ALLOWANCE FOR LOAN LOSSES

12 Months Ended

Sep. 30, 2025

For a detailed discussion of loans and credit quality, including accounting policies and the CECL methodology used to estimate the

The following tables summarize the activity in the allowance for loan losses by loan portfolio segment and class.


Twelve Months Ended September 30, 2025	Beginning Allowance	Charge-offs	Recoveries	Provision & Transfers	Ending Allowance
	(In thousands)
Commercial loans
Multi-family	$25,248	$(555)	$—	$1,260	$25,953
Commercial real estate	39,210	(9,652)	169	12,261	41,988
Commercial & industrial	58,748	(1,291)	252	1,454	59,163
Construction	22,267	—	—	(4,131)	18,136
Land - acquisition & development	7,900	—	33	(1,039)	6,894
Total commercial loans	153,373	(11,498)	454	9,805	152,134
Consumer loans
Single-family residential	40,523	(338)	572	(1,877)	38,880
Construction - custom	1,427	—	4	(821)	610
Land - consumer lot loans	2,564	—	—	(460)	2,104
HELOC	3,049	—	3	17	3,069
Consumer	2,817	(1,334)	354	1,086	2,923
Total consumer loans	50,380	(1,672)	933	(2,055)	47,586
	$203,753	$(13,170)	$1,387	$7,750	$199,720


Twelve Months Ended September 30, 2024	Beginning Allowance	Charge-offs	Recoveries	Provision & Transfers1	Ending Allowance
	(In thousands)
Commercial loans
Multi-family	$13,155	$—	$—	$12,093	$25,248
Commercial real estate	28,842	(203)	4	10,567	$39,210
Commercial & industrial	58,773	(2,611)	1,069	1,517	$58,748
Construction	29,408	—	—	(7,141)	$22,267
Land - acquisition & development	7,016	(149)	105	928	$7,900
Total commercial loans	137,194	(2,963)	1,178	17,964	153,373
Consumer loans
Single-family residential	28,029	(144)	381	12,257	40,523
Construction - custom	2,781	—	1	(1,355)	1,427
Land - consumer lot loans	3,512	—	58	(1,006)	2,564
HELOC	2,859	—	4	186	3,049
Consumer	2,832	(518)	647	(144)	2,817
Total consumer loans	40,013	(662)	1,091	9,938	50,380
	$177,207	$(3,625)	$2,269	$27,902	$203,753
1Provision & transfer amounts within the table include the $16,000,000 initial provision related to non-PCD loans acquired during the year 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.

The Company recorded a provision for credit losses of $7,750,000 in 2025, compared to a provision of $17,500,000 for 2024 which

included the provision for the initial reserves for non-PCD loans acquired in the Merger. The decrease in the overall ACL during

fiscal 2025 was the result of the decrease in net loan balances led by payoffs in single-family, commercial construction and land

A&D. For the year ended September 30, 2025, net charge-offs were $11,783,000, compared to $1,356,000 in the prior year. A loan

is charged-off when the loss is estimable and it is confirmed that the borrower is not expected to be able to meet its contractual

obligations.

Non-accrual loans increased to $128,628,000 as of September 30, 2025, from $69,541,000 as of September 30, 2024. Non-

performing assets totaled $143,022,000, or 0.54% of total assets, at September 30, 2025, compared to $77,418,000, or 0.28% of

total assets, as of September 30, 2024.

As of September 30, 2025, the allowance for loan losses of $199,720,000 is for loans that are evaluated on a pooled basis, which

was comprised of $131,652,000 related to the quantitative component and $68,068,000 related to management's qualitative overlays

(including the forecast component of the reserve).

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." It is important to note, just because a loan is risk-rated below a

"pass" rating, it does not necessarily indicate there will be future charge-offs on that loan. Loans are downgraded because of either

borrower specific or industry-wide financial or operating stresses.

The following tables provide the amortized cost of loans receivable based on risk rating categories (as previously defined).


