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Allowance for Losses on Loans
 6 Months Ended
Mar. 31, 2024
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 March 31, 2024Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers1
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$13,791 $— $— $8,188 $21,979 
   Commercial real estate29,007 — — 3,984 32,991 
   Commercial & industrial60,836 (65)32 (1,542)59,261 
   Construction28,863 — — (1,546)27,317 
   Land - acquisition & development6,658 — 21 1,186 7,865 
      Total commercial loans139,155 (65)53 10,270 149,413 
Consumer loans
   Single-family residential28,556 (131)55 12,574 41,054 
   Construction - custom2,262 — — (344)1,918 
   Land - consumer lot loans3,345 — 46 (177)3,214 
   HELOC2,973 — 1 — 2,974 
   Consumer3,029 (149)44 80 3,004 
      Total consumer loans40,165 (280)146 12,133 52,164 
Total ACL - loans$179,320 $(345)$199 $22,403 $201,577 
1Provision & transfer amounts within the table include the $16,000,000 initial provision related to non-PCD loans acquired during the quarter and the $7,403,000 PCD ACL amount included in the Merger purchase price allocation but do not include provision for unfunded commitments of $1,000,000.
Three Months Ended March 31, 2023Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers1
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$12,324 $— $— $714 $13,038 
   Commercial real estate27,380 — 1 422 27,803 
   Commercial & industrial63,873 (6,054)42 5,440 63,301 
   Construction26,133 — — (106)26,027 
   Land - acquisition & development8,572 — 14 (1,090)7,496 
      Total commercial loans138,282 (6,054)57 5,380 137,665 
Consumer loans
   Single-family residential25,475 (34)104 1,371 26,916 
   Construction - custom3,500 — — (44)3,456 
   Land - consumer lot loans4,142 — 5 (202)3,945 
   HELOC2,588 — — 74 2,662 
   Consumer2,810 (38)83 (79)2,776 
      Total consumer loans38,515 (72)192 1,120 39,755 
Total loans$176,797 $(6,126)$249 $6,500 $177,420 
1Provision & transfer amounts within the table do not include provision recapture from unfunded commitments of $3,000,000.
Six Months Ended March 31, 2024Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers1
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$13,155 $— $— $8,824 $21,979 
   Commercial real estate28,842 — 2 4,147 32,991 
   Commercial & industrial58,773 (127)64 551 59,261 
   Construction29,408 — — (2,091)27,317 
   Land - acquisition & development7,016 (18)71 796 7,865 
      Total commercial loans137,194 (145)137 12,227 149,413 
Consumer loans
   Single-family residential28,029 (131)175 12,981 41,054 
   Construction - custom2,781 — — (863)1,918 
   Land - consumer lot loans3,512 — 55 (353)3,214 
   HELOC2,859 — 2 113 2,974 
   Consumer2,832 (362)236 298 3,004 
      Total consumer loans40,013 (493)468 12,176 52,164 
Total ACL - loans$177,207 $(638)$605 $24,403 $201,577 
1Provision & transfer amounts within the table include the $16,000,000 initial provision related to non-PCD loans acquired during the quarter and the $7,403,000 PCD ACL amount included in the Merger purchase price allocation but do not include provision recapture from unfunded commitments of $1,000,000.
Six Months Ended March 31, 2023Beginning AllowanceCharge-offsRecoveries
Provision &
Transfers1
Ending Allowance
 (In thousands)
Commercial loans
   Multi-family$12,013 $— $— $1,025 $13,038 
   Commercial real estate25,814 — 5 1,984 27,803 
   Commercial & industrial57,210 (6,136)74 12,153 63,301 
   Construction26,161 — — (134)26,027 
   Land - acquisition & development12,278 — 30 (4,812)7,496 
      Total commercial loans133,476 (6,136)109 10,216 137,665 
Consumer loans
   Single-family residential25,518 (34)534 898 26,916 
   Construction - custom3,410 — — 46 3,456 
   Land - consumer lot loans5,047 — 5 (1,107)3,945 
   HELOC2,482 — 1 179 2,662 
   Consumer2,875 (184)317 (232)2,776 
      Total consumer loans39,332 (218)857 (216)39,755 
Total loans$172,808 $(6,354)$966 $10,000 $177,420 
1Provision & transfer amounts within the table do not include provision recapture from unfunded commitments of $4,000,000.

The Company recorded a $16,000,000 provision for credit losses for the three months ended March 31, 2024, compared with a provision for credit losses of $3,500,000 for the three months ended March 31, 2023. The provision in the three months ended March 31, 2024 was primarily due to the initial reserve needed for the acquired LBC non-PCD loans. The increase in the overall ACL was a combination of the provision recorded and the reserve for LBC PCD loans booked in purchase accounting.
The provision for the three months ended March 31, 2023 was primarily due to growth in net loans receivable combined with the changing economic outlook amid concerns around a looming recession and recent macro-economic events. The Company recorded a $16,000,000 provision for credit losses for the six months ended March 31, 2024, compared with a provision for credit losses of $6,000,000 for the six months ended March 31, 2023.

