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Allowance for Losses on Loans

6 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Allowance for Losses on Loans

Allowance for Losses on Loans

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."

The following tables summarize the activity in the allowance for loan losses by loan portfolio segment and class. 

Three Months Ended March 31, 2021			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	14,363					$	—					$	—					$	3,413					$	17,776
Commercial real estate			23,496						—						1,457						1,869						26,822
Commercial & industrial			44,317						(18)						11						3,484						47,794
Construction			26,365						—						—						(3,816)						22,549
Land - acquisition & development			10,666						—						410						(573)						10,503
Total commercial loans			119,207						(18)						1,878						4,377						125,444
Consumer loans
Single-family residential			38,613						(106)						497						(3,896)						35,108
Construction - custom			3,594						—						—						(346)						3,248
Land - consumer lot loans			2,958						—						7						327						3,292
HELOC			2,362						—						—						(136)						2,226
Consumer			3,455						(84)						290						(326)						3,335
Total consumer loans			50,982						(190)						794						(4,377)						47,209
Total loans			$	170,189					$	(208)					$	2,672					$	—					$	172,653

Three Months Ended March 31, 2020			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers (1)						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	10,506					$	—					$	—					$	1,236					$	11,742
Commercial real estate			13,067						(13)						1,020						565						14,639
Commercial & industrial			33,676						(129)						57						4,972						38,576
Construction			21,919						—						5						1,424						23,348
Land - acquisition & development			10,413						—						126						(140)						10,399
Total commercial loans			89,581						(142)						1,208						8,057						98,704
Consumer loans
Single-family residential			46,356						—						192						268						46,816
Construction - custom			2,930						—						—						245						3,175
Land - consumer lot loans			2,567						(77)						476						(388)						2,578
HELOC			2,034						—						1						211						2,246
Consumer			4,045						(230)						360						(593)						3,582
Total consumer loans			57,932						(307)						1,029						(257)						58,397
Total loans			$	147,513					$	(449)					$	2,237					$	7,800					$	157,101

(1) Provision & transfer amounts within the table do not include the provision for unfunded commitments of $400,000

Six Months Ended March 31, 2021			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers (1)						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	13,853					$	—					$	—					$	3,923					$	17,776
Commercial real estate			22,516						—						2,246						2,060						26,822
Commercial & industrial			38,665						(20)						61						9,088						47,794
Construction			24,156						—						—						(1,607)						22,549
Land - acquisition & development			10,733						—						445						(675)						10,503
Total commercial loans			109,923						(20)						2,752						12,789						125,444
Consumer loans
Single-family residential			45,186						(106)						1,276						(11,248)						35,108
Construction - custom			3,555						—						—						(307)						3,248
Land - consumer lot loans			2,729						—						14						549						3,292
HELOC			2,571						—						—						(345)						2,226
Consumer			2,991						(234)						516						62						3,335
Total consumer loans			57,032						(340)						1,806						(11,289)						47,209
Total loans			$	166,955					$	(360)					$	4,558					$	1,500					$	172,653

(1) Provision & transfer amounts within the table do not include the provision for unfunded commitments of $1,500,000

Six Months Ended March 31, 2020			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers (1)						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	10,404					$	—					$	498					$	840					$	11,742
Commercial real estate			13,024						(111)						1,388						338						14,639
Commercial & industrial			32,235						(179)						201						6,319						38,576
Construction			22,768						—						59						521						23,348
Land - acquisition & development			10,904						(11)						1,586						(2,080)						10,399
Total commercial loans			89,335						(301)						3,732						5,938						98,704
Consumer loans
Single-family residential			47,771						(15)						453						(1,393)						46,816
Construction - custom			2,880						—						—						295						3,175
Land - consumer lot loans			2,635						(147)						486						(396)						2,578
HELOC			2,048						—						94						104						2,246
Consumer			4,615						(604)						669						(1,098)						3,582
Total consumer loans			59,949						(766)						1,702						(2,488)						58,397
Total loans			$	149,284					$	(1,067)					$	5,434					$	3,450					$	157,101

(1) Provision & transfer amounts within the table do not include the provision for unfunded commitments of $1,000,000

The Company recorded no provision for credit losses for the three months ended March 31, 2021, compared with a provision for credit losses of $8,200,000 for the three months ended March 31, 2020. The relatively large credit loss provision for the three months ended March 31, 2020 is primarily due to the onset of the global pandemic. The Company recorded a provision

for credit losses of $3,000,000 for the six months ended March 31, 2021, compared with a provision for credit losses of $4,450,000 for the six months ended March 31, 2020. Recoveries, net of charge-offs, totaled $2,464,000 for the three months ended March 31, 2021, compared to net recoveries of $1,788,000 during the three months ended March 31, 2020. Recoveries, net of charge-offs, totaled $4,198,000 for the six months ended March 31, 2021, compared to net recoveries of $4,367,000 during the six months ended March 31, 2020. No allowance was recorded as of March 31, 2021 or as of September 30, 2020 for the $695,752,000 and $745,081,000 of PPP loans in the portfolio on each date, respectively, which are included in the commercial & industrial loan category, due to the government guarantee.

Non-performing assets were $48,943,000, or 0.25% of total assets, at March 31, 2021, compared to $37,695,000, or 0.20% of total assets, at September 30, 2020. Non-accrual loans were $39,955,000 at March 31, 2021, compared to $29,056,000 at September 30, 2020. Delinquencies, as a percent of total loans, were 0.29% at March 31, 2021, compared to 0.24% at September 30, 2020.