September 30, 2025	Internally Assigned Grade
	Pass	Special mention	Substandard	Doubtful	Loss	Total
	(In thousands)
Loan type
Commercial loans
Multi-family	$4,337,347	$136,817	$154,807	$2,350	$—	$4,631,321
Commercial real estate	3,339,062	61,580	185,527	2,781	—	3,588,950
Commercial & industrial	2,086,750	44,998	254,591	—	24	2,386,363
Construction	1,091,682	4,435	8,984	—	—	1,105,101
Land - acquisition & development	139,663	—	259	—	—	139,922
Total commercial loans	10,994,504	247,830	604,168	5,131	24	11,851,657
Consumer loans
Single-family residential	7,913,120	—	23,811	—	—	7,936,931
Construction - custom	77,483	—	760	—	—	78,243
Land - consumer lot loans	88,613	—	83	—	—	88,696
HELOC	270,874	—	412	—	—	271,286
Consumer	61,406	—	119	—	—	61,525
Total consumer loans	8,411,496	—	25,185	—	—	8,436,681
Total loans	$19,406,000	$247,830	$629,353	$5,131	$24	$20,288,338
Total grade as a % of total loans	95.7%	1.2%	3.1%	—%	—%


September 30, 2024	Internally Assigned Grade
	Pass	Special mention	Substandard	Doubtful	Loss	Total Gross Loans
	(In thousands)
Loan type
Commercial loans
Multi-family	$4,476,283	$12,377	$67,540	$—	$—	$4,556,200
Commercial real estate	3,587,682	40,297	104,176	—	—	3,732,155
Commercial & industrial	2,107,780	21,264	203,688	—	—	2,332,732
Construction	1,392,332	3,221	28,463	—	—	1,424,016
Land - acquisition & development	159,919	—	398	—	—	160,317
Total commercial loans	11,723,996	77,159	404,265	—	—	12,205,420
Consumer loans
Single-family residential	8,258,812	—	21,488	—	—	8,280,300
Construction - custom	181,567	—	848	—	—	182,415
Land - consumer lot loans	108,060	—	—	—	—	108,060
HELOC	269,261	—	596	—	—	269,857
Consumer	73,824	—	231	—	—	74,055
Total consumer loans	8,891,524	—	23,163	—	—	8,914,687
Total gross loans	$20,615,520	$77,159	$427,428	$—	$—	$21,120,107
Total grade as a % of total gross loans	97.6%	0.4%	2.0%	—%	—%

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


September 30, 2025	Performing Loans		Non-Performing Loans
	Amount	% of Total Loans	Amount	% of Total Loans
	(In thousands)		(In thousands)
Commercial loans
Multi-family	$4,612,200	99.6%	$19,121	0.4%
Commercial real estate	3,518,978	98.1	69,972	1.9
Commercial & industrial	2,375,316	99.5	11,047	0.5
Construction	1,101,701	99.7	3,400	0.3
Land - acquisition & development	139,922	100.0	—	—
Total commercial loans	11,748,117	99.1	103,540	0.9
Consumer loans
Single-family residential	7,913,190	99.7	23,741	0.3
Construction - custom	77,483	99.0	760	1.0
Land - consumer lot loans	88,673	100.0	23	—
HELOC	270,874	99.8	412	0.2
Consumer	61,373	99.8	152	0.2
Total consumer loans	8,411,593	99.7	25,088	0.3
Total	$20,159,710	99.4%	$128,628	0.6%


September 30, 2024	Performing Loans		Non-Performing Loans
	Amount	% of Total Loans	Amount	% of Total Loans
	(In thousands)		(In thousands)
Commercial loans
Multi-family	$4,537,457	99.6%	$18,743	0.4%
Commercial real estate	3,705,793	99.3	26,362	0.7
Commercial & industrial	2,332,732	100.0	—	—
Construction	1,422,896	99.9	1,120	0.1
Land - acquisition & development	160,243	100.0	74	—
Total commercial loans	12,159,121	99.6	46,299	0.4
Consumer loans
Single-family residential	8,258,812	99.7	21,488	0.3
Construction - custom	181,567	99.5	848	0.5
Land - consumer lot loans	108,060	100.0	—	—
HELOC	269,261	99.8	596	0.2
Consumer	73,745	99.6	310	0.4
Total consumer loans	8,891,445	99.7	23,242	0.3
Total gross loans	$21,050,566	99.7%	$69,541	0.3%