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Loans Receivable
 9 Months Ended
Jun. 30, 2022
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.
 June 30, 2022September 30, 2021
(In thousands)(In thousands)
Commercial loans
Multi-family$2,494,594 13.2 %$2,291,477 14.0 %
Commercial real estate2,899,057 15.3 2,443,845 15.0 
Commercial & industrial (1)2,351,030 12.4 2,314,654 14.2 
Construction3,896,740 20.6 2,888,214 17.7 
Land - acquisition & development245,233 1.3 222,457 1.4 
Total commercial loans11,886,654 62.9 10,160,647 62.3 
Consumer loans
Single-family residential5,652,897 29.9 4,951,627 30.4 
Construction - custom943,858 5.0 783,221 4.8 
   Land - consumer lot loans158,485 0.8 149,956 0.9 
   HELOC185,427 1.0 165,989 1.0 
   Consumer73,044 0.4 87,892 0.5 
Total consumer loans7,013,711 37.1 6,138,685 37.7 
Total gross loans18,900,365 100 %16,299,332 100 %
   Less:
      Allowance for credit losses on loans170,979 171,300 
      Loans in process3,083,573 2,232,836 
      Net deferred fees, costs and discounts80,648 61,626 
Total loan contra accounts3,335,200 2,465,762 
Net loans$15,565,165 $13,833,570 
(1) Includes $55 million and $312 million of Small Business Administration’s Paycheck Protection Program ("PPP") loans as of June 30, 2022 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 June 30, 2022, and September 30, 2021, AIR for loans
totaled $49,263,000 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 $7,841,568,000 and $5,930,015,000 at June 30, 2022 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.
 
 June 30, 2022September 30, 2021
 (In thousands, except ratio data)
Non-accrualNon-accrual with no ACL (2)90 days or more past due and accruing (1)Non-accrualNon-accrual with no ACL90 days or more past due and accruing
Commercial loans
Multi-family$5,944 $— $— $475 $— $— 
Commercial real estate5,024 — — 8,038 — — 
Commercial & industrial4,288 754 11,439 365 30 — 
Construction— — — 505 — — 
Land - acquisition & development— — — 2,340 — — 
   Total commercial loans15,256 754 11,439 11,723 30 — 
Consumer loans
Single-family residential20,184 — — 19,320 — — 
Construction - custom900 — — — — — 
Land - consumer lot loans213 — — 359 — — 
HELOC91 — — 287 — — 
Consumer35 — — 60 — — 
   Total consumer loans21,423 — — 20,026 — — 
Total non-accrual loans$36,679 $754 $11,439 $31,749 $30 $— 
% of total loans0.23 %0.23 %
(1) $10 million of this amount is comprised of one government guaranteed SBA PPP loan for which the entire balance was forgiven by the SBA subsequent to the June 30, 2022 quarter end.
(2) Amounts in the 'Non-Accrual with no ACL' column are a subset of the amounts in the 'Non-accrual' column

The Company recognized interest income on non-accrual loans of approximately $2,544,000 in the nine months ended June 30, 2022. 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 $969,000 for the nine months ended June 30, 2022. Recognized interest income for the nine months ended June 30, 2022 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.
 
June 30, 2022Days 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$2,478,932 $2,478,932 $— $— $— $— — %
Commercial real estate2,876,995 2,876,644 — — 351 351 0.01 
Commercial & industrial (1)2,344,046 2,327,625 369 359 15,693 16,421 0.70 
Construction1,407,211 1,407,211 — — — — — 
Land - acquisition & development222,974 222,974 — — — — — 
   Total commercial loans9,330,158 9,313,386 369 359 16,044 16,772 0.18 
Consumer Loans
Single-family residential5,619,448 5,597,259 4,611 1,533 16,045 22,189 0.39 
Construction - custom368,839 367,939 — — 900 900 0.24 
Land - consumer lot loans157,076 156,693 206 — 177 383 0.24 
HELOC187,469 187,267 103 16 83 202 0.11 
Consumer73,154 72,902 130 63 59 252 0.34 
   Total consumer loans6,405,986 6,382,060 5,050 1,612 17,264 23,926 0.37 
Total Loans$15,736,144 $15,695,446 $5,419 $1,971 $33,308 $40,698 0.26 %
Delinquency %99.74%0.03%0.01%0.21%0.26%
(1) $10 million of the 90 days past due amount for this loan class is comprised of one government guaranteed SBA PPP loan for which the entire balance was forgiven by the SBA subsequent to the June 30, 2022 quarter end.


