Loans Receivable

The following table is a summary of loans receivable.



	March 31, 2017				September 30, 2016
	(In thousands)				(In thousands)
Gross loans by category
Single-family residential	$	5,693,072	48.9	%	$	5,658,830	51.7	%
Construction	1,311,635		11.3		1,110,411		10.1
Construction - custom	527,319		4.5		473,069		4.3
Land - acquisition & development	118,726		1.0		118,497		1.1
Land - consumer lot loans	101,227		0.9		104,567		1.0
Multi-family	1,266,911		10.9		1,124,290		10.3
Commercial real estate	1,296,039		11.1		1,093,639		10.0
Commercial & industrial	1,071,629		9.2		978,589		8.9
HELOC	146,172		1.3		149,716		1.4
Consumer	107,759		0.9		139,000		1.3
Total gross loans	11,640,489		100.0	%	10,950,608		100.0	%
Less:
Allowance for loan losses	121,922				113,494
Loans in process	1,009,937				879,484
Net deferred fees, costs and discounts	45,608				46,710
Total loan contra accounts	1,177,467				1,039,688
Net loans	$	10,463,022			$	9,910,920

The following table sets forth information regarding non-accrual loans.



	March 31, 2017				September 30, 2016
	(In thousands)
Non-accrual loans:
Single-family residential	$	34,373	60.1	%	$	33,148	78.2	%
Construction - custom	240		0.4		—		—
Land - acquisition & development	80		0.1		58		0.1
Land - consumer lot loans	1,129		2.0		510		1.2
Multi-family	1,364		2.4		776		1.8
Commercial real estate	10,507		18.4		7,100		16.7
Commercial & industrial	8,864		15.5		583		1.4
HELOC	583		1.0		239		0.6
Consumer	55		0.1		—		—
Total non-accrual loans	$	57,195	100	%	$	42,414	100	%

The Company recognized interest income on non-accrual loans of approximately $1,094,000 in the six months ended March 31, 2017. Had these loans been on accrual status and performed according to their original contract terms, the Company would have recognized interest income of approximately $1,134,000 for the six months ended March 31, 2017. Interest cash flows collected on non-accrual loans varies from period to period as those loans are brought current or get paid off.

For acquired loans included in the non-accrual loan table above, interest income is still recognized on such loans through accretion of the difference between the carrying amount of the loans and the expected cash flows.

The following tables provide details regarding delinquent loans.



March 31, 2017	Loans Receivable		Days Delinquent Based on $ Amount of Loans										% based on $
Type of Loan	Net of Loans In Process		Current		30		60		90		Total		% based on $
	(In thousands)
Single-family residential	$	5,692,305	$	5,639,158	$	13,644	$	7,660	$	31,843	$	53,147	0.93	%
Construction	593,479		592,877		601		—		—		601		0.10
Construction - custom	251,906		251,666		—		—		240		240		0.10
Land - acquisition & development	103,280		103,018		262		—		—		262		0.25
Land - consumer lot loans	101,168		99,907		360		333		568		1,261		1.25
Multi-family	1,266,845		1,265,622		—		—		1,224		1,224		0.10
Commercial real estate	1,296,019		1,289,677		1,802		298		4,242		6,342		0.49
Commercial & industrial	1,071,622		1,066,658		4,964		—		—		4,964		0.46
HELOC	146,169		145,355		124		20		670		814		0.56
Consumer	107,759		107,158		405		98		98		601		0.56
Total Loans	$	10,630,552	$	10,561,096	$	22,162	$	8,409	$	38,885	$	69,456	0.65	%
Delinquency %			99.35%		0.21%		0.08%		0.37%		0.65%



