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Loans Receivable
 3 Months Ended
Dec. 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.
 December 31, 2021September 30, 2021
(In thousands)(In thousands)
Commercial loans
Multi-family$2,298,155 13.5 %$2,291,477 14.0 %
Commercial real estate2,681,453 15.8 2,443,845 15.0 
Commercial & industrial (1)2,373,012 13.9 2,314,654 14.2 
Construction2,967,644 17.4 2,888,214 17.7 
Land - acquisition & development225,423 1.3 222,457 1.4 
Total commercial loans10,545,687 61.9 10,160,647 62.3 
Consumer loans
Single-family residential5,295,837 31.1 4,951,627 30.4 
Construction - custom787,862 4.6 783,221 4.8 
   Land - consumer lot loans151,297 0.9 149,956 0.9 
   HELOC166,601 1.0 165,989 1.0 
   Consumer77,681 0.5 87,892 0.5 
Total consumer loans6,479,278 38.1 6,138,685 37.7 
Total gross loans17,024,965 100 %16,299,332 100 %
   Less:
      Allowance for credit losses on loans171,411 171,300 
      Loans in process2,207,880 2,232,836 
      Net deferred fees, costs and discounts53,472 61,626 
Total loan contra accounts2,432,763 2,465,762 
Net loans$14,592,202 $13,833,570 

(1) Includes $202,261,000 and $311,795,000 of Small Business Administration’s Paycheck Protection Program ("PPP") loans as of December 31, 2021 and September 30, 2021, 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 December 31, 2021, and September 30, 2021, AIR for loans totaled $47,106,000 and $46,234,000, respectively, and is included in the Interest receivable line item balance on the Company’s consolidated statements of financial condition.
Loans in the amount of $7,175,190,000 and $5,930,015,000 at December 31, 2021 and September 30, 2021, 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.
 
 December 31, 2021September 30, 2021
 (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$— $— $— $475 $— $— 
Commercial real estate7,565 — — 8,038 — — 
Commercial & industrial15,349 — — 365 30 — 
Construction611 — — 505 — — 
Land - acquisition & development2,340 — — 2,340 — — 
   Total commercial loans25,865 — — 11,723 30 — 
Consumer loans
Single-family residential17,751 — — 19,320 — — 
Construction - custom465 — — — — — 
Land - consumer lot loans544 — — 359 — — 
HELOC276 — — 287 — — 
Consumer58 — — 60 — — 
   Total consumer loans19,094 — — 20,026 — — 
Total non-accrual loans$44,959 $— $— $31,749 $30 $— 
% of total loans0.30 %0.23 %

The Company recognized interest income on non-accrual loans of approximately $1,250,000 in the three months ended December 31, 2021. If these loans had been on accrual status and performed according to their original contract terms, the Company would have recognized interest income of approximately $328,000 for the three months ended December 31, 2021. Recognized interest income for the three months ended December 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.
 
December 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$2,278,216 $2,278,216 $— $— $— $— — %
Commercial real estate2,667,170 2,663,441 2,282 — 1,447 3,729 0.14 
Commercial & industrial (1)2,365,487 2,348,085 1,031 1,059 15,312 17,402 0.74 
Construction1,235,119 1,235,119 — — — — — 
Land - acquisition & development202,081 199,741 — — 2,340 2,340 1.16 
   Total commercial loans8,748,073 8,724,602 3,313 1,059 19,099 23,471 0.27 
Consumer Loans
Single-family residential5,286,559 5,266,143 5,099 1,088 14,229 20,416 0.39 
Construction - custom333,583 333,118 — — 465 465 0.14 
Land - consumer lot loans149,845 149,193 52 75 525 652 0.44 
HELOC167,789 167,273 261 — 255 516 0.31 
Consumer77,764 77,530 69 114 51 234 0.30 
   Total consumer loans6,015,540 5,993,257 5,481 1,277 15,525 22,283 0.37 
Total Loans$14,763,613 $14,717,859 $8,794 $2,336 $34,624 $45,754 0.31 %
Delinquency %99.69%0.06%0.02%0.23%0.31%