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%
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 June 30, 2022, 97.6% of the Company's $58,896,000 in TDRs were classified as performing. As of June 30, 2022, single-family residential loans comprised 82.7% 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 June 30, 2022.
Term Loans Amortized Cost Basis by Origination Year
YTD 20222021202020192018Prior to 2018Revolving LoansRevolving to Term LoansTotal Loans
Commercial loans
Multi-family
Pass$584,451 $717,886 $463,720 $140,499 $162,319 $373,585 $26,562 $— $2,469,022 
Substandard— — 1,738 — 6,592 1,580 — — 9,910 
Total$584,451 $717,886 $465,458 $140,499 $168,911 $375,165 $26,562 $— $2,478,932 
Commercial real estate
Pass$605,412 $678,619 $432,194 $273,116 $243,378 $549,589 $2,942 $— $2,785,250 
Substandard262 — 5,119 66,309 4,895 14,080 1,080 — 91,745 
Total$605,674 $678,619 $437,313 $339,425 $248,273 $563,669 $4,022 $— $2,876,995 
Commercial & industrial
Pass$197,991 $476,441 $152,423 $43,441 $25,837 $233,135 $1,068,341 $217 $2,197,826 
Special Mention2,506 — — — — — 30,283 — 32,789 
Substandard2,045 12,935 19,866 5,603 4,388 1,983 66,611 — 113,431 
Total$202,542 $489,376 $172,289 $49,044 $30,225 $235,118 $1,165,235 $217 $2,344,046 
Construction
Pass$381,073 $623,971 $252,391 $70,014 $374 $16,316 $60,816 $— $1,404,955 
Substandard— 2,256 — — — — — — 2,256 
Total$381,073 $626,227 $252,391 $70,014 $374 $16,316 $60,816 $— $1,407,211 
Land - acquisition & development
Pass$83,037 $73,788 $20,398 $4,126 $10,444 $28,581 $2,600 $— $222,974 
Total$83,037 $73,788 $20,398 $4,126 $10,444 $28,581 $2,600 $— $222,974 
Total commercial loans
Pass$1,851,964 $2,570,705 $1,321,126 $531,196 $442,352 $1,201,206 $1,161,261 $217 $9,080,027 
Special Mention2,506 — — — — — 30,283 — 32,789 
Substandard2,307 15,191 26,723 71,912 15,875 17,643 67,691 — 217,342 
Total$1,856,777 $2,585,896 $1,347,849 $603,108 $458,227 $1,218,849 $1,259,235 $217 $9,330,158 
Term Loans Amortized Cost Basis by Origination Year
YTD 20222021202020192018Prior to 2018Revolving LoansRevolving to Term LoansTotal Loans
Consumer loans
Single-family residential
Current$1,008,103 $1,566,179 $780,090 $331,798 $286,311 $1,624,778 $— $— $5,597,259 
30 days past due2,601 — — 78 — 1,932 — — 4,611 
60 days past due— — 696 59 — 778 — — 1,533 
90+ days past due— 775 — 699 57 14,514 — — 16,045 
Total$1,010,704 $1,566,954 $780,786 $332,634 $286,368 $1,642,002 $— $— $5,619,448 
Construction - custom
Current$125,662 $223,181 $17,212 $1,154 $730 $— $— $— $367,939 
90+ days past due— 435 465 — — — — — 900 
Total$125,662 $223,616 $17,677 $1,154 $730 $— $— $— $368,839 
Land - consumer lot loans
Current$49,972 $65,286 $18,076 $5,825 $3,464 $14,070 $— $— $156,693 
30 days past due— — 206 — — — — — 206 
90+ days past due— — — — — 177 — — 177 
Total$49,972 $65,286 $18,282 $5,825 $3,464 $14,247 $— $— $157,076 
HELOC
Current$— $— $— $— $— $4,794 $182,091 $382 $187,267 
30 days past due— — — — — — 103 — 103 
60 days past due— — — — — — 7 9 16 
90+ days past due— — — — — — 83 — 83 
Total$— $— $— $— $— $4,794 $182,284 $391 $187,469 
Consumer
Current$647 $10,251 $8,049 $299 $25,482 $7,128 $21,046 $— $72,902 
30 days past due— — — 5 — 123 2 — 130 
60 days past due— — — — — 63 — — 63 
90+ days past due1 — — 33 — 25 — — 59 
Total$648 $10,251 $8,049 $337 $25,482 $7,339 $21,048 $— $73,154 
Total consumer loans
Current$1,184,384 $1,864,897 $823,427 $339,076 $315,987 $1,650,770 $203,137 $382 $6,382,060 
30 days past due2,601 — 206 83 — 2,055 105 — 5,050 
60 days past due— — 696 59 — 841 7 9 1,612 
90+ days past due1 1,210 465 732 57 14,716 83 — 17,264 
Total$1,186,986 $1,866,107 $824,794 $339,950 $316,044 $1,668,382 $203,332 $391 $6,405,986