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Loans Receivable
 6 Months Ended
Mar. 31, 2021
Receivables [Abstract]  
Loans Receivable Loans Receivable
For a detailed discussion of loans and credit quality, including accounting policies and the CECL methodology used to estimate the allowance for credit losses, see Note A "Summary of Significant Accounting Policies" above.

The Company's loans held for investment are divided into two portfolio segments, commercial loans and consumer loans, with each of those segments further split into loan classes for purposes of estimating the allowance for credit losses.

The following table is a summary of loans receivable by loan portfolio segment and class.

 March 31, 2021September 30, 2020
(In thousands)(In thousands)
Commercial loans
Multi-family$2,008,192 13.2 %$1,538,762 10.6 %
Commercial real estate2,226,560 14.6 1,895,086 13.1 
Commercial & industrial (1)2,471,823 16.2 2,132,160 14.7 
Construction2,495,961 16.3 2,403,276 16.6 
Land - acquisition & development185,024 1.2 193,745 1.3 
Total commercial loans9,387,560 61.5 8,163,029 56.3 
Consumer loans
Single-family residential4,828,535 31.6 5,304,689 36.7 
Construction - custom678,469 4.5 674,879 4.7 
   Land - consumer lot loans123,351 0.8 102,263 0.7 
   HELOC144,528 0.9 139,703 1.0 
   Consumer103,145 0.7 83,159 0.6 
Total consumer loans5,878,028 38.5 6,304,693 43.7 
Total gross loans15,265,588 100 %14,467,722 100 %
   Less:
      Allowance for credit losses on loans172,653 166,955 
      Loans in process1,982,225 1,456,072 
      Net deferred fees, costs and discounts75,287 52,378 
Total loan contra accounts2,230,165 1,675,405 
Net loans$13,035,423 $12,792,317 
(1) Includes $711,405,000 and $762,004,000 of SBA Payroll Protection Program loans as of March 31, 2021 and September 30, 2020, respectively.

The Company elected to exclude accrued interest receivable ("AIR") from the amortized cost basis of loans for disclosure purposes and from the calculations of estimated credit losses. As of March 31, 2021, and September 30, 2020, AIR for loans totaled $48,676,000 and $48,704,000, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated statements of financial condition.
Loans in the amount of $6,314,864,000 and $5,361,504,000 at March 31, 2021 and September 30, 2020, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") as part of our liquidity management strategy. The FHLB does not have the right to sell or re-pledge these loans.
The following table sets forth the amortized cost basis of non-accrual loans and loans 90 days or more past due and accruing.
 
 March 31, 2021September 30, 2020
 (In thousands, except ratio data)
Non-accrualNon-accrual with no ACL90 days or more past due and accruingNon-accrualNon-accrual with no ACL90 days or more past due and accruing
Commercial loans
Multi-family$— $— $— $— $— $— 
Commercial real estate9,226 — — 3,771 — — 
Commercial & industrial832 — — 329 — — 
Construction1,423 — — 1,669 — — 
Land - acquisition & development2,340 — — — — — 
   Total commercial loans13,821 — — 5,769 — — 
Consumer loans
Single-family residential25,599 — — 22,431 — 933 
Construction - custom— — — — — — 
Land - consumer lot loans177 — — 243 — — 
HELOC306 — — 553 — — 
Consumer52 — — 60 — 17 
   Total consumer loans26,134 — — 23,287 — 950 
Total non-accrual loans$39,955 $— $— $29,056 $— $950 
% of total loans0.30 %0.22 %

The Company recognized interest income on non-accrual loans of approximately $5,228,000 in the six months ended March 31, 2021. Had these loans been on accrual status and performed according to their original contract terms, the Company would have recognized interest income of approximately $769,000 for the six months ended March 31, 2021. Recognized interest income for the six months ended March 31, 2021 was higher than what otherwise would have been recognized in the period due to the collection of past due amounts. 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 loan delinquencies by loan portfolio and class.
 
March 31, 2021Days Delinquent Based on $ Amount of Loans% based
on $
Type of LoanLoans Receivable (Amortized Cost)Current306090Total Delinquent
(In thousands, except ratio data)
Commercial Loans
Multi-family$1,987,120 $1,986,645 $— $475 $— $475 0.02 %
Commercial real estate2,211,065 2,206,097 37 111 4,820 4,968 0.22 
Commercial & industrial2,452,585 2,450,623 1,175 — 787 1,962 0.08 
Construction925,017 923,864 — — 1,153 1,153 0.12 
Land - acquisition & development150,311 147,971 — — 2,340 2,340 1.56 
   Total commercial loans7,726,098 7,715,200 1,212 586 9,100 10,898 0.14 
Consumer Loans
Single-family residential4,802,575 4,776,367 5,868 960 19,380 26,208 0.55 
Construction - custom308,831 308,831 — — — — — 
Land - consumer lot loans122,211 121,858 93 185 75 353 0.29 
HELOC145,066 144,667 118 — 281 399 0.28 
Consumer103,294 102,979 174 2 139 315 0.30 
   Total consumer loans5,481,977 5,454,702 6,253 1,147 19,875 27,275 0.50 
Total Loans$13,208,075 $13,169,902 $7,465 $1,733 $28,975 $38,173 0.29 %
Delinquency %99.71%0.06%0.01%0.22%0.29%