September 30, 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$2,273,689 $2,273,214 $— $— $475 $475 0.02 %
Commercial real estate2,429,332 2,428,014 971 64 283 1,318 0.05 
Commercial & industrial2,303,927 2,303,605 — — 322 322 0.01 
Construction1,117,227 1,117,186 — — 41 41 — 
Land - acquisition & development192,416 190,076 — — 2,340 2,340 1.22 
  Total commercial loans8,316,591 8,312,095 971 64 3,461 4,496 0.05 
Consumer Loans
Single-family residential4,937,064 4,915,749 3,627 2,165 15,523 21,315 0.43 
Construction - custom347,752 347,752 — — — — — 
Land - consumer lot loans148,534 147,952 5 307 270 582 0.39 
HELOC166,940 166,627 47 — 266 313 0.19 
Consumer87,989 87,727 152 59 51 262 0.30 
  Total consumer loans5,688,279 5,665,807 3,831 2,531 16,110 22,472 0.40 
Total Loans$14,004,870 $13,977,902 $4,802 $2,595 $19,571 $26,968 0.19 %
Delinquency %99.81%0.03%0.02%0.14%0.19%
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 December 31, 2021, 16 mortgage loans totaling $3,526,000 and 1 commercial loan totaling $475,000 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 December 31, 2021, 97.4% of the Company's $60,326,000 in TDRs were classified as performing. As of December 31, 2021, single-family residential loans comprised 92.2% 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 December 31, 2021.
Term Loans Amortized Cost Basis by Origination Year
YTD 20222021202020192018Prior to 2018Revolving LoansRevolving to Term LoansTotal Loans
Commercial loans
Multi-family
Pass$188,312 $774,664 $461,598 $145,568 $197,475 $466,643 $36,205 $— $2,270,465 
Special Mention— — 1,754 — 3,098 — — — 4,852 
Substandard— — — — 650 2,249 — — 2,899 
Total$188,312 $774,664 $463,352 $145,568 $201,223 $468,892 $36,205 $— $2,278,216 
Commercial real estate
Pass$315,441 $644,455 $403,955 $273,743 $257,052 $591,343 $3,075 $— $2,489,064 
Special Mention— — — 5,308 32,941 19,800 — — 58,049 
Substandard— — 8,308 44,362 17,171 49,124 1,092 — 120,057 
Total$315,441 $644,455 $412,263 $323,413 $307,164 $660,267 $4,167 $— $2,667,170 
Commercial & industrial
Pass$96,846 $617,826 $179,111 $46,636 $32,369 $233,105 $954,157 $97 $2,160,147 
Special Mention744 13,881 2,782 5,972 — 6 37,377 — 60,762 
Substandard— 69 46,474 2,356 4,532 14,972 76,175 — 144,578 
Total$97,590 $631,776 $228,367 $54,964 $36,901 $248,083 $1,067,709 $97 $2,365,487 
Construction
Pass$68,058 $494,383 $352,324 $232,534 $374 $16,313 $69,957 $— $1,233,943 
Special Mention— 566 — — — — — — 566 
Substandard— — 610 — — — — — 610 
Total$68,058 $494,949 $352,934 $232,534 $374 $16,313 $69,957 $— $1,235,119 
Land - acquisition & development
Pass$31,257 $80,472 $30,263 $11,800 $13,730 $29,619 $2,600 $— $199,741 
Substandard— — — — — 2,340 — — 2,340 
Total$31,257 $80,472 $30,263 $11,800 $13,730 $31,959 $2,600 $— $202,081 
Total commercial loans
Pass$699,914 $2,611,800 $1,427,251 $710,281 $501,000 $1,337,023 $1,065,994 $97 $8,353,360 
Special Mention744 14,447 4,536 11,280 36,039 19,806 37,377 — 124,229 
Substandard— 69 55,392 46,718 22,353 68,685 77,267 — 270,484 
Total$700,658 $2,626,316 $1,487,179 $768,279 $559,392 $1,425,514 $1,180,638 $97 $8,748,073 
Term Loans Amortized Cost Basis by Origination Year
YTD 20222021202020192018Prior to 2018Revolving LoansRevolving to Term LoansTotal Loans
Consumer loans
Single-family residential
Current$686,288 $1,222,748 $805,399 $381,245 $320,431 $1,850,032 $— $— $5,266,143 
30 days past due735 — — — — 4,364 — — 5,099 
60 days past due— — — — — 1,088 — — 1,088 
90+ days past due— — — 348 114 13,767 — — 14,229 
Total$687,023 $1,222,748 $805,399 $381,593 $320,545 $1,869,251 $— $— $5,286,559 
Construction - custom
Current$10,516 $251,800 $68,238 $1,928 $636 $— $— $— $333,118 
90+ days past due— — 465 — — — — — 465 
Total$10,516 $251,800 $68,703 $1,928 $636 $— $— $— $333,583 
Land - consumer lot loans
Current$18,436 $77,593 $23,409 $7,629 $4,062 $18,064 $— $— $149,193 
30 days past due— — 52 — — — — — 52 
60 days past due— — — 75 — — — — 75 
90+ days past due— — 142 — — 383 — — 525 
Total$18,436 $77,593 $23,603 $7,704 $4,062 $18,447 $— $— $149,845 
HELOC
Current$— $— $— $— $— $5,378 $161,644 $251 $167,273 
30 days past due— — — — — 214 38 9 261 
90+ days past due— — — — — 30 225 — 255 
Total$— $— $— $— $— $5,622 $161,907 $260 $167,789 
Consumer
Current$100 $10,435 $8,082 $488 $31,853 $9,374 $17,198 $— $77,530 
30 days past due— — — 10 — 55 4 — 69 
60 days past due— — — 4 — 110 — — 114 
90+ days past due— — — 34 — 17 — — 51 
Total$100 $10,435 $8,082 $536 $31,853 $9,556 $17,202 $— $77,764 
Total consumer loans
Current$715,340 $1,562,576 $905,128 $391,290 $356,982 $1,882,848 $178,842 $251 $5,993,257 
30 days past due735 — 52 10 — 4,633 42 9 5,481 
60 days past due— — — 79 — 1,198 — — 1,277 
90+ days past due— — 607 382 114 14,197 225 — 15,525 
Total$716,075 $1,562,576 $905,787 $391,761 $357,096 $1,902,876 $179,109 $260 $6,015,540