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v3.22.2.2

Allowance for Loan Losses | 12 Months Ended
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Sep. 30, 2022
Receivables [Abstract] |
Allowance for Loan Losses | ALLOWANCE FOR LOAN LOSSES 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.
Twelve Months Ended September 30, 2022 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers |  | Ending Allowance
| (In thousands) |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 16,949 |  |  | $ | — |  |  | $ | — |  |  | $ | (4,936) |  |  | $ | 12,013 |
Commercial real estate | 23,437 |  |  | (529) |  |  | 984 |  |  | 1,922 |  |  | 25,814 |
Commercial & industrial | 45,957 |  |  | (1,202) |  |  | 73 |  |  | 12,382 |  |  | 57,210 |
Construction - speculative | 25,585 |  |  | — |  |  | 2,179 |  |  | (1,603) |  |  | 26,161 |
Land - acquisition & development | 13,447 |  |  | (11) |  |  | 70 |  |  | (1,228) |  |  | 12,278 |
Total commercial loans | 125,375 |  |  | (1,742) |  |  | 3,306 |  |  | 6,537 |  |  | 133,476 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 30,978 |  |  | — |  |  | 1,002 |  |  | (6,462) |  |  | 25,518 |
Construction - custom | 4,907 |  |  | — |  |  | — |  |  | (1,497) |  |  | 3,410 |
Land - consumer lot loans | 4,939 |  |  | (27) |  |  | 48 |  |  | 87 |  |  | 5,047 |
HELOC | 2,390 |  |  | — |  |  | 351 |  |  | (259) |  |  | 2,482 |
Consumer | 2,711 |  |  | (370) |  |  | 940 |  |  | (406) |  |  | 2,875 |
Total consumer loans | 45,925 |  |  | (397) |  |  | 2,341 |  |  | (8,537) |  |  | 39,332 |
| $ | 171,300 |  |  | $ | (2,139) |  |  | $ | 5,647 |  |  | $ | (2,000) |  |  | $ | 172,808 |
Twelve Months Ended September 30, 2021 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 13,853 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,096 |  |  | $ | 16,949 |
Commercial real estate | 22,516 |  |  | — |  |  | 2,789 |  |  | (1,868) |  |  | $ | 23,437 |
Commercial & industrial | 38,665 |  |  | (31) |  |  | 92 |  |  | 7,231 |  |  | $ | 45,957 |
Construction - speculative | 24,156 |  |  | — |  |  | — |  |  | 1,429 |  |  | $ | 25,585 |
Land - acquisition & development | 10,733 |  |  | (2) |  |  | 622 |  |  | 2,094 |  |  | $ | 13,447 |
Total commercial loans | 109,923 |  |  | (33) |  |  | 3,503 |  |  | 11,982 |  |  | 125,375 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 45,186 |  |  | (106) |  |  | 2,026 |  |  | (16,128) |  |  | 30,978 |
Construction - custom | 3,555 |  |  | — |  |  | — |  |  | 1,352 |  |  | 4,907 |
Land - consumer lot loans | 2,729 |  |  | — |  |  | 168 |  |  | 2,042 |  |  | 4,939 |
HELOC | 2,571 |  |  | — |  |  | 52 |  |  | (233) |  |  | 2,390 |
Consumer | 2,991 |  |  | (286) |  |  | 1,021 |  |  | (1,015) |  |  | 2,711 |
Total consumer loans | 57,032 |  |  | (392) |  |  | 3,267 |  |  | (13,982) |  |  | 45,925 |
| $ | 166,955 |  |  | $ | (425) |  |  | $ | 6,770 |  |  | $ | (2,000) |  |  | $ | 171,300 |
The Company recorded a provision for credit losses of $3,000,000 in 2022, compared to a provision of $500,000 for 2021. In 2022, provisioning for net growth in the loan portfolio was mostly offset by improvements in the credit quality of certain loan portfolios related to strong real estate markets and collateral conditions. For the year ended September 30, 2022, net recoveries were $3,508,000, compared to $6,345,000 in the prior year. A loan is charged-off when the loss is estimable and it is confirmed that the borrower is not expected to be able to meet its contractual obligations. No allowance was recorded as of September 30, 2022 or September 30, 2021 for the PPP loans, which are included in the commercial & industrial loan category, due to the government guarantee. Non-accrual loans increased to $34,534,000 as of September 30, 2022, from $31,749,000 as of September 30, 2021. Non-performing assets totaled $44,554,000, or 0.21% of total assets, at September 30, 2022, compared to $43,625,000, or 0.22% of total assets, as of September 30, 2021. As of September 30, 2022, the allowance for loan losses of $172,808,000 is for loans that are evaluated on a pooled basis, which was comprised of $115,245,000 related to the quantitative component and $57,563,000 related to management's qualitative overlays (including the forecast component of the reserve). 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).