Charge-offs, net of recoveries, totaled $146,000 for the three months ended March 31, 2024, compared to $5,877,000 during the three months ended March 31, 2023. Charge-offs, net of recoveries, totaled $33,000 for the six months ended March 31, 2024, compared to $5,388,000 during the six months ended March 31, 2023.

Non-performing assets were $68,361,000, or 0.23% of total assets, at March 31, 2024, compared to $57,924,000, or 0.26% of total assets, at September 30, 2023. Non-accrual loans were $60,806,000 at March 31, 2024, compared to $50,422,000 at September 30, 2023. Delinquencies, as a percent of total loans, were 0.36% at March 31, 2024, compared to 0.36% at September 30, 2023.

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.
March 31, 2024Internally Assigned Grade
 PassSpecial mentionSubstandardDoubtfulLossTotal
 (In thousands, except ratio data)
Loan type
Commercial loans
  Multi-family$3,944,926 $112,984 $31,809 $— $— $4,089,719 
  Commercial real estate3,386,918 42,394 115,572 — — 3,544,884 
  Commercial & industrial2,092,707 71,783 119,432 — — 2,283,922 
  Construction1,600,992 2,888 19,616 — — 1,623,496 
  Land - acquisition & development175,101 354 249 — — 175,704 
    Total commercial loans11,200,644 230,403 286,678 — — 11,717,725 
Consumer loans
  Single-family residential8,599,901 — 20,015 — — 8,619,916 
  Construction - custom223,290 — 87 — — 223,377 
  Land - consumer lot loans114,256 — — — — 114,256 
  HELOC246,814 — 491 — — 247,305 
  Consumer74,117 — 140 — — 74,257 
    Total consumer loans9,258,378 — 20,733 — — 9,279,111 
Total$20,459,022 $230,403 $307,411 $— $— $20,996,836 
Total grade as a % of total loans97.44 %1.10 %1.47 %— %— %
September 30, 2023Internally Assigned Grade
 PassSpecial mentionSubstandardDoubtfulLossTotal Gross Loans
 (In thousands, except ratio data)
Loan type
Commercial loans
  Multi-family$2,772,538 $90,428 $23,628 $— $— $2,886,594 
  Commercial real estate3,207,596 4,847 97,658 — — 3,310,101 
  Commercial & industrial2,164,876 6,647 143,795 — — 2,315,318 
  Construction1,818,266 — 20,670 — — 1,838,936 
  Land - acquisition & development156,390 — 271 — — 156,661 
    Total commercial loans10,119,666 101,922 286,022 — — 10,507,610 
Consumer loans
  Single-family residential6,370,936 — 18,054 — — 6,388,990 
  Construction - custom324,363 — 88 — — 324,451 
  Land - consumer lot loans124,588 — 254 — — 124,842 
  HELOC237,018 — 736 — — 237,754 
  Consumer70,098 — 12 — — 70,110 
    Total consumer loans7,127,003 — 19,144 — — 7,146,147 
Total loans$17,246,669 $101,922 $305,166 $— $— $17,653,757 
Total grade as a % of total gross loans97.69 %0.58 %1.73 %— %— %

The following tables provide information on the amortized cost of loans receivable based on borrower payment activity.

March 31, 2024Performing LoansNon-Performing Loans
 Amount% of Total
Loans		Amount% of Total
Loans
 (In thousands, except ratio data)
Commercial loans
   Multi-family$4,081,342 99.8 %$8,377 0.2 %
   Commercial real estate3,517,862 99.2 27,022 0.8 
   Commercial & industrial2,279,486 99.8 4,436 0.2 
   Construction1,623,496 100.0 — 0.0 
   Land - acquisition & development175,592 99.9 112 0.1 
      Total commercial loans11,677,778 99.7 39,947 0.3 
Consumer loans
   Single-family residential8,599,900 99.8 20,016 0.2 
   Construction - custom223,289 100.0 88 — 
   Land - consumer lot loans114,256 100.0 — 0.0 
   HELOC246,814 99.8 491 0.2 
   Consumer73,993 99.6 264 0.4 
      Total consumer loans9,258,252 99.8 20,859 0.2 
Total loans$20,936,030 99.7 %$60,806 0.3 %
September 30, 2023Performing LoansNon-Performing Loans
 Amount% of Total
Loans		Amount% of Total
Loans
 (In thousands, except ratio data)
Commercial loans
   Multi-family$2,881,467 99.8 %$5,127 0.2 %
   Commercial real estate3,286,666 99.3 23,435 0.7 
   Commercial & industrial2,309,236 99.7 6,082 0.3 
   Construction1,838,936 100.0 — — 
   Land - acquisition & development156,661 100.0 — — 
      Total commercial loans10,472,966 99.7 34,644 0.3 
Consumer loans
   Single-family residential6,374,072 99.8 14,918 0.2 
   Construction - custom324,363 100.0 88 — 
   Land - consumer lot loans124,833 100.0 9 — 
   HELOC237,018 99.7 736 0.3 
   Consumer70,083 100.0 27 0.0 
      Total consumer loans7,130,369 99.8 15,778 0.2 
Total loans$17,603,335 99.7 %$50,422 0.3 %