
	March 31, 2024				September 30, 2023
	Amount		Percent		Amount		Percent
Mortgage loans:
One- to four-family (1)	$	276,433	19.0	%	$	253,227	17.8	%
Multi-family	167,275		11.5		127,176		8.9
Commercial	577,373		39.6		568,265		39.8
Construction - custom and owner/builder	122,988		8.4		129,699		9.1
Construction - speculative one- to four-family	16,407		1.1		17,099		1.2
Construction - commercial	32,318		2.2		51,064		3.6
Construction - multi-family	36,795		2.5		57,140		4.0
Construction - land development	16,051		1.1		18,841		1.3
Land	31,821		2.2		26,726		1.9
Total mortgage loans	1,277,461		87.6		1,249,237		87.6

Consumer loans:
Home equity and second mortgage	42,357		2.9		38,281		2.7
Other	2,925		0.2		2,772		0.2
Total consumer loans	45,282		3.1		41,053		2.9

Commercial loans:
Commercial business	135,505		9.3		135,802		9.5
U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans	367		—		466		—
Total commercial loans	135,872		9.3		136,268		9.5

Total loans receivable	1,458,615		100.0	%	1,426,558		100.0	%
Less:
Undisbursed portion of construction loans in process ("LIP")	77,502				103,194
Deferred loan origination fees, net	5,179				5,242
ACL	16,818				15,817
Subtotal	99,499				124,253
Loans receivable, net	$	1,359,116			$	1,302,305
_____________________________
(1) Does not include one- to four-family loans held for sale totaling $1.31 million and $400,000 at March 31, 2024 and September 30, 2023, respectively.

Substandard: Substandard loans are defined as those loans that are inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. If the weakness or weaknesses are not corrected, there is the distinct possibility that some loss will be sustained.

Loss: Loans in this classification are considered uncollectible and of such little value that continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this loan even though partial recovery may be realized in the future. At March 31, 2024 and September 30, 2023, there were no loans classified as loss.


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
One-to four-family
Risk Rating
Pass	$	4,294	$	41,193	$	116,309	$	50,922	$	19,551	$	41,984	$	—	$	274,253
Watch	—		1,800		—		—		—		—		—		1,800

Substandard	—		—		—		—		—		380		—		380
Total one- to four-family	$	4,294	$	42,993	$	116,309	$	50,922	$	19,551	$	42,364	$	—	$	276,433


Multi-family
Risk Rating
Pass	$	12,637	$	9,507	$	39,951	$	32,066	$	27,241	$	44,825	$	1,048	$	167,275



Total multi-family	$	12,637	$	9,507	$	39,951	$	32,066	$	27,241	$	44,825	$	1,048	$	167,275


Commercial real estate
Risk Rating
Pass	$	9,027	$	57,970	$	124,208	$	92,246	$	58,905	$	202,913	$	8,097	$	553,366
Watch	—		—		—		—		3,094		10,648		—		13,742
Special Mention	—		—		—		—		—		4,401		—		4,401
Substandard	—		—		—		—		—		5,864		—		5,864
Total commercial real estate	$	9,027	$	57,970	$	124,208	$	92,246	$	61,999	$	223,826	$	8,097	$	577,373


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
Construction-custom & owner/builder
Risk Rating
Pass	$	10,634	$	46,881	$	7,505	$	1,110	$	—	$	—	$	—	$	66,130
Watch	—		—		1,100		2,621		462		436		—		4,619

Substandard	—		—		—		152		—		—		—		152
Total construction	$	10,634	$	46,881	$	8,605	$	3,883	$	462	$	436	$	—	$	70,901


Construction-speculative one-to four-family
Risk Rating
Pass	$	2,278	$	7,319	$	—	$	518	$	—	$	—	$	—	$	10,115



Total construction	$	2,278	$	7,319	$	—	$	518	$	—	$	—	$	—	$	10,115


Construction-commercial
Risk Rating
Pass	$	—	$	16,445	$	5,614	$	1,293	$	—	$	—	$	—	$	23,352
Watch	—		968		—		—		—		—		—		968


Total construction	$	—	$	17,413	$	5,614	$	1,293	$	—	$	—	$	—	$	24,320


Construction-multi-family
Risk Rating
Pass	$	1,102	$	24,660	$	—	$	1,363	$	—	$	—	$	—	$	27,125



