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Allowance for Losses on Loans | 9 Months Ended
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Jun. 30, 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 June 30, 2024 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers 1 |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 21,979 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,220 |  |  | $ | 25,199 |
Commercial real estate | 32,991 |  |  | (203) |  |  | 2 |  |  | 6,966 |  |  | 39,756 |
Commercial & industrial | 59,261 |  |  | (2,346) |  |  | 1,003 |  |  | (85) |  |  | 57,833 |
Construction | 27,317 |  |  | — |  |  | — |  |  | (4,610) |  |  | 22,707 |
Land - acquisition & development | 7,865 |  |  | — |  |  | 17 |  |  | (182) |  |  | 7,700 |
Total commercial loans | 149,413 |  |  | (2,549) |  |  | 1,022 |  |  | 5,309 |  |  | 153,195 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 41,054 |  |  | (13) |  |  | 118 |  |  | (843) |  |  | 40,316 |
Construction - custom | 1,918 |  |  | — |  |  | — |  |  | (424) |  |  | 1,494 |
Land - consumer lot loans | 3,214 |  |  | — |  |  | 2 |  |  | (568) |  |  | 2,648 |
HELOC | 2,974 |  |  | — |  |  | 1 |  |  | (51) |  |  | 2,924 |
Consumer | 3,004 |  |  | (151) |  |  | 317 |  |  | 77 |  |  | 3,247 |
Total consumer loans | 52,164 |  |  | (164) |  |  | 438 |  |  | (1,809) |  |  | 50,629 |
Total ACL - loans | $ | 201,577 |  |  | $ | (2,713) |  |  | $ | 1,460 |  |  | $ | 3,500 |  |  | $ | 203,824 |
1 Provision & transfer amounts within the table do not reflect a provision recapture from unfunded commitments of $2,000,000.
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 reflect a provision recapture from unfunded commitments of $2,000,000.
Nine Months Ended June 30, 2024 | Beginning Allowance |  | Charge-offs |  | Recoveries |  | Provision & Transfers 1 |  | Ending Allowance
| (In thousands)
Commercial loans |  |  |  |  |  |  |  |  |
Multi-family | $ | 13,155 |  |  | $ | — |  |  | $ | — |  |  | $ | 12,044 |  |  | $ | 25,199 |
Commercial real estate | 28,842 |  |  | (203) |  |  | 4 |  |  | 11,113 |  |  | 39,756 |
Commercial & industrial | 58,773 |  |  | (2,473) |  |  | 1,067 |  |  | 466 |  |  | 57,833 |
Construction | 29,408 |  |  | — |  |  | — |  |  | (6,701) |  |  | 22,707 |
Land - acquisition & development | 7,016 |  |  | (18) |  |  | 88 |  |  | 614 |  |  | 7,700 |
Total commercial loans | 137,194 |  |  | (2,694) |  |  | 1,159 |  |  | 17,536 |  |  | 153,195 |
Consumer loans |  |  |  |  |  |  |  |  |
Single-family residential | 28,029 |  |  | (144) |  |  | 293 |  |  | 12,138 |  |  | 40,316 |
Construction - custom | 2,781 |  |  | — |  |  | — |  |  | (1,287) |  |  | 1,494 |
Land - consumer lot loans | 3,512 |  |  | — |  |  | 57 |  |  | (921) |  |  | 2,648 |
HELOC | 2,859 |  |  | — |  |  | 3 |  |  | 62 |  |  | 2,924 |
Consumer | 2,832 |  |  | (513) |  |  | 553 |  |  | 375 |  |  | 3,247 |
Total consumer loans | 40,013 |  |  | (657) |  |  | 906 |  |  | 10,367 |  |  | 50,629 |
Total ACL - loans | $ | 177,207 |  |  | $ | (3,351) |  |  | $ | 2,065 |  |  | $ | 27,903 |  |  | $ | 203,824 |
1 Provision & 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 reflect a provision recapture from unfunded commitments of $3,000,000.
