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Allowance for Losses on Loans
 9 Months Ended
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, 2023Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers (1)
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$13,038 $— $— $(62)$12,976 
   Commercial real estate27,803 — — 329 28,132 
   Commercial & industrial63,301 (10,469)10 9,073 61,915 
   Construction26,027 — — 1,889 27,916 
   Land - acquisition & development7,496 — 24 (274)7,246 
      Total commercial loans137,665 (10,469)34 10,955 138,185 
Consumer loans
   Single-family residential26,916 — 18 149 27,083 
   Construction - custom3,456 — — (235)3,221 
   Land - consumer lot loans3,945 — 9 (184)3,770 
   HELOC2,662 — — 81 2,743 
   Consumer2,776 (74)131 234 3,067 
      Total consumer loans39,755 (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, 2022Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers (1)
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$14,463 $— $— $(1,889)$12,574 
   Commercial real estate24,682 — 23 595 25,300 
   Commercial & industrial53,903 (27)8 1,040 54,924 
   Construction22,707 — — 3,127 25,834 
   Land - acquisition & development13,685 (1)11 (1,468)12,227 
      Total commercial loans129,440 (28)42 1,405 130,859 
Consumer loans
   Single-family residential28,992 — 252 (3,027)26,217 
   Construction - custom3,129 — — 225 3,354 
   Land - consumer lot loans5,105 — 2 113 5,220 
   HELOC2,475 — 249 (92)2,632 
   Consumer2,243 (253)331 376 2,697 
      Total consumer loans41,944 (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, 2023Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers (1)
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$12,013 $— $— $963 $12,976 
   Commercial real estate25,814 — 5 2,313 28,132 
   Commercial & industrial57,210 (16,605)84 21,226 61,915 
   Construction26,161 — — 1,755 27,916 
   Land - acquisition & development12,278 — 54 (5,086)7,246 
      Total commercial loans133,476 (16,605)143 21,171 138,185 
Consumer loans
   Single-family residential25,518 (34)552 1,047 27,083 
   Construction - custom3,410 — — (189)3,221 
   Land - consumer lot loans5,047 — 14 (1,291)3,770 
   HELOC2,482 — 1 260 2,743 
   Consumer2,875 (258)448 2 3,067 
      Total consumer loans39,332 (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, 2022Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers (1)
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$16,949 $— $— $(4,375)$12,574 
   Commercial real estate23,437 (529)820 1,572 25,300 
   Commercial & industrial45,957 (943)72 9,838 54,924 
   Construction25,585 — 2,179 (1,930)25,834 
   Land - acquisition & development13,447 (3)51 (1,268)12,227 
      Total commercial loans125,375 (1,475)3,122 3,837 130,859 
Consumer loans
   Single-family residential30,978 — 804 (5,565)26,217 
   Construction - custom4,907 — — (1,553)3,354 
   Land - consumer lot loans4,939 (27)47 261 5,220 
   HELOC2,390 — 350 (108)2,632 
   Consumer2,711 (368)726 (372)2,697 
      Total consumer loans45,925 (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, 2023Internally Assigned Grade
 PassSpecial mentionSubstandardDoubtfulLossTotal
 (In thousands, except ratio data)
Loan type
Commercial loans
  Multi-family$2,749,291 $90,187 $18,955 $— $— $2,858,433 
  Commercial real estate3,114,517 23,238 80,696 — — 3,218,451 
  Commercial & industrial2,329,675 6,815 154,250 — — 2,490,740 
  Construction1,732,137 4,739 22,558 — — 1,759,434 
  Land - acquisition & development161,388 — 270 — — 161,658 
    Total commercial loans10,087,008 124,979 276,729 — — 10,488,716 
Consumer loans
  Single-family residential6,239,912 — 18,680 — — 6,258,592 
  Construction - custom375,957 — 88 — — 376,045 
  Land - consumer lot loans133,758 — 236 — — 133,994 
  HELOC227,331 — 801 — — 228,132 
  Consumer76,765 — 13 — — 76,778 
    Total consumer loans7,053,723 — 19,818 — — 7,073,541 
Total$17,140,731 $124,979 $296,547 $— $— $17,562,257 
Total grade as a % of total loans97.60 %0.71 %1.69 %— %— %
September 30, 2022Internally Assigned Grade
 PassSpecial mentionSubstandardDoubtfulLossTotal
 (In thousands, except ratio data)
Loan type
Commercial loans
  Multi-family$2,612,669 $— $13,810 $— $— $2,626,479 
  Commercial real estate3,054,241 1,594 55,277 — — 3,111,112 
  Commercial & industrial2,196,767 31,656 114,980 — — 2,343,403 
  Construction1,421,634 — 2,257 — — 1,423,891 
  Land - acquisition & development223,616 — — — — 223,616 
    Total commercial loans9,508,927 33,250 186,324 — — 9,728,501 
Consumer loans
  Single-family residential5,706,199 — 20,780 — — 5,726,979 
  Construction - custom396,908 — 435 — — 397,343 
  Land - consumer lot loans151,723 — 222 — — 151,945 
  HELOC205,800 — 233 — — 206,033 
  Consumer75,570 — 1 — — 75,571 
    Total consumer loans6,536,200 — 21,671 — — 6,557,871 
Total loans$16,045,127 $33,250 $207,995 $— $— $16,286,372 
Total grade as a % of total loans98.52 %0.20 %1.28 %— %— %
The following tables provide information on amortized cost of loans receivable based on borrower payment activity.

June 30, 2023Performing LoansNon-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 estate3,217,364 100.0 1,087 — 
   Commercial & industrial2,459,054 98.7 31,686 1.3 
   Construction1,759,434 100.0 — 0.0 
   Land - acquisition & development161,658 100.0 — — 
      Total commercial loans10,449,992 99.6 38,724 0.4 
Consumer loans
   Single-family residential6,243,082 99.8 15,510 0.2 
   Construction - custom375,958 100.0 87 — 
   Land - consumer lot loans133,872 99.9 122 0.1 
   HELOC227,331 99.6 801 0.4 
   Consumer76,746 100.0 32 0.0 
      Total consumer loans7,056,989 99.8 16,552 0.2 
Total loans$17,506,981 99.7 %$55,276 0.3 %
September 30, 2022Performing LoansNon-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 estate3,106,421 99.8 4,691 0.2 
   Commercial & industrial2,337,710 99.8 5,693 0.2 
   Construction1,423,891 100.0 — — 
   Land - acquisition & development223,616 100.0 — — 
      Total commercial loans9,712,205 99.9 16,296 0.1 
Consumer loans
   Single-family residential5,709,529 99.7 17,450 0.3 
   Construction - custom396,908 99.9 435 0.1 
   Land - consumer lot loans151,861 99.9 84 0.1 
   HELOC205,800 99.9 233 0.1 
   Consumer75,535 100.0 36 0.0 
      Total consumer loans6,539,633 99.7 18,238 0.4 
Total loans$16,251,838 99.8 %$34,534 0.2 %