Total construction	$	1,102	$	24,660	$	—	$	1,363	$	—	$	—	$	—	$	27,125


Construction-land development
Risk Rating
Pass	$	—	$	2,691	$	11,905	$	—	$	—	$	—	$	—	$	14,596



Total construction	$	—	$	2,691	$	11,905	$	—	$	—	$	—	$	—	$	14,596


Land
Risk Rating
Pass	$	8,702	$	6,501	$	7,206	$	4,501	$	769	$	2,185	$	1,467	$	31,331
Watch	—		—		—		—		—		490		—		490


Total land	$	8,702	$	6,501	$	7,206	$	4,501	$	769	$	2,675	$	1,467	$	31,821


Home equity
Risk Rating
Pass	$	2,676	$	5,190	$	2,053	$	319	$	684	$	2,447	$	28,705	$	42,074
Watch	—		—		—		—		33		—		—		33

Substandard	—		—		—		—		—		250		—		250
Total home equity	$	2,676	$	5,190	$	2,053	$	319	$	717	$	2,697	$	28,705	$	42,357


Other consumer
Risk Rating
Pass	$	1,212	$	502	$	252	$	114	$	—	$	716	$	70	$	2,866
Watch	—		—		—		—		—		59		—		59


Total other consumer	$	1,212	$	502	$	252	$	114	$	—	$	775	$	70	$	2,925
Current period gross write-offs	$	3	$	1	$	—	$	—	$	—	$	—	$	2	$	6


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
Commercial business
Risk Rating
Pass	$	9,386	$	21,420	$	39,797	$	10,838	$	9,164	$	5,473	$	37,187	$	133,265
Watch	—		—		162		50		—		—		256		468

Substandard	—		1,475		—		—		—		297		—		1,772
Total commercial business	$	9,386	$	22,895	$	39,959	$	10,888	$	9,164	$	5,770	$	37,443	$	135,505


SBA PPP
Risk Rating
Pass	$	—	$	—	$	—	$	309	$	58	$	—	$	—	$	367



Total SBA PPP	$	—	$	—	$	—	$	309	$	58	$	—	$	—	$	367


Total loans receivable, gross (net of construction LIP)
Risk Rating
Pass	$	61,948	$	240,279	$	354,800	$	195,599	$	116,372	$	300,543	$	76,574	$	1,346,115
Watch	—		2,768		1,262		2,671		3,589		11,633		256		22,179
Special Mention	—		—		—		—		—		4,401		—		4,401
Substandard	—		1,475		—		152		—		6,791		—		8,418
Total loans receivable	$	61,948	$	244,522	$	356,062	$	198,422	$	119,961	$	323,368	$	76,830	$	1,381,113
Current period gross charge-off	$	3	$	1	$	—	$	—	$	—	$	—	$	2	$	6

The Company adopted the new accounting standard for the ACL, commonly referred to as the current expected credit losses ("CECL") methodology, as of October 1, 2023. All disclosures as of and for the three and six months ended March 31, 2024 are presented in accordance with the new accounting standard. The comparative financial periods prior to the adoption of this new accounting standard are presented and disclosed under previously applicable GAAP's incurred loss methodology, which is not directly comparable to the new, CECL methodology. See also Note 10, Recent Accounting Pronouncements. As a result of implementing this new accounting standard, there was a one-time adjustment to the fiscal year 2024 opening allowance balance of $461,000 related to loans held for investment. The Company elected not to measure an ACL for accrued interest receivable and instead elected to reverse interest income on loans or securities that are placed on nonaccrual status, which is generally when the instrument is 90 days past due, or earlier if the Company believes the collection of interest is doubtful. The Company has concluded that this policy results in the timely reversal of uncollectible interest.