September 30, 2022 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total
| (In thousands)
Loan type |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |
Multi-family | $ | 2,612,669 |  |  | $ | — |  |  | $ | 13,810 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,626,479 |
Commercial real estate | 3,054,241 |  |  | 1,594 |  |  | 55,277 |  |  | — |  |  | — |  |  | 3,111,112 |
Commercial & industrial | 2,196,767 |  |  | 31,656 |  |  | 114,980 |  |  | — |  |  | — |  |  | 2,343,403 |
Construction - speculative | 1,421,634 |  |  | — |  |  | 2,257 |  |  | — |  |  | — |  |  | 1,423,891 |
Land - acquisition & development | 223,616 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 223,616 |
Total commercial loans | 9,508,927 |  |  | 33,250 |  |  | 186,324 |  |  | — |  |  | — |  |  | 9,728,501 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Single-family residential | 5,706,199 |  |  | — |  |  | 20,780 |  |  | — |  |  | — |  |  | 5,726,979 |
Construction - custom | 396,908 |  |  | — |  |  | 435 |  |  | — |  |  | — |  |  | 397,343 |
Land - consumer lot loans | 151,723 |  |  | — |  |  | 222 |  |  | — |  |  | — |  |  | 151,945 |
HELOC | 205,800 |  |  | — |  |  | 233 |  |  | — |  |  | — |  |  | 206,033 |
Consumer | 75,570 |  |  | — |  |  | 1 |  |  | — |  |  | — |  |  | 75,571 |
Total consumer loans | 6,536,200 |  |  | — |  |  | 21,671 |  |  | — |  |  | — |  |  | 6,557,871 |
Total loans | $ | 16,045,127 |  |  | $ | 33,250 |  |  | $ | 207,995 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,286,372 |
Total grade as a % of total loans | 98.5 | % |  | 0.2 | % |  | 1.3 | % |  | — | % |  | — | % |  |
September 30, 2021 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total Gross Loans
| (In thousands)
Loan type |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |
Multi-family | $ | 2,252,395 |  |  | $ | 4,874 |  |  | $ | 16,420 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,273,689 |
Commercial real estate | 2,174,386 |  |  | 57,625 |  |  | 197,321 |  |  | — |  |  | — |  |  | 2,429,332 |
Commercial & industrial | 2,108,152 |  |  | 48,124 |  |  | 147,651 |  |  | — |  |  | — |  |  | 2,303,927 |
Construction - speculative | 1,115,791 |  |  | 931 |  |  | 505 |  |  | — |  |  | — |  |  | 1,117,227 |
Land - acquisition & development | 190,076 |  |  | — |  |  | 2,340 |  |  | — |  |  | — |  |  | 192,416 |
Total commercial loans | 7,840,800 |  |  | 111,554 |  |  | 364,237 |  |  | — |  |  | — |  |  | 8,316,591 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Single-family residential | 4,915,106 |  |  | — |  |  | 21,958 |  |  | — |  |  | — |  |  | 4,937,064 |
Construction - custom | 347,752 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 347,752 |
Land - consumer lot loans | 148,010 |  |  | — |  |  | 524 |  |  | — |  |  | — |  |  | 148,534 |
HELOC | 166,652 |  |  | — |  |  | 288 |  |  | — |  |  | — |  |  | 166,940 |
Consumer | 87,962 |  |  | — |  |  | 27 |  |  | — |  |  | — |  |  | 87,989 |
Total consumer loans | 5,665,482 |  |  | — |  |  | 22,797 |  |  | — |  |  | — |  |  | 5,688,279 |
Total gross loans | $ | 13,506,282 |  |  | $ | 111,554 |  |  | $ | 387,034 |  |  | $ | — |  |  | $ | — |  |  | $ | 14,004,870 |
Total grade as a % of total gross loans | 96.4 | % |  | 0.8 | % |  | 2.8 | % |  | — | % |  | — | % |  |
The following tables provide information on amortized cost of loans receivable based on borrower payment activity.