September 30, 2020Days Delinquent Based on $ Amount of Loans% based
on $
Type of LoanLoans Receivable (Amortized Cost)Current306090Total Delinquent
(In thousands, except ratio data)
Commercial Loans
Multi-family$1,538,240 $1,538,240 $— $— $— $— — %
Commercial real estate1,884,688 1,884,210 — 195 283 478 0.03 
Commercial & industrial2,115,513 2,114,650 — 583 280 863 0.04 
Construction1,352,414 1,350,752 — — 1,662 1,662 0.12 
Land - acquisition & development153,571 153,571 — — — — — 
  Total commercial loans7,044,426 7,041,423 — 778 2,225 3,003 0.04 
Consumer Loans
Single-family residential5,293,962 5,267,608 3,922 3,108 19,324 26,354 0.50 
Construction - custom295,953 295,953 — — — — — 
Land - consumer lot loans101,394 101,029 152 — 213 365 0.36 
HELOC140,222 139,491 275 76 380 731 0.52 
Consumer83,315 82,959 121 11 224 356 0.43 
  Total consumer loans5,914,846 5,887,040 4,470 3,195 20,141 27,806 0.47 
Total Loans$12,959,272 $12,928,463 $4,470 $3,973 $22,366 $30,809 0.24 %
Delinquency %99.76%0.03%0.03%0.17%0.24%
The Company participated in the Small Business Administration’s Paycheck Protection Program ("PPP"). This program came about through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed by Congress to help small businesses keep their employees employed through the COVID-19 shelter in place orders. In 2020, the Company assisted over 6,500 businesses with more than $780,000,000 in PPP loans. Fiscal 2021 year to date we have assisted over 2,000 small businesses with $235,000,000 in PPP loans.
The Company has actively worked with its borrowers to modify consumer mortgage and commercial loans to provide payment deferrals as a result of the COVID-19 pandemic. The terms of the payment deferrals are generally 90 days for consumer mortgage loans and up to 180 days for commercial loans and borrowers may be eligible for multiple deferrals. Pursuant to the CARES Act, these loan modifications are not accounted for as TDRs. As of March 31, 2021, 45 mortgage loans totaling $14,000,000 and 10 commercial loans totaling $89,000,000 that had been modified remain in deferral. These loans are not considered past due until after the deferral period is over and scheduled payments have resumed.

Most TDRs are accruing and performing loans where the borrower has proactively approached the Company about modification due to temporary financial difficulties. 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, 2021, 97.7% of the Company's $78,282,000 in TDRs were classified as performing. As of March 31, 2021, single-family residential loans comprised 92.6% of TDRs.

We evaluate the credit quality of our loans based on regulatory risk ratings and also consider other factors. Based on this evaluation, the loans are assigned a grade and classified as follows:

•Pass – the credit does not meet one of the definitions below.

•Special mention – A special mention credit is considered to be currently protected from loss but is potentially weak. No loss of principal or interest is foreseen; however, proper supervision and management attention is required to deter further deterioration in the credit. Assets in this category constitute some undue and unwarranted credit risk but not to the point of justifying a risk rating of substandard. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.

•Substandard – A substandard credit is an unacceptable credit. Additionally, repayment in the normal course is in jeopardy due to the existence of one or more well defined weaknesses. In these situations, loss of principal is likely if the weakness is not corrected. A substandard asset is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Assets so classified will have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of the debt. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets risk rated substandard.

•Doubtful – A credit classified doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The probability of loss is high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

•Loss – Credits classified loss are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are identified as uncollectible. Partial charge-off versus full charge-off may be taken if the collateral offers some identifiable protection.