The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost. The ACL is evaluated and calculated on a collective basis for those loans which share similar risk characteristics. For loans that do not share similar risk characteristics and cannot be evaluated on a collective basis, the Company will evaluate the loan individually. The Company estimates the expected credit losses over the loans' contractual terms, adjusted for expected prepayments. The ACL is calculated for loan segments utilizing loan level information and relevant information from internal and external sources related to past events and current conditions. Management has adopted the discounted cash flow ("DCF") methodology for all segments. The Company incorporates a reasonable and supportable forecast that utilizes current period national gross domestic product ("GDP") and national unemployment figures. Each of the loan segments are impacted by these factors. Prepayments are established for each segment based on historical averages for the segments, which management believes is an accurate presentation of future prepayment activity. Loans that are evaluated individually are not included in the collective analysis. The ACL on loans that are individually evaluated may be estimated based on their expected cash flows, or in the case of loans for which repayment is expected substantially through the operation or sale of collateral when the borrower is experiencing financial difficulty, may be measured based on the fair value of the collateral less estimated selling costs.

When available information confirms that specific loans or portions thereof are uncollectible, identified amounts are charged against the ACL. The existence of some or all of the following criteria will generally confirm that a loss has been incurred: the loan is significantly delinquent and the borrower has not demonstrated the ability or intent to bring the loan current; the Company has no recourse to the borrower, or if it does, the borrower has insufficient assets to pay the debt; and/or the estimated fair value of the loan collateral is significantly below the current loan balance, and there is little or no near-term prospect for improvement.

Management's evaluation of the ACL is based on ongoing, quarterly assessments of the known and inherent risks in the loan portfolio. Loss factors are based on the Company's historical loss experience with additional consideration and adjustments made for changes in economic conditions, changes in the amount and composition of the loan portfolio, delinquency rates, changes in collateral values, seasoning of the loan portfolio, duration of the current business cycle, a detailed analysis of individually evaluated loans and other factors as deemed appropriate. Management also assesses the risk related to reasonable and supportable forecasts that are used. These factors are evaluated on a quarterly basis. Loss rates used by the Company are affected as changes in these factors increase or decrease from quarter to quarter. In addition, regulatory agencies, as integral part of their examination process, periodically review the Company's ACL and may require the Company to make additions to the ACL based on their judgment about information available to them at the time of their examinations.


	Three Months Ended March 31, 2024
	Beginning Allowance		Provision for (Recapture of) Credit Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	2,096	$	89	$	—	$	—	$	2,185
Multi-family	1,200		158		—		—		1,358
Commercial	6,822		132		—		—		6,954
Construction – custom and owner/builder	1,234		(19)		—		—		1,215
Construction – speculative one- to four-family	132		10		—		—		142
Construction – commercial	430		21		—		—		451
Construction – multi-family	735		(257)		—		—		478
Construction – land development	298		(43)		—		—		255
Land	757		83		—		—		840
Consumer loans:
Home equity and second mortgage	286		19		—		—		305
Other	46		3		(4)		—		45
Commercial business loans	2,619		(30)		—		1		2,590

Total	$	16,655	$	166	$	(4)	$	1	$	16,818


	Six Months Ended March 31, 2024
	Beginning Allowance		Impact of Adopting CECL (ASU 2016-13)		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	2,417	$	(408)	$	176	$	—	$	—	$	2,185
Multi-family	1,156		(120)		322		—		—		1,358
Commercial	7,209		(494)		239		—		—		6,954
Construction – custom and owner/builder	750		542		(77)		—		—		1,215
Construction – speculative one- to four-family	148		(16)		10		—		—		142
Construction – commercial	316		176		(41)		—		—		451
Construction – multi-family	602		204		(328)		—		—		478
Construction – land development	274		25		(44)		—		—		255
Land	406		318		116		—		—		840
Consumer loans:
Home equity and second mortgage	519		(243)		29		—		—		305
Other	53		(7)		5		(6)		—		45
Commercial business loans	1,967		484		138		—		1		2,590

Total	$	15,817	$	461	$	545	$	(6)	$	1	$	16,818


	Three Months Ended March 31, 2023
	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	1,888	$	164	$	—	$	—	$	2,052
Multi-family	871		67		—		—		938
Commercial	6,794		110		—		—		6,904
Construction – custom and owner/builder	673		53		—		—		726
Construction – speculative one- to four-family	125		(4)		—		—		121
Construction – commercial	323		(56)		—		—		267
Construction – multi-family	577		85		—		—		662
Construction – land development	222		23		—		—		245
Land	383		(20)		—		—		363
Consumer loans:
Home equity and second mortgage	493		14		—		—		507
Other	47		1		(1)		—		47
Commercial business loans	1,833		38		(5)		—		1,866