The Company has an asset quality review function that analyzes its loan portfolio and reports the results of the review to its Board of Directors on a quarterly basis. The single-family residential, HELOC and consumer portfolios are evaluated based on their performance as a pool of loans, since no single loan is individually significant or judged by its risk rating, size or potential risk of loss. The construction, land, multi-family, commercial real estate and commercial and industrial loans are risk rated on a loan by loan basis to determine the relative risk inherent in specific borrowers or loans. Based on that risk rating, the loans are assigned a grade and classified as described in Note D "Loans Receivable."

The following tables provide the amortized cost of loans receivable based on risk rating categories as previously defined.

March 31, 2021			Internally Assigned Grade
			Pass						Special mention						Substandard						Doubtful						Loss						Total
			(In thousands, except ratio data)
Loan type
Commercial loans
Multi-family			$	1,918,072					$	10,586					$	58,462					$	—					$	—					$	1,987,120
Commercial real estate			1,937,033						62,847						211,185						—						—						2,211,065
Commercial & industrial			2,173,851						48,867						229,867						—						—						2,452,585
Construction			881,202						—						43,815						—						—						925,017
Land - acquisition & development			132,398						15,573						2,340						—						—						150,311
Total commercial loans			7,042,556						137,873						545,669						—						—						7,726,098
Consumer loans
Single-family residential			4,773,261						189						29,125						—						—						4,802,575
Construction - custom			308,831						—						—						—						—						308,831
Land - consumer lot loans			122,034						—						177						—						—						122,211
HELOC			143,167						—						1,899						—						—						145,066
Consumer			103,274						—						20						—						—						103,294
Total consumer loans			5,450,567						189						31,221						—						—						5,481,977
Total			$	12,493,123					$	138,062					$	576,890					$	—					$	—					$	13,208,075
Total grade as a % of total loans			94.59		%				1.05		%				4.37		%				—		%				—		%

September 30, 2020			Internally Assigned Grade
			Pass						Special mention						Substandard						Doubtful						Loss						Total Gross Loans
			(In thousands, except ratio data)
Loan type
Commercial loans
Multi-family			$	1,506,692					$	13,721					$	17,827					$	—					$	—					$	1,538,240
Commercial real estate			1,681,230						92,184						111,274						—						—						1,884,688
Commercial & industrial			1,898,709						64,695						152,109						—						—						2,115,513
Construction			1,187,786						61,178						103,450						—						—						1,352,414
Land - acquisition & development			137,998						15,573						—						—						—						153,571
Total commercial loans			6,412,415						247,351						384,660						—						—						7,044,426
Consumer loans
Single-family residential			5,270,666						192						23,104						—						—						5,293,962
Construction - custom			295,953						—						—						—						—						295,953
Land - consumer lot loans			101,151						—						243						—						—						101,394
HELOC			139,646						—						576						—						—						140,222
Consumer			83,304						—						11						—						—						83,315
Total consumer loans			5,890,720						192						23,934						—						—						5,914,846
Total loans			$	12,303,135					$	247,543					$	408,594					$	—					$	—					$	12,959,272
Total grade as a % of total gross loans			94.94		%				1.91		%				3.15		%				—		%				—		%

The following tables provide information on amortized cost of loans receivable based on borrower payment activity.

March 31, 2021			Performing Loans												Non-Performing Loans
			Amount						% of Total Loans						Amount						% of Total Loans
			(In thousands, except ratio data)
Commercial loans
Multi-family			$	1,987,120					100.0		%				$	—					—		%
Commercial real estate			2,201,839						99.6						9,226						0.4
Commercial & industrial			2,451,753						100.0						832						—
Construction			923,594						99.8						1,423						0.2
Land - acquisition & development			147,971						98.4						2,340						1.6
Total commercial loans			7,712,277						99.8						13,821						0.2
Consumer loans
Single-family residential			4,776,976						99.5						25,599						0.5
Construction - custom			308,831						100.0						—						—
Land - consumer lot loans			122,034						99.9						177						0.1
HELOC			144,760						99.8						306						0.2
Consumer			103,242						99.9						52						0.1
Total consumer loans			5,455,843						99.5						26,134						0.5
Total loans			$	13,168,120					99.7		%				$	39,955					0.3		%

September 30, 2020			Performing Loans												Non-Performing Loans
			Amount						% of Total Loans						Amount						% of Total Loans
			(In thousands, except ratio data)
Commercial loans
Multi-family			$	1,538,240					100.0		%				$	—					—		%
Commercial real estate			1,880,917						99.8						3,771						0.2
Commercial & industrial			2,115,184						100.0						329						—
Construction			1,350,745						99.9						1,669						0.1
Land - acquisition & development			153,571						100.0						—						—
Total commercial loans			7,038,657						99.9						5,769						0.1
Consumer loans
Single-family residential			5,271,531						99.6						22,431						0.4
Construction - custom			295,953						100.0						—						—
Land - consumer lot loans			101,151						99.8						243						0.2
HELOC			139,669						99.6						553						0.4
Consumer			83,255						99.9						60						0.1
Total consumer loans			5,891,559						99.6						23,287						0.4
Total loans			$	12,930,216					99.8		%				$	29,056					0.2		%

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- Definition

The entire disclosure for allowance for credit losses.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-URI http://asc.fasb.org/topic&trid=2196771

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- References

No definition available.

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