estate	7,548		(1,619		)	711		628			7,268
Commercial & industrial	16,527		(2,461		)	948		6,648			21,662
HELOC	928		(26		)	1		(39		)	864
Consumer	3,227		(1,981		)	2,394		(551		)	3,089
	$	112,347	$	(11,677	)	$	15,329	$	(10,388	)	$	105,611



Nine Months Ended June 30, 2014	Beginning Allowance		Charge-offs			Recoveries		Provision & Transfers			Ending Allowance
	(In thousands)
Single-family residential	$	64,184	$	(7,307	)	$	15,631	$	(10,148	)	$	62,360
Construction - speculative	8,407		(938		)	$	97	(1,179		)	6,387
Construction - custom	882		—			—		796			1,678
Land - acquisition & development	9,165		(541		)	823		(2,492		)	6,955
Land - consumer lot loans	3,552		(559		)	22		(153		)	2,862
Multi-family	3,816		—			—		325			4,141
Commercial real estate	5,595		(105		)	24		1,175			6,689
Commercial & industrial	16,614		(730		)	3,277		(465		)	18,696
HELOC	1,002		(18		)	—		31			1,015
Consumer	3,524		(2,788		)	2,871		(240		)	3,367
	$	116,741	$	(12,986	)	$	22,745	$	(12,350	)	$	114,150

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 June 30, 2015 and September 30, 2014:



June 30, 2015	Loans Collectively Evaluated for Impairment						Loans Individually Evaluated for Impairment
	Allowance Allocation		Recorded Investment of Loans (1)		Ratio		Allowance Allocation		Recorded Investment of Loans (1)		Ratio
	(In thousands)						(In thousands)
Single-family residential	$	52,004	$	5,497,635	1.0	%	$	—	$	49,305	—	%
Construction - speculative	5,933		110,727		5.4		—		6,983		—
Construction - custom	985		204,914		0.5		—		—		—
Land - acquisition & development	5,772		68,234		8.5		—		3,237		—
Land - consumer lot loans	2,999		91,392		3.3		—		11,044		—
Multi-family	5,035		1,008,452		0.5		—		4,584		—
Commercial real estate	7,268		685,198		1.1		—		11,133		—
Commercial & industrial	21,662		484,902		4.5		—		—		—
HELOC	864		121,241		0.7		—		1,633		—
Consumer	3,089		205,862		1.5		—		89		—
	$	105,611	$	8,478,557	1.3	%	$	—	$	88,008	—	%


(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
	Allowance Allocation		Recorded Investment of Loans (1)		Ratio		Allowance Allocation		Recorded Investment of Loans (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 (net of LIP and excluding covered loans) based on credit quality indicators as defined above as of June 30, 2015 and September 30, 2014.



June 30, 2015	Internally Assigned Grade															Total
	Pass			Special mention			Substandard			Doubtful			Loss			Gross Loans
	(In thousands)
Non-acquired loans
Single-family residential	$	5,456,628		$	—		$	90,313		$	—		$	—		$	5,546,941
Construction - speculative	114,706			—			3,005			—			—			117,711
Construction - custom	204,914			—			—			—			—			204,914
Land - acquisition & development	67,726			—			5,130			—			—			72,856
Land - consumer lot loans	102,007			—			429			—			—			102,436
Multi-family	1,009,785			—			3,960			—			—			1,013,745
Commercial real estate	682,908			5,068			9,984			—			—			697,960
Commercial & industrial	411,925			965			38,583			—			—			451,473
HELOC	122,626			—			248			—			—			122,874
Consumer	205,950			—			—			—			—			205,950
	8,379,175			6,033			151,652			—			—			8,536,860

Non-impaired acquired loans
Single-family residential	12,872			—			23			—			—			12,895
Land - acquisition & development	651			—			377			—			—			1,028
Land - consumer lot loans	2,355			—			117			—			—			2,472
Multi-family	3,692			—			—			—			—			3,692
Commercial real estate	86,529			511			14,502			—			—			101,542
Commercial & industrial	54,243			1,228			2,141			—			—			57,612
HELOC	6,414			—			—			—			—			6,414
Consumer	2,484			—			413			—			—			2,897
	169,240			1,739			17,573			—			—			188,552

Credit-impaired acquired loans
Pool 1 - Construction and land A&D	6,655			—			2,305			—			—			8,960
Pool 2 - Single-family residential	320			—			—			—			—			320
Pool 3 - Multi-family	—			—			—			—			—			—
Pool 4 - HELOC & other consumer	8,598			—			638			—			—			9,236
Pool 5 - Commercial real estate	47,715			—			22,811			—			—			70,526
Pool 6 - Commercial & industrial	2,931			—			375			—			—			3,306
Total credit impaired acquired loans	66,219			—			26,129			—			—			92,348
Total gross loans	$	8,614,634		$	7,772		$	195,354		$	—		$	—		$	8,817,760

Total grade as a % of total gross loans	97.7		%	0.1		%	2.2		%	—		%	—		%



September 30, 2014	Internally Assigned Grade															Total
	Pass			Special mention			Substandard			Doubtful			Loss			Gross Loans
	(In thousands)
Non-acquired loans
Single-family residential	$	5,424,624		$	2,793		$	130,339		$	—		$	—		$	5,557,756
Construction - speculative	81,931			—			5,104			—			—			87,035
Construction - custom	192,098			—			—			—			—			192,098
Land - acquisition & development	61,949			—			6,117			—			—			68,066
Land - consumer lot loans	107,979			—			610			—			—			108,589
Multi-family	887,639			—			4,556			—			—			892,195
Commercial real estate	495,892			1,971			31,441			—			—			529,304
Commercial & industrial	359,168			14,740			5,265			—			—			379,173
HELOC	115,794			—			248			—			—			116,042
Consumer	132,444			—			241			—			—			132,685
	7,859,518			19,504			183,921			—			—			8,062,943