Total	$	14,229	$	475	$	(6)	$	—	$	14,698


	Six Months Ended March 31, 2023
	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	1,658	$	394	$	—	$	—	$	2,052
Multi-family	855		83		—		—		938
Commercial	6,682		222		—		—		6,904
Construction – custom and owner/builder	675		51		—		—		726
Construction – speculative one- to four-family	130		(9)		—		—		121
Construction – commercial	343		(76)		—		—		267
Construction – multi-family	447		215		—		—		662
Construction – land development	233		12		—		—		245
Land	397		(34)		—		—		363
Consumer loans:
Home equity and second mortgage	440		67		—		—		507
Other	42		6		(1)		—		47
Commercial business loans	1,801		69		(5)		1		1,866

Total	$	13,703	$	1,000	$	(6)	$	1	$	14,698


	Allowance for Loan Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
September 30, 2023
Mortgage loans:
One- to four-family	$	—	$	2,417	$	2,417	$	368	$	252,859	$	253,227
Multi-family	—		1,156		1,156		—		127,176		127,176
Commercial	—		7,209		7,209		2,973		565,292		568,265
Construction – custom and owner/builder	—		750		750		—		73,239		73,239
Construction – speculative one- to four-family	—		148		148		—		9,361		9,361
Construction – commercial	—		316		316		—		26,030		26,030
Construction – multi-family	—		602		602		—		45,890		45,890
Construction – land development	—		274		274		—		16,129		16,129
Land	—		406		406		—		26,726		26,726
Consumer loans:
Home equity and second mortgage	—		519		519		382		37,899		38,281
Other	—		53		53		—		2,772		2,772
Commercial business loans	123		1,844		1,967		286		135,516		135,802
SBA PPP loans	—		—		—		—		466		466
Total	$	123	$	15,694	$	15,817	$	4,009	$	1,319,355	$	1,323,364

When a loan is 90 days delinquent the accrual of interest is generally discontinued and the loan is placed on non-accrual. All interest accrued but not collected for loans placed on non-accrual is reversed out of interest income. Generally, payments received on non-accrual loans are applied to reduce the outstanding principal balance of the loan. At times interest may be accounted for on a cash basis, depending on the collateral value and the borrower's payment history. A loan is generally not removed from non-accrual until all delinquent principal, interest and late fees have been brought current and the borrower demonstrates repayment ability over a period of not less than six months and all taxes are current.


	30–59 Days Past Due		60-89 Days Past Due		Non- Accrual (1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
March 31, 2024
Mortgage loans:
One- to four-family	$	—	$	—	$	380	$	—	$	380	$	276,053	$	276,433
Multi-family	—		—		—		—		—		167,275		167,275
Commercial	—		—		1,149		—		1,149		576,224		577,373
Construction – custom and owner/builder	—		—		152		—		152		70,749		70,901
Construction – speculative one- to four-family	—		—		—		—		—		10,115		10,115
Construction – commercial	—		—		—		—		—		24,320		24,320
Construction – multi-family	—		—		—		—		—		27,125		27,125
Construction – land development	—		—		—		—		—		14,596		14,596
Land	—		—		—		—		—		31,821		31,821
Consumer loans:
Home equity and second mortgage	340		—		165		—		505		41,852		42,357
Other	—		—		—		—		—		2,925		2,925
Commercial business loans	256		—		1,759		—		2,015		133,490		135,505
SBA PPP loans	—		—		—		—		—		367		367
Total	$	596	$	—	$	3,605	$	—	$	4,201	$	1,376,912	$	1,381,113


