Loans Receivable

The following table is a summary of loans receivable.



	March 31, 2018				September 30, 2017
	(In thousands)				(In thousands)
Gross loans by category
Single-family residential	$	5,705,350	45.5	%	$	5,711,004	46.8	%
Construction	1,732,202		13.8		1,597,996		13.1
Construction - custom	597,671		4.8		602,631		4.9
Land - acquisition & development	141,628		1.1		124,308		1.0
Land - consumer lot loans	102,779		0.8		104,405		0.9
Multi-family	1,328,049		10.6		1,303,148		10.7
Commercial real estate	1,443,437		11.5		1,434,610		11.8
Commercial & industrial	1,151,108		9.2		1,093,360		9.0
HELOC	135,119		1.1		144,850		1.2
Consumer	202,911		1.6		85,075		0.7
Total gross loans	12,540,254		100	%	12,201,387		100	%
Less:
Allowance for loan losses	127,576				123,073
Loans in process	1,141,018				1,149,934
Net deferred fees, costs and discounts	47,572				45,758
Total loan contra accounts	1,316,166				1,318,765
Net loans	$	11,224,088			$	10,882,622

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



	March 31, 2018					September 30, 2017
	(In thousands)
Non-accrual loans:
Single-family residential	$	25,319		47.1	%	$	27,930		56.3	%
Construction	2,296			4.3		—			—
Construction - custom	—			—		91			0.2
Land - acquisition & development	2,004			3.7		296			0.6
Land - consumer lot loans	1,045			1.9		605			1.2
Multi-family	—			—		139			0.3
Commercial real estate	9,527			17.7		11,815			23.8
Commercial & industrial	13,362			24.8		8,082			16.3
HELOC	217			0.4		531			1.1
Consumer	38			0.1		91			0.2
Total non-accrual loans	$	53,808		100	%	$	49,580		100	%
% of total net loans	0.48		%			0.46		%

The Company recognized interest income on non-accrual loans of approximately $3,228,000 in the six months ended March 31, 2018. Had these loans been on accrual status and performed according to their original contract terms, the Company would have recognized interest income of approximately $1,073,000 for the six months ended March 31, 2018. Interest cash flows collected on non-accrual loans vary from period to period as those loans are brought current or are paid off.

The following tables provide details regarding delinquent loans.



March 31, 2018	Loans Receivable		Days Delinquent Based on $ Amount of Loans										% based on $
Type of Loan	Net of Loans In Process		Current		30		60		90		Total Delinquent		% based on $
	(In thousands)
Single-family residential	$	5,704,505	$	5,675,605	$	6,268	$	3,621	$	19,011	$	28,900	0.51	%
Construction	916,662		913,419		948		—		2,295		3,243		0.35
Construction - custom	295,699		295,699		—		—		—		—		—
Land - acquisition & development	119,063		117,200		—		—		1,863		1,863		1.56
Land - consumer lot loans	102,705		101,837		328		—		540		868		0.85
Multi-family	1,328,027		1,327,864		29		134		—		163		0.01
Commercial real estate	1,443,437		1,441,459		1,275		98		605		1,978		0.14
Commercial & industrial	1,151,108		1,143,385		1,850		5,752		121		7,723		0.67
HELOC	135,119		134,866		163		30		60		253		0.19
Consumer	202,911		202,413		348		127		23		498		0.25
Total Loans	$	11,399,236	$	11,353,747	$	11,209	$	9,762	$	24,518	$	45,489	0.40	%
Delinquency %			99.60%		0.10%		0.09%		0.22%		0.40%



September 30, 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 Delinquent		% based on $
	(In thousands)
Single-family residential	$	5,709,690	$	5,671,933	$	10,925	$	4,810	$	22,022	$	37,757	0.66	%
Construction	793,959		793,959		—		—		—		—		—
Construction - custom	277,599		277,508		—		—		91		91		0.03
Land - acquisition & development	104,856		104,526		—		—		330		330		0.31
Land - consumer lot loans	104,335		103,389		112		680		154		946		0.91
Multi-family	1,303,119		1,302,720		5		255		139		399		0.03
Commercial real estate	1,434,610		1,432,052		507		—		2,051		2,558		0.18
Commercial & industrial	1,093,360		1,092,735		—		51		574		625		0.06
HELOC	144,850		143,974		221		342		313		876		0.60
Consumer	85,075		84,644		245		107		79		431		0.51
Total Loans	$	11,051,453	$	11,007,440	$	12,015	$	6,245	$	25,753	$	44,013	0.40	%
Delinquency %			99.60%		0.11%		0.06%		0.23%		0.40%

The percentage of total delinquent loans was 0.40% as of September 30, 2017 and 0.40% as of March 31, 2018. There are no loans greater than 90 days delinquent and still accruing interest as of either date.

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



	Three Months Ended March 31,
	2018					2017
		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	12	$	2,183	$	2,183	8	$	1,712	$	1,712
	12	$	2,183	$	2,183	8	$	1,712	$	1,712



	Six Months Ended March 31,
	2018					2017
		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	$	4,195	$	4,195	20	$	3,846	$	3,846
Land - consumer lot loans	—	—		—		1	204		204
Commercial & Industrial	3	7,256		7,256		—	—		—
HELOC	—	—		—		1	228		228
	23	$	11,451	$	11,451	22	$	4,278	$	4,278

The following table provides 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,
	2018			2017
	Number of	Recorded		Number of	Recorded
	Contracts	Investment		Contracts	Investment
	(In thousands)			(In thousands)
Trouble Debt Restructurings That Subsequently Defaulted:
Single-family residential	1	$	162	7	$	1,192
	1	$	162	7	$	1,192



	Six Months Ended March 31,
	2018			2017
	Number of	Recorded		Number of	Recorded
	Contracts	Investment		Contracts	Investment
	(In thousands)			(In thousands)
Troubled Debt Restructurings That Subsequently Defaulted:
Single-family residential	2	$	206	13	$	3,185
Commercial real estate	—	—		2	267
	2	$	206	15	$	3,452

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, 2018, 97.7% of the Company's $190,519,000 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, 2018, single-family residential loans comprised 85.5% 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 Company's remaining outstanding balance of assets subject to FDIC loss share agreements was $54,626,000 (including $50,777,000 of loans receivable) at March 31, 2018 compared to $67,914,000 (including $61,810,000 of loans receivable) as of September 30, 2017. As of March 31, 2018, the associated FDIC indemnification asset was $0 compared to a balance of $8,967,000 as of September 30, 2017. The FDIC clawback liability was $39,906,000 as of March 31, 2018 and $37,143,000 as of September 30, 2017. In March 2018, the Company reached a preliminary agreement with the FDIC to terminate its remaining FDIC loss share agreements early, which relate to the Horizon Bank and Home Valley Bank acquisitions. The preliminary agreement is consistent with the estimates recorded by the Company as of December 31, 2017 and final settlement is expected to occur in the third fiscal quarter of 2018. All future recoveries, gains, losses and expenses related to the previously covered assets will now be recognized entirely by the Company and the FDIC will no longer share in such gains or losses.