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Allowance for Losses on Loans | 9 Months Ended
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Jun. 30, 2023
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 June 30, 2023 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers (1) |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 13,038 |  |  | $ | — |  |  | $ | — |  |  | $ | (62) |  |  | $ | 12,976 |
Commercial real estate | 27,803 |  |  | — |  |  | — |  |  | 329 |  |  | 28,132 |
Commercial & industrial | 63,301 |  |  | (10,469) |  |  | 10 |  |  | 9,073 |  |  | 61,915 |
Construction | 26,027 |  |  | — |  |  | — |  |  | 1,889 |  |  | 27,916 |
Land - acquisition & development | 7,496 |  |  | — |  |  | 24 |  |  | (274) |  |  | 7,246 |
Total commercial loans | 137,665 |  |  | (10,469) |  |  | 34 |  |  | 10,955 |  |  | 138,185 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 26,916 |  |  | — |  |  | 18 |  |  | 149 |  |  | 27,083 |
Construction - custom | 3,456 |  |  | — |  |  | — |  |  | (235) |  |  | 3,221 |
Land - consumer lot loans | 3,945 |  |  | — |  |  | 9 |  |  | (184) |  |  | 3,770 |
HELOC | 2,662 |  |  | — |  |  | — |  |  | 81 |  |  | 2,743 |
Consumer | 2,776 |  |  | (74) |  |  | 131 |  |  | 234 |  |  | 3,067 |
Total consumer loans | 39,755 |  |  | (74) |  |  | 158 |  |  | 45 |  |  | 39,884 |
Total loans | $ | 177,420 |  |  | $ | (10,543) |  |  | $ | 192 |  |  | $ | 11,000 |  |  | $ | 178,069 |
(1) Provision & transfer amounts within the table do not include the recapture of provision for unfunded commitments of $2.0 million. The total provision recognized for the three months ended June 30, 2023 was $9.0 million.
Three Months Ended June 30, 2022 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers (1) |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 14,463 |  |  | $ | — |  |  | $ | — |  |  | $ | (1,889) |  |  | $ | 12,574 |
Commercial real estate | 24,682 |  |  | — |  |  | 23 |  |  | 595 |  |  | 25,300 |
Commercial & industrial | 53,903 |  |  | (27) |  |  | 8 |  |  | 1,040 |  |  | 54,924 |
Construction | 22,707 |  |  | — |  |  | — |  |  | 3,127 |  |  | 25,834 |
Land - acquisition & development | 13,685 |  |  | (1) |  |  | 11 |  |  | (1,468) |  |  | 12,227 |
Total commercial loans | 129,440 |  |  | (28) |  |  | 42 |  |  | 1,405 |  |  | 130,859 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 28,992 |  |  | — |  |  | 252 |  |  | (3,027) |  |  | 26,217 |
Construction - custom | 3,129 |  |  | — |  |  | — |  |  | 225 |  |  | 3,354 |
Land - consumer lot loans | 5,105 |  |  | — |  |  | 2 |  |  | 113 |  |  | 5,220 |
HELOC | 2,475 |  |  | — |  |  | 249 |  |  | (92) |  |  | 2,632 |
Consumer | 2,243 |  |  | (253) |  |  | 331 |  |  | 376 |  |  | 2,697 |
Total consumer loans | 41,944 |  |  | (253) |  |  | 834 |  |  | (2,405) |  |  | 40,120 |
Total loans | $ | 171,384 |  |  | $ | (281) |  |  | $ | 876 |  |  | $ | (1,000) |  |  | $ | 170,979 |
(1) Provision & transfer amounts within the table do not include the provision for unfunded commitments of $2.5 million. The total provision recognized for the three months ended June 30, 2022 was $1.5 million.