Non-impaired acquired loans
Single-family residential	11,716			—			—			—			—			11,716
Land - acquisition & development	503			—			402			—			—			905
Land - consumer lot loans	2,502			—			—			—			—			2,502
Multi-family	2,999			—			—			—			—			2,999
Commercial real estate	88,940			2,571			6,353			—			—			97,864
Commercial & industrial	36,309			13,642			1,375			58			—			51,384
HELOC	8,274			—			—			—			—			8,274
Consumer	5,670			—			—			—			—			5,670
	156,913			16,213			8,130			58			—			181,314

Credit-impaired acquired loans
Pool 1 - Construction and land A&D	1,251			—			330			—			—			1,581
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	48,867			2,143			12,702			—			—			63,712
Pool 6 - Commercial & industrial	643			—			2,833			—			—			3,476
Total credit impaired acquired loans	61,280			2,143			15,865			—			—			79,288
Total gross loans	$	8,077,711		$	37,860		$	207,916		$	58		$	—		$	8,323,545

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):



June 30, 2015	Performing Loans				Non-Performing Loans
	Amount		% of Total Gross Loans		Amount		% of Total Gross Loans
	(In thousands)
Single-family residential	$	5,490,303	99.0	%	$	56,638	1.0	%
Construction - speculative	116,949		99.4		762		0.6
Construction - custom	204,559		99.8		355		0.2
Land - acquisition & development	71,471		100.0		—		—
Land - consumer lot loans	101,128		98.4		1,308		1.6
Multi-family	1,012,250		99.8		786		0.2
Commercial real estate	693,479		99.7		2,852		0.3
Commercial & industrial	450,124		99.8		1,205		0.2
HELOC	121,985		99.3		889		0.7
Consumer	205,437		99.8		513		0.2
	$	8,467,685	99.2	%	$	65,308	0.8	%



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 June 30, 2015 and September 30, 2014:



June 30, 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	$	15,300		$	—		$	593		$	—		$	—		$	15,893
Commercial & industrial	—			—			28			—			—			28
HELOC	9,214			—			—			—			—			9,214
	$	24,514		$	—		$	621		$	—		$	—		$	25,135
Total grade as a % of total net loans	97.5		%	—		%	2.5		%	—		%	—		%

Acquired credit-impaired loans:
Pool 1 - Construction and land A&D	$	151		$	—		$	1,613		$	—		$	—		$	1,764
Pool 2 - Single-family residential	14,375			—			331			—			—			14,706
Pool 3 - Multi-family	48			—			377			—			—			425
Pool 4 - HELOC & other consumer	2,611			—			—			—			—			2,611
Pool 5 - Commercial real estate	23,805			—			11,048			—			—			34,853
Pool 6 - Commercial & industrial	394			—			1,276			—			—			1,670
	$	41,384		$	—		$	14,645		$	—		$	—		56,029
										Total covered loans						81,164
													Discount			(3,853		)
													Allowance			—
													Covered loans, net			$	77,311



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
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 June 30, 2015 and September 30, 2014:




June 30, 2015	Recorded Investment		Unpaid Principal Balance		Related Allowance			Average Recorded Investment
	(In thousands)
With no related allowance recorded:
Single-family residential	$	21,524	$	24,151	$	—		$	20,724
Construction - speculative	613		808		—			615
Construction - custom	355		355		—			178
Land - acquisition & development	680		1,223		—			683
Land - consumer lot loans	1,101		1,187		—			969
Multi-family	1,531		1,531		—			1,138
Commercial real estate	10,416		14,797		—			9,795
Commercial & industrial	4,340		18,276		—			5,664
HELOC	1,008		1,819		—			905
Consumer	414		627		—			414
	41,982		64,774		—			41,085
With an allowance recorded:
Single-family residential	275,179		279,043		8,057			275,889
Construction - speculative	6,371		7,161		—			6,389
Construction - custom	—		—		—			—
Land - acquisition & development	3,536		4,476		—			3,571
Land - consumer lot loans	11,540		11,805		—			11,627
Multi-family	3,843		3,843		—			3,853
Commercial real estate	19,251		21,206		—			19,962
Commercial & industrial	—		—		—			—
HELOC	1,394		1,394		—			1,394
Consumer	120		291		—			121
	321,234		329,219		8,057		(1)	322,806
Total:
Single-family residential	296,703		303,194		8,057			296,613
Construction - speculative	6,984		7,969		—			7,004
Construction - custom	355		355		—			178
Land - acquisition & development	4,216		5,699		—			4,254
Land - consumer lot loans	12,641		12,992		—			12,596
Multi-family	5,374		5,374		—			4,991
Commercial real estate	29,667		36,003		—			29,757
Commercial & industrial	4,340		18,276		—			5,664
HELOC	2,402		3,213		—			2,299
Consumer	534		918		—			535
	$	363,216	$	393,993	$	8,057	(1)	$	363,891

(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.