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Allowance for Losses on Loans

6 Months Ended

Mar. 31, 2025

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, 2025			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers1						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	25,997					$	—					$	—					$	559					$	26,556
Commercial real estate			37,873						(4,392)						169						4,819						38,469
Commercial & industrial			60,474						(236)						38						(129)						60,147
Construction			20,903						—						—						(1,497)						19,406
Land - acquisition & development			7,221						—						8						(526)						6,703
Total commercial loans			152,468						(4,628)						215						3,226						151,281
Consumer loans
Single-family residential			42,117						(338)						7						(823)						40,963
Construction - custom			1,219						—						—						(143)						1,076
Land - consumer lot loans			2,527						—						—						(112)						2,415
HELOC			3,158						—						—						99						3,257
Consumer			3,033						(477)						158						1,003						3,717
Total consumer loans			52,054						(815)						165						24						51,428
Total ACL - loans			$	204,522					$	(5,443)					$	380					$	3,250					$	202,709

1Provision & transfer amounts within the table do not include provision recapture from unfunded commitments of $500,000.

Three Months Ended March 31, 2024			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers1						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	13,791					$	—					$	—					$	8,188					$	21,979
Commercial real estate			29,007						—						—						3,984						32,991
Commercial & industrial			60,836						(65)						32						(1,542)						59,261
Construction			28,863						—						—						(1,546)						27,317
Land - acquisition & development			6,658						—						21						1,186						7,865
Total commercial loans			139,155						(65)						53						10,270						149,413
Consumer loans
Single-family residential			28,556						(131)						55						12,574						41,054
Construction - custom			2,262						—						—						(344)						1,918
Land - consumer lot loans			3,345						—						46						(177)						3,214
HELOC			2,973						—						1						—						2,974
Consumer			3,029						(149)						44						80						3,004
Total consumer loans			40,165						(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 the 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 the provision for unfunded commitments of $1,000,000.

Six Months Ended March 31, 2025			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers1						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	25,248					$	—					$	—					$	1,308					$	26,556
Commercial real estate			39,210						(4,555)						169						3,645						38,469
Commercial & industrial			58,748						(593)						42						1,950						60,147
Construction			22,267						—						—						(2,861)						19,406
Land - acquisition & development			7,900						—						19						(1,216)						6,703
Total commercial loans			153,373						(5,148)						230						2,826						151,281
Consumer loans																											—
Single-family residential			40,523						(338)						463						315						40,963
Construction - custom			1,427						—						—						(351)						1,076
Land - consumer lot loans			2,564						—						—						(149)						2,415
HELOC			3,049						—						2						206						3,257
Consumer			2,817						(742)						239						1,403						3,717
Total consumer loans			50,380						(1,080)						704						1,424						51,428
Total ACL - loans			$	203,753					$	(6,228)					$	934					$	4,250					$	202,709

1Provision & transfer amounts within the table do not include provision recapture from unfunded commitments of $1,500,000.

Six Months Ended March 31, 2024			Beginning Allowance						Charge-offs						Recoveries						Provision & Transfers1						Ending Allowance
			(In thousands)
Commercial loans
Multi-family			$	13,155					$	—					$	—					$	8,824					$	21,979
Commercial real estate			28,842						—						2						4,147						32,991
Commercial & industrial			58,773						(127)						64						551						59,261
Construction			29,408						—						—						(2,091)						27,317
Land - acquisition & development			7,016						(18)						71						796						7,865
Total commercial loans			137,194						(145)						137						12,227						149,413
Consumer loans
Single-family residential			28,029						(131)						175						12,981						41,054
Construction - custom			2,781						—						—						(863)						1,918
Land - consumer lot loans			3,512						—						55						(353)						3,214
HELOC			2,859						—						2						113						2,974
Consumer			2,832						(362)						236						298						3,004
Total consumer loans			40,013						(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 the 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 the recapture on unfunded commitments of $1,000,000.