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 reflect a provision recapture from unfunded commitments of $6,000,000. The Company recorded a $1,500,000 provision for credit losses for the three months ended June 30, 2024, compared with a provision for credit losses of $9,000,000 for the three months ended June 30, 2023. The provision in the three months ended June 30, 2024 was primarily due to prolonged and increased borrower sensitivity to high interest rates and operating costs resulting from inflationary pressures in the commercial portfolio. This was offset by a reduction in balance resulting from reclassifying a portion of the LBC single-family loans as Held for Sale. The provision for the three months ended June 30, 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 $17,500,000 provision for credit losses for the nine months ended June 30, 2024, compared with a provision for credit losses of $15,000,000 for the nine months ended June 30, 2023. The June 30, 2024 year-to-date provision included 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. Charge-offs, net of recoveries, totaled $1,253,000 for the three months ended June 30, 2024, compared to $10,351,000 during the three months ended June 30, 2023. Charge-offs, net of recoveries, totaled $1,286,000 for the nine months ended June 30, 2024, compared to $15,739,000 during the nine months ended June 30, 2023. Non-performing assets were $68,787,000, or 0.24% of total assets, at June 30, 2024, compared to $57,924,000, or 0.26% of total assets, at September 30, 2023. Non-accrual loans were $61,268,000 at June 30, 2024, compared to $50,422,000 at September 30, 2023. Delinquencies, as a percent of total loans, were 0.22% at June 30, 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.
June 30, 2024 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total
| (In thousands, except ratio data)
Loan type |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  |  |  |  |  |  |  |  |  |  |
Multi-family | $ | 4,357,741 |  |  | $ | 99,779 |  |  | $ | 55,803 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,513,323 |
Commercial real estate | 3,597,165 |  |  | 42,206 |  |  | 107,574 |  |  | — |  |  | — |  |  | 3,746,945 |
Commercial & industrial | 2,116,078 |  |  | 90,382 |  |  | 182,776 |  |  | — |  |  | — |  |  | 2,389,236 |
Construction | 1,412,102 |  |  | 11,189 |  |  | 16,861 |  |  | — |  |  | — |  |  | 1,440,152 |
Land - acquisition & development | 156,011 |  |  | 339 |  |  | 74 |  |  | — |  |  | — |  |  | 156,424 |
Total commercial loans | 11,639,097 |  |  | 243,895 |  |  | 363,088 |  |  | — |  |  | — |  |  | 12,246,080 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Single-family residential | 8,165,936 |  |  | — |  |  | 20,425 |  |  | — |  |  | — |  |  | 8,186,361 |
Construction - custom | 190,345 |  |  | — |  |  | 88 |  |  | — |  |  | — |  |  | 190,433 |
Land - consumer lot loans | 111,125 |  |  | — |  |  | 449 |  |  | — |  |  | — |  |  | 111,574 |
HELOC | 258,075 |  |  | — |  |  | 758 |  |  | — |  |  | — |  |  | 258,833 |
Consumer | 84,441 |  |  | — |  |  | 21 |  |  | — |  |  | — |  |  | 84,462 |
Total consumer loans | 8,809,922 |  |  | — |  |  | 21,741 |  |  | — |  |  | — |  |  | 8,831,663 |
Total | $ | 20,449,019 |  |  | $ | 243,895 |  |  | $ | 384,829 |  |  | $ | — |  |  | $ | — |  |  | $ | 21,077,743 |
Total grade as a % of total loans | 97.02 | % |  | 1.16 | % |  | 1.84 | % |  | — | % |  | — | % |  |
September 30, 2023 | Internally Assigned Grade |  |
| Pass |  | Special mention |  | Substandard |  | Doubtful |  | Loss |  | Total 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 estate | 3,207,596 |  |  | 4,847 |  |  | 97,658 |  |  | — |  |  | — |  |  | 3,310,101 |
Commercial & industrial | 2,164,876 |  |  | 6,647 |  |  | 143,795 |  |  | — |  |  | — |  |  | 2,315,318 |
Construction | 1,818,266 |  |  | — |  |  | 20,670 |  |  | — |  |  | — |  |  | 1,838,936 |
Land - acquisition & development | 156,390 |  |  | — |  |  | 271 |  |  | — |  |  | — |  |  | 156,661 |
Total commercial loans | 10,119,666 |  |  | 101,922 |  |  | 286,022 |  |  | — |  |  | — |  |  | 10,507,610 |
Consumer loans |  |  |  |  |  |  |  |  |  |  |
Single-family residential | 6,370,936 |  |  | — |  |  | 18,054 |  |  | — |  |  | — |  |  | 6,388,990 |
Construction - custom | 324,363 |  |  | — |  |  | 88 |  |  | — |  |  | — |  |  | 324,451 |
Land - consumer lot loans | 124,588 |  |  | — |  |  | 254 |  |  | — |  |  | — |  |  | 124,842 |
HELOC | 237,018 |  |  | — |  |  | 736 |  |  | — |  |  | — |  |  | 237,754 |
Consumer | 70,098 |  |  | — |  |  | 12 |  |  | — |  |  | — |  |  | 70,110 |
Total consumer loans | 7,127,003 |  |  | — |  |  | 19,144 |  |  | — |  |  | — |  |  | 7,146,147 |
Total loans | $ | 17,246,669 |  |  | $ | 101,922 |  |  | $ | 305,166 |  |  | $ | — |  |  | $ | — |  |  | $ | 17,653,757 |
Total grade as a % of total gross loans | 97.69 | % |  | 0.58 | % |  | 1.73 | % |  | — | % |  | — | % |  |
The following tables provide information on the amortized cost of loans receivable based on borrower payment activity.