September 30, 2022 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands) |  |  |  | (In thousands) |  |
Commercial loans |  |  |  |  |  |  |
Multi-family | $ | 2,620,567 |  |  | 99.8 | % |  | $ | 5,912 |  |  | 0.2 | %
Commercial real estate | 3,106,421 |  |  | 99.8 |  |  | 4,691 |  |  | 0.2 |
Commercial & industrial | 2,337,710 |  |  | 99.8 |  |  | 5,693 |  |  | 0.2 |
Construction - speculative | 1,423,891 |  |  | 100.0 |  |  | — |  |  | — |
Land - acquisition & development | 223,616 |  |  | 100.0 |  |  | — |  |  | — |
Total commercial loans | 9,712,205 |  |  | 99.8 |  |  | 16,296 |  |  | 0.2 |
Consumer loans |  |  |  |  |  |  |
Single-family residential | 5,709,529 |  |  | 99.7 |  |  | 17,450 |  |  | 0.3 |
Construction - custom | 396,908 |  |  | 99.9 |  |  | 435 |  |  | 0.1 |
Land - consumer lot loans | 151,861 |  |  | 99.9 |  |  | 84 |  |  | 0.1 |
HELOC | 205,800 |  |  | 99.9 |  |  | 233 |  |  | 0.1 |
Consumer | 75,535 |  |  | 100.0 |  |  | 36 |  |  | — |
Total consumer loans | 6,539,633 |  |  | 99.7 |  |  | 18,238 |  |  | 0.3 |
Total | $ | 16,251,838 |  |  | 99.8 | % |  | $ | 34,534 |  |  | 0.2 | %
September 30, 2021 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands) |  |  |  | (In thousands) |  |
Commercial loans |  |  |  |  |  |  |
Multi-family | $ | 2,273,214 |  |  | 100.0 | % |  | $ | 475 |  |  | — | %
Commercial real estate | 2,421,294 |  |  | 99.7 |  |  | 8,038 |  |  | 0.3 |
Commercial & industrial | 2,303,562 |  |  | 100.0 |  |  | 365 |  |  | — |
Construction - speculative | 1,116,722 |  |  | 100.0 |  |  | 505 |  |  | — |
Land - acquisition & development | 190,076 |  |  | 98.8 |  |  | 2,340 |  |  | 1.2 |
Total commercial loans | 8,304,868 |  |  | 99.9 |  |  | 11,723 |  |  | 0.1 |
Consumer loans |  |  |  |  |  |  |
Single-family residential | 4,917,744 |  |  | 99.6 |  |  | 19,320 |  |  | 0.4 |
Construction - custom | 347,752 |  |  | 100.0 |  |  | — |  |  | — |
Land - consumer lot loans | 148,175 |  |  | 99.8 |  |  | 359 |  |  | 0.2 |
HELOC | 166,653 |  |  | 99.8 |  |  | 287 |  |  | 0.2 |
Consumer | 87,929 |  |  | 99.9 |  |  | 60 |  |  | 0.1 |
Total consumer loans | 5,668,253 |  |  | 99.6 |  |  | 20,026 |  |  | 0.4 |
Total gross loans | $ | 13,973,121 |  |  | 99.8 | % |  | $ | 31,749 |  |  | 0.2 | %

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