The Company recorded a $2,750,000 provision for credit losses for the three months ended March 31, 2025, compared with a provision of $16,000,000 for the three months ended March 31, 2024, which represented the initial ACL for the loans obtained in the LBC Merger. The provision in the three months ended March 31, 2025 was primarily due to a stable loan receivable balance offset by net charge-offs taken during quarter. The increase in the overall ACL was offset by the equal decrease in the reserve for unfunded commitments. The Company's provision for credit losses for the six months ended March 31, 2025 and March 31, 2024 were the same as the three month figures as no provision was booked for the first quarter in the six month

periods. Net charge-offs totaled $5,063,000 for the three months ended March 31, 2025, compared to $146,000 of net charge-offs during the three months ended March 31, 2024. Net charge-offs totaled $5,294,000 for the six months ended March 31, 2025, compared to $33,000 during the six months ended March 31, 2024.

Non-performing assets were $70,884,000, or 0.26% of total assets, at March 31, 2025, compared to $77,418,000, or 0.28% of total assets, at September 30, 2024. Non-accrual loans were $59,886,000 at March 31, 2025, compared to $69,541,000 at September 30, 2024. Delinquencies, as a percent of total loans, were 0.27% at March 31, 2025, compared to 0.25% at September 30, 2024.

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, 2025			Internally Assigned Grade
			Pass						Special mention						Substandard						Doubtful						Loss						Total
			(In thousands, except ratio data)
Loan type
Commercial loans
Multi-family			$	4,677,592					$	110,502					$	76,803					$	2,443					$	—					$	4,867,340
Commercial real estate			3,507,589						6,478						122,531						2,879						—						3,639,477
Commercial & industrial			2,097,185						44,439						243,121						—						—						2,384,745
Construction			1,146,257						4,194						60,885						—						—						1,211,336
Land - acquisition & development			135,292						—						769						—						—						136,061
Total commercial loans			11,563,915						165,613						504,109						5,322						—						12,238,959
Consumer loans
Single-family residential			8,245,584						—						18,734						—						—						8,264,318
Construction - custom			136,653						—						848						—						—						137,501
Land - consumer lot loans			101,776						—						8						—						—						101,784
HELOC			287,928						—						300						—						—						288,228
Consumer			91,763						—						157						—						—						91,920
Total consumer loans			8,863,704						—						20,047						—						—						8,883,751
Total			$	20,427,619					$	165,613					$	524,156					$	5,322					$	—					$	21,122,710
Total grade as a % of total loans			96.71		%				0.78		%				2.48		%				0.03		%				—		%

September 30, 2024			Internally Assigned Grade
			Pass						Special mention						Substandard						Doubtful						Loss						Total Gross Loans
			(In thousands, except ratio data)
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 loans			$	20,615,520					$	77,159					$	427,428					$	—					$	—					$	21,120,107
Total grade as a % of total gross loans			97.61		%				0.37		%				2.02		%				—		%				—		%

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

March 31, 2025			Performing Loans												Non-Performing Loans
			Amount						% of Total Loans						Amount						% of Total Loans
			(In thousands, except ratio data)
Commercial loans
Multi-family			$	4,856,863					99.8		%				$	10,477					0.2		%
Commercial real estate			3,610,157						99.2						29,320						0.8
Commercial & industrial			2,384,745						100.0						—						—
Construction			1,211,336						100.0						—						0.0
Land - acquisition & development			136,061						100.0						—						—
Total commercial loans			12,199,162						99.7						39,797						0.3
Consumer loans
Single-family residential			8,245,584						99.8						18,734						0.2
Construction - custom			136,654						99.4						847						0.6
Land - consumer lot loans			101,776						100.0						8						0.0
HELOC			287,928						99.9						300						0.1
Consumer			91,720						99.8						200						0.2
Total consumer loans			8,863,662						99.8						20,089						0.2
Total loans			$	21,062,824					99.7		%				$	59,886					0.3		%

September 30, 2024			Performing Loans												Non-Performing Loans
			Amount						% of Total Loans						Amount						% of Total Loans
			(In thousands, except ratio data)
Commercial loans
Multi-family			$	4,537,457					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 loans			$	21,050,566					99.7		%				$	69,541					0.3		%

X

- Definition

The entire disclosure for allowance for credit losses.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Topic 310
-Publisher FASB
-URI https://asc.fasb.org/310/tableOfContent

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- References

No definition available.

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