Nine Months Ended June 30, 2023 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers (1) |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 12,013 |  |  | $ | — |  |  | $ | — |  |  | $ | 963 |  |  | $ | 12,976 |
Commercial real estate | 25,814 |  |  | — |  |  | 5 |  |  | 2,313 |  |  | 28,132 |
Commercial & industrial | 57,210 |  |  | (16,605) |  |  | 84 |  |  | 21,226 |  |  | 61,915 |
Construction | 26,161 |  |  | — |  |  | — |  |  | 1,755 |  |  | 27,916 |
Land - acquisition & development | 12,278 |  |  | — |  |  | 54 |  |  | (5,086) |  |  | 7,246 |
Total commercial loans | 133,476 |  |  | (16,605) |  |  | 143 |  |  | 21,171 |  |  | 138,185 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 25,518 |  |  | (34) |  |  | 552 |  |  | 1,047 |  |  | 27,083 |
Construction - custom | 3,410 |  |  | — |  |  | — |  |  | (189) |  |  | 3,221 |
Land - consumer lot loans | 5,047 |  |  | — |  |  | 14 |  |  | (1,291) |  |  | 3,770 |
HELOC | 2,482 |  |  | — |  |  | 1 |  |  | 260 |  |  | 2,743 |
Consumer | 2,875 |  |  | (258) |  |  | 448 |  |  | 2 |  |  | 3,067 |
Total consumer loans | 39,332 |  |  | (292) |  |  | 1,015 |  |  | (171) |  |  | 39,884 |
Total loans | $ | 172,808 |  |  | $ | (16,897) |  |  | $ | 1,158 |  |  | $ | 21,000 |  |  | $ | 178,069 |
(1) Provision & transfer amounts within the table do not include the recapture of provision for unfunded commitments of $6.0 million. The total provision for the nine months ended June 30, 2023 was $15.0 million.
Nine Months Ended June 30, 2022 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers (1) |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 16,949 |  |  | $ | — |  |  | $ | — |  |  | $ | (4,375) |  |  | $ | 12,574 |
Commercial real estate | 23,437 |  |  | (529) |  |  | 820 |  |  | 1,572 |  |  | 25,300 |
Commercial & industrial | 45,957 |  |  | (943) |  |  | 72 |  |  | 9,838 |  |  | 54,924 |
Construction | 25,585 |  |  | — |  |  | 2,179 |  |  | (1,930) |  |  | 25,834 |
Land - acquisition & development | 13,447 |  |  | (3) |  |  | 51 |  |  | (1,268) |  |  | 12,227 |
Total commercial loans | 125,375 |  |  | (1,475) |  |  | 3,122 |  |  | 3,837 |  |  | 130,859 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 30,978 |  |  | — |  |  | 804 |  |  | (5,565) |  |  | 26,217 |
Construction - custom | 4,907 |  |  | — |  |  | — |  |  | (1,553) |  |  | 3,354 |
Land - consumer lot loans | 4,939 |  |  | (27) |  |  | 47 |  |  | 261 |  |  | 5,220 |
HELOC | 2,390 |  |  | — |  |  | 350 |  |  | (108) |  |  | 2,632 |
Consumer | 2,711 |  |  | (368) |  |  | 726 |  |  | (372) |  |  | 2,697 |
Total consumer loans | 45,925 |  |  | (395) |  |  | 1,927 |  |  | (7,337) |  |  | 40,120 |
Total loans | $ | 171,300 |  |  | $ | (1,870) |  |  | $ | 5,049 |  |  | $ | (3,500) |  |  | $ | 170,979 |
(1) Provision & transfer amounts within the table do not include the provision for unfunded commitments of $5.0 million. As such there was $1.5 million provision recognized for the nine months ended June 30, 2022. The Company recorded a $9,000,000 provision for credit losses for the three months ended June 30, 2023, compared to a $1,500,000 release of allowance for credit losses for the three months ended June 30, 2022. The provision in the three months ended June 30, 2023 was primarily due to one charge-off, offset by reduced unfunded commitment balances combined with an uncertain economic outlook amid concerns around a looming recession and recent macro-economic events. The provision for the three months ended June 30, 2022 was primarily due to growth in loans receivable and unfunded commitments partially offset by improvements in the credit quality of certain loan portfolios related to strong real estate markets and collateral conditions. The Company recorded a $15,000,000 provision for credit losses for the nine months ended June 30, 2023, compared with $1,500,000 provision for credit losses for the nine months ended June 30, 2022. Charge-offs, net of recoveries, totaled $10,351,000 for the three months ended June 30, 2023, compared to net recoveries of $595,000 during the three months ended June 30, 2022. Charge-offs, net of recoveries, totaled $15,739,000 for the nine months ended June 30, 2023, compared to net recoveries of $3,179,000 during the nine months ended June 30, 2022. No allowance was recorded as of June 30, 2022 for the $54,185,000 of PPP loans in the portfolio at that date which are included in the commercial & industrial loan category, due to the government guarantee. Non-performing assets were $67,000,000, or 0.30% of total assets, at June 30, 2023, compared to $44,554,000, or 0.21% of total assets, at September 30, 2022. Non-accrual loans were $55,276,000 at June 30, 2023, compared to $34,534,000 at September 30, 2022. Delinquencies, as a percent of total loans, were 0.31% at June 30, 2023, compared to 0.17% at September 30, 2022. 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.