The following tables present by primary credit quality indicator, loan class, and year of origination, the amortized cost basis of loans receivable as of March 31, 2021.
Term Loans Amortized Cost Basis by Origination Year
YTD 20212020201920182017Prior to 2017Revolving LoansRevolving to Term LoansTotal Loans
Commercial loans
Multi-family
Pass$267,297 $507,301 $248,237 $295,532 $247,043 $344,441 $8,221 $— $1,918,072 
Special Mention— 1,769 — 4,039 2,844 1,934 — — 10,586 
Substandard— — 7,546 651 3,746 46,519 — — 58,462 
Total$267,297 $509,070 $255,783 $300,222 $253,633 $392,894 $8,221 $— $1,987,120 
Commercial real estate
Pass$252,949 $443,877 $282,617 $274,651 $240,058 $440,678 $2,203 $— $1,937,033 
Special Mention— 194 4,432 33,380 1,697 23,144 — — 62,847 
Substandard— 9,012 69,855 22,619 47,503 62,196 — — 211,185 
Total$252,949 $453,083 $356,904 $330,650 $289,258 $526,018 $2,203 $— $2,211,065 
Commercial & industrial
Pass$547,764 $631,137 $57,479 $52,576 $78,044 $159,841 $635,066 $11,944 $2,173,851 
Special Mention— 9,798 6,785 630 18 — 31,636 — 48,867 
Substandard12,363 48,216 4,126 6,443 94 48,126 110,227 272 229,867 
Total$560,127 $689,151 $68,390 $59,649 $78,156 $207,967 $776,929 $12,216 $2,452,585 
Construction
Pass$136,932 $311,836 $270,277 $67,312 $— $— $94,845 $— $881,202 
Substandard— 4,321 2,348 — 37,146 — — — 43,815 
Total$136,932 $316,157 $272,625 $67,312 $37,146 $— $94,845 $— $925,017 
Land - acquisition & development
Pass$22,127 $39,505 $28,645 $18,007 $14,789 $4,011 $5,314 $— $132,398 
Special Mention— — — — — 15,573 — — 15,573 
Substandard— — — — 2,340 — — — 2,340 
Total$22,127 $39,505 $28,645 $18,007 $17,129 $19,584 $5,314 $— $150,311 
Total commercial loans
Pass$1,227,069 $1,933,656 $887,255 $708,078 $579,934 $948,971 $745,649 $11,944 $7,042,556 
Special Mention— 11,761 11,217 38,049 4,559 40,651 31,636 — 137,873 
Substandard12,363 61,549 83,875 29,713 90,829 156,841 110,227 272 545,669 
Total$1,239,432 $2,006,966 $982,347 $775,840 $675,322 $1,146,463 $887,512 $12,216 $7,726,098 
Term Loans Amortized Cost Basis by Origination Year
YTD 20212020201920182017Prior to 2017Revolving LoansRevolving to Term LoansTotal Loans
Consumer loans
Single-family residential
Current$499,799 $825,204 $512,811 $458,566 $514,115 $1,965,872 $— $— $4,776,367 
30 days past due— — — 115 — 5,753 — — 5,868 
60 days past due— — — — — 960 — — 960 
90+ days past due— — — 466 169 18,745 — — 19,380 
Total$499,799 $825,204 $512,811 $459,147 $514,284 $1,991,330 $— $— $4,802,575 
Construction - custom
Current$50,146 $242,667 $14,955 $1,063 $— $— $— $— $308,831 
Total$50,146 $242,667 $14,955 $1,063 $— $— $— $— $308,831 
Land - consumer lot loans
Current$41,526 $35,849 $13,856 $5,304 $6,565 $18,758 $— $— $121,858 
30 days past due— — — — — 93 — — 93 
60 days past due— — — 185 — — — — 185 
90+ days past due— — — — — 75 — — 75 
Total$41,526 $35,849 $13,856 $5,489 $6,565 $18,926 $— $— $122,211 
HELOC
Current$— $— $— $— $— $5,917 $137,531 $1,219 $144,667 
30 days past due— — — — — 93 25 — 118 
90+ days past due— — — — — 30 251 — 281 
Total$— $— $— $— $— $6,040 $137,807 $1,219 $145,066 
Consumer
Current$10,891 $8,245 $1,011 $45,983 $— $14,000 $22,849 $— $102,979 
30 days past due— — 5 — 75 94 — — 174 
60 days past due— — 2 — — — — — 2 
90+ days past due— — 37 — 96 6 — — 139 
Total$10,891 $8,245 $1,055 $45,983 $171 $14,100 $22,849 $— $103,294 
Total consumer loans
Current$602,362 $1,111,965 $542,633 $510,916 $520,680 $2,004,547 $160,380 $1,219 $5,454,702 
30 days past due— — 5 115 75 6,033 25 — 6,253 
60 days past due— — 2 185 — 960 — — 1,147 
90+ days past due— — 37 466 265 18,856 251 — 19,875 
Total$602,362 $1,111,965 $542,677 $511,682 $521,020 $2,030,396 $160,656 $1,219 $5,481,977