September 30, 2016	Loans Receivable		Days Delinquent Based on $ Amount of Loans										% based on $
Type of Loan	Net of Loans In Process		Current		30		60		90		Total		% based on $
	(In thousands)
Single-family residential	$	5,658,122	$	5,601,457	$	20,916	$	5,271	$	30,478	$	56,665	1.00	%
Construction	498,450		498,450		—		—		—		—		—
Construction - custom	229,957		229,419		538		—		—		538		0.23
Land - acquisition & development	94,928		94,928		—		—		—		—		—
Land - consumer lot loans	104,534		102,472		816		687		559		2,062		1.97
Multi-family	1,124,290		1,122,307		1,190		399		394		1,983		0.18
Commercial real estate	1,093,549		1,088,680		69		325		4,475		4,869		0.45
Commercial & industrial	978,582		978,540		—		42		—		42		—
HELOC	149,713		148,513		763		164		273		1,200		0.80
Consumer	138,999		138,078		715		126		80		921		0.66
Total Loans	$	10,071,124	$	10,002,844	$	25,007	$	7,014	$	36,259	$	68,280	0.68	%
Delinquency %			99.32%		0.25%		0.07%		0.36%		0.68%

The percentage of total delinquent loans decreased from 0.68% as of September 30, 2016 to 0.65% as of March 31, 2017 and there are no loans greater than 90 days delinquent and still accruing interest as of either date.

The following tables provide information related to loans that were restructured in a troubled debt restructuring ("TDR") during the periods presented:



	Three Months Ended March 31,
	2017					2016
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
		(In thousands)					(In thousands)
Troubled Debt Restructurings:
Single-family residential	8	$	1,712	$	1,712	7	$	1,101	$	1,101
	8	$	1,712	$	1,712	7	$	1,101	$	1,101



	Six Months Ended March 31,
	2017					2016
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
	Contracts	Investment		Investment		Contracts	Investment		Investment
		(In thousands)					(In thousands)
Troubled Debt Restructurings:
Single-family residential	20	$	3,846	$	3,846	10	$	1,830	$	1,830
Land - consumer lot loans	1	204		204		—	—		—
Commercial real estate	—	—		—		5	965		965
HELOC	1	228		228		—	—		—
	22	$	4,278	$	4,278	15	$	2,795	$	2,795

The following tables provide information on payment defaults occurring during the periods presented where the loan had been modified in a TDR within 12 months of the payment default.



	Three Months Ended March 31,
	2017			2016
	Number of	Recorded		Number of	Recorded
	Contracts	Investment		Contracts	Investment
	(In thousands)			(In thousands)
TDRs That Subsequently Defaulted:
Single-family residential	7	$	1,192	6	$	871
Land - consumer lot loans	—	—		1	146
Commercial real estate	—	—		1	152
	7	$	1,192	8	$	1,169



	Six Months Ended March 31,
	2017			2016
	Number of	Recorded		Number of	Recorded
	Contracts	Investment		Contracts	Investment
	(In thousands)			(In thousands)
TDRs That Subsequently Defaulted:
Single-family residential	13	$	3,185	8	$	1,095
Land - consumer lot loans	—	—		1	146
Commercial real estate	2	267		1	152
	15	$	3,452	10	$	1,393

Most loans restructured in TDRs are accruing and performing loans where the borrower has proactively approached the Company about modification due to temporary financial difficulties. As of March 31, 2017, 95.0% of the Company's $233,901,000 in TDRs were classified as performing. Each request for modification is individually evaluated for merit and likelihood of success. The concession granted in a loan modification is typically a payment reduction through a rate reduction of between 100 to 200 basis points for a specific term, usually six to twenty four months. Interest-only payments may also be approved during the modification period. Principal forgiveness is not an available option for restructured loans. As of March 31, 2017, single-family residential loans comprised 87.6% of TDRs.

The Company reserves for restructured loans within its allowance for loan loss methodology by taking into account the following performance indicators: 1) time since modification, 2) current payment status and 3) geographic area.

The remaining outstanding balance of covered loans was $24,428,000 at March 31, 2017 compared to $28,974,000 as of September 30, 2016. The FDIC loss share coverage for single family residential loans related to the Horizon Bank and Home Valley Bank acquisitions will continue for another four years.

The following table shows activity for the FDIC indemnification asset:



	Six Months Ended March 31, 2017			Twelve Months Ended September 30, 2016
	(In thousands)
Balance at beginning of period	$	12,769		$	16,275
Payments made (received)	(264		)	(1,730		)
Amortization	(802		)	(2,012		)
Accretion	118			236
Balance at end of period	$	11,821		$	12,769