June 30, 2024 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands, except ratio data)
Commercial loans |  |  |  |  |  |  |
Multi-family | $ | 4,503,339 |  |  | 99.8 | % |  | $ | 9,984 |  |  | 0.2 | %
Commercial real estate | 3,720,537 |  |  | 99.3 |  |  | 26,408 |  |  | 0.7 |
Commercial & industrial | 2,387,098 |  |  | 99.9 |  |  | 2,138 |  |  | 0.1 |
Construction | 1,439,032 |  |  | 99.9 |  |  | 1,120 |  |  | 0.1 |
Land - acquisition & development | 156,350 |  |  | 100.0 |  |  | 74 |  |  | — |
Total commercial loans | 12,206,356 |  |  | 99.7 |  |  | 39,724 |  |  | 0.3 |
Consumer loans |  |  |  |  |  |  |
Single-family residential | 8,165,939 |  |  | 99.8 |  |  | 20,422 |  |  | 0.2 |
Construction - custom | 190,345 |  |  | 100.0 |  |  | 88 |  |  | — |
Land - consumer lot loans | 111,338 |  |  | 99.8 |  |  | 236 |  |  | 0.2 |
HELOC | 258,075 |  |  | 99.7 |  |  | 758 |  |  | 0.3 |
Consumer | 84,422 |  |  | 100.0 |  |  | 40 |  |  | 0.0 |
Total consumer loans | 8,810,119 |  |  | 99.8 |  |  | 21,544 |  |  | 0.2 |
Total loans | $ | 21,016,475 |  |  | 99.7 | % |  | $ | 61,268 |  |  | 0.3 | %
September 30, 2023 | Performing Loans |  | Non-Performing Loans
| Amount |  | % of Total Loans |  | Amount |  | % of Total Loans
| (In thousands, except ratio data)
Commercial loans |  |  |  |  |  |  |
Multi-family | $ | 2,881,467 |  |  | 99.8 | % |  | $ | 5,127 |  |  | 0.2 | %
Commercial real estate | 3,286,666 |  |  | 99.3 |  |  | 23,435 |  |  | 0.7 |
Commercial & industrial | 2,309,236 |  |  | 99.7 |  |  | 6,082 |  |  | 0.3 |
Construction | 1,838,936 |  |  | 100.0 |  |  | — |  |  | — |
Land - acquisition & development | 156,661 |  |  | 100.0 |  |  | — |  |  | — |
Total commercial loans | 10,472,966 |  |  | 99.7 |  |  | 34,644 |  |  | 0.3 |
Consumer loans |  |  |  |  |  |  |
Single-family residential | 6,374,072 |  |  | 99.8 |  |  | 14,918 |  |  | 0.2 |
Construction - custom | 324,363 |  |  | 100.0 |  |  | 88 |  |  | — |
Land - consumer lot loans | 124,833 |  |  | 100.0 |  |  | 9 |  |  | — |
HELOC | 237,018 |  |  | 99.7 |  |  | 736 |  |  | 0.3 |
Consumer | 70,083 |  |  | 100.0 |  |  | 27 |  |  | 0.0 |
Total consumer loans | 7,130,369 |  |  | 99.8 |  |  | 15,778 |  |  | 0.2 |
Total loans | $ | 17,603,335 |  |  | 99.7 | % |  | $ | 50,422 |  |  | 0.3 | %

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