June 30, 2023 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total
| (In thousands, except ratio data)
Loan type |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |
Multi-family | $ | 2,749,291 |  |  | $ | 90,187 |  |  | $ | 18,955 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,858,433 |
Commercial real estate | 3,114,517 |  |  | 23,238 |  |  | 80,696 |  |  | — |  |  | — |  |  | 3,218,451 |
Commercial & industrial | 2,329,675 |  |  | 6,815 |  |  | 154,250 |  |  | — |  |  | — |  |  | 2,490,740 |
Construction | 1,732,137 |  |  | 4,739 |  |  | 22,558 |  |  | — |  |  | — |  |  | 1,759,434 |
Land - acquisition & development | 161,388 |  |  | — |  |  | 270 |  |  | — |  |  | — |  |  | 161,658 |
Total commercial loans | 10,087,008 |  |  | 124,979 |  |  | 276,729 |  |  | — |  |  | — |  |  | 10,488,716 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Single-family residential | 6,239,912 |  |  | — |  |  | 18,680 |  |  | — |  |  | — |  |  | 6,258,592 |
Construction - custom | 375,957 |  |  | — |  |  | 88 |  |  | — |  |  | — |  |  | 376,045 |
Land - consumer lot loans | 133,758 |  |  | — |  |  | 236 |  |  | — |  |  | — |  |  | 133,994 |
HELOC | 227,331 |  |  | — |  |  | 801 |  |  | — |  |  | — |  |  | 228,132 |
Consumer | 76,765 |  |  | — |  |  | 13 |  |  | — |  |  | — |  |  | 76,778 |
Total consumer loans | 7,053,723 |  |  | — |  |  | 19,818 |  |  | — |  |  | — |  |  | 7,073,541 |
Total | $ | 17,140,731 |  |  | $ | 124,979 |  |  | $ | 296,547 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,562,257 |
Total grade as a % of total loans | 97.60 | % |  | 0.71 | % |  | 1.69 | % |  | — | % |  | — | % |  |
September 30, 2022 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total
| (In thousands, except ratio data)
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 | 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 | 98.52 | % |  | 0.20 | % |  | 1.28 | % |  | — | % |  | — | % |  |
The following tables provide information on amortized cost of loans receivable based on borrower payment activity.
June 30, 2023 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands, except ratio data)
Commercial loans |  |  |  |  |  |  |
Multi-family | $ | 2,852,482 |  |  | 99.8 | % |  | $ | 5,951 |  |  | 0.2 | %
Commercial real estate | 3,217,364 |  |  | 100.0 |  |  | 1,087 |  |  | — |
Commercial & industrial | 2,459,054 |  |  | 98.7 |  |  | 31,686 |  |  | 1.3 |
Construction | 1,759,434 |  |  | 100.0 |  |  | — |  |  | 0.0 |
Land - acquisition & development | 161,658 |  |  | 100.0 |  |  | — |  |  | — |
Total commercial loans | 10,449,992 |  |  | 99.6 |  |  | 38,724 |  |  | 0.4 |
Consumer loans |  |  |  |  |  |  |
Single-family residential | 6,243,082 |  |  | 99.8 |  |  | 15,510 |  |  | 0.2 |
Construction - custom | 375,958 |  |  | 100.0 |  |  | 87 |  |  | — |
Land - consumer lot loans | 133,872 |  |  | 99.9 |  |  | 122 |  |  | 0.1 |
HELOC | 227,331 |  |  | 99.6 |  |  | 801 |  |  | 0.4 |
Consumer | 76,746 |  |  | 100.0 |  |  | 32 |  |  | 0.0 |
Total consumer loans | 7,056,989 |  |  | 99.8 |  |  | 16,552 |  |  | 0.2 |
Total loans | $ | 17,506,981 |  |  | 99.7 | % |  | $ | 55,276 |  |  | 0.3 | %
September 30, 2022 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands, except ratio data)
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 | 1,423,891 |  |  | 100.0 |  |  | — |  |  | — |
Land - acquisition & development | 223,616 |  |  | 100.0 |  |  | — |  |  | — |
Total commercial loans | 9,712,205 |  |  | 99.9 |  |  | 16,296 |  |  | 0.1 |
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 |  |  | 0.0 |
Total consumer loans | 6,539,633 |  |  | 99.7 |  |  | 18,238 |  |  | 0.4 |
Total loans | $ | 16,251,838 |  |  | 99.8 | % |  | $ | 34,534 |  |  | 0.2 | %

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