	30–59 Days Past Due		60-89 Days Past Due		Non- Accrual (1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
September 30, 2023
Mortgage loans:
One- to four-family	$	—	$	—	$	368	$	—	$	368	$	252,859	$	253,227
Multi-family	—		—		—		—		—		127,176		127,176
Commercial	—		—		683		—		683		567,582		568,265
Construction – custom and owner/builder	151		—		—		—		151		73,088		73,239
Construction – speculative one- to four-family	—		—		—		—		—		9,361		9,361
Construction – commercial	—		—		—		—		—		26,030		26,030
Construction – multi-family	—		—		—		—		—		45,890		45,890
Construction – land development	—		—		—		—		—		16,129		16,129
Land	—		—		—		—		—		26,726		26,726
Consumer loans:
Home equity and second mortgage	—		—		177		—		177		38,104		38,281
Other	—		—		—		—		—		2,772		2,772
Commercial business loans	—		—		286		—		286		135,516		135,802
SBA PPP loans	—		—		—		—		—		466		466
Total	$	151	$	—	$	1,514	$	—	$	1,665	$	1,321,699	$	1,323,364


	Loan Grades
September 30, 2023	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	252,859	$	—	$	—	$	368	$	253,227
Multi-family	127,176		—		—		—		127,176
Commercial	551,669		11,143		—		5,453		568,265
Construction – custom and owner/builder	68,181		5,058		—		—		73,239
Construction – speculative one- to four-family	9,361		—		—		—		9,361
Construction – commercial	25,063		967		—		—		26,030
Construction – multi-family	45,890		—		—		—		45,890
Construction – land development	16,129		—		—		—		16,129
Land	26,226		500		—		—		26,726
Consumer loans:
Home equity and second mortgage	37,982		34		—		265		38,281
Other	2,716		56		—		—		2,772
Commercial business loans	135,502		—		—		300		135,802
SBA PPP loans	466		—		—		—		466
Total	$	1,299,220	$	17,758	$	—	$	6,386	$	1,323,364

Prior to the adoption of CECL, a loan was considered impaired when it was probable that the Company would be unable to collect all amounts (principal and interest) when due according to the original contractual terms of the loan agreement. Smaller balance homogeneous loans, such as residential mortgage loans and consumer loans, may be collectively evaluated for impairment. When a loan was identified as being impaired, the amount of the impairment was measured by using discounted cash flows, except when, as an alternative, the current estimated fair value of the collateral (reduced by estimated costs to sell, if applicable) or observable market price was used. The valuation of real estate collateral is subjective in nature and may be adjusted in future periods because of changes in economic conditions. Management considers third-party appraisals, as well as independent fair market value assessments from realtors or persons involved in selling real estate, in determining the estimated fair value of particular properties. In addition, as certain of these third-party appraisals and independent fair market value assessments are only updated periodically, changes in the values of specific properties may have occurred subsequent to the most recent appraisals. Accordingly, the amounts of any such potential changes and any related adjustments are generally recorded at the time that such information is received. When the estimated net realizable value of the impaired loan is less than the recorded investment in the loan (including accrued interest and net deferred loan origination fees or costs), impairment is recognized by creating or adjusting an allocation of the allowance for credit losses, and uncollected accrued interest is reversed against interest income. If ultimate collection of principal is in doubt, all cash receipts on impaired loans are applied to reduce the principal balance. The categories of non-accrual loans and impaired loans overlap, although they are not identical.


	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Year to Date ("YTD") Average Recorded Investment (1)		YTD Interest Income Recognized (1)		YTD Cash Basis Interest Income Recognized (1)
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	368	$	412	$	—	$	378	$	29	$	29

Commercial	2,973		2,973		—		2,987		167		129




Land	—		—		—		297		5		4
Consumer loans:
Home equity and second mortgage	382		382		—		390		12		10
Other	—		—		—		1		—		—
Commercial business loans	41		90		—		49		—		—
Subtotal	3,764		3,857		—		4,102		213		172

With an allowance recorded:
Mortgage loans:











Commercial business loans	245		245		123		247		—		—
Subtotal	245		245		123		247		—		—

Total:
Mortgage loans:
One- to four-family	368		412		—		378		29		29

Commercial	2,973		2,973		—		2,987		167		129




Land	—		—		—		297		5		4
Consumer loans:
Home equity and second mortgage	382		382		—		390		12		10
Other	—		—		—		1		—		—
Commercial business loans	286		335		123		296		—		—
Total	$	4,009	$	4,102	$	123	$	4,349	$	213	$	172


	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Quarter to Date ("QTD") Average Recorded Investment (1)		Year to Date ("YTD") Average Recorded Investment (2)		QTD Interest Income Recognized (1)		YTD Interest Income Recognized (2)		QTD Cash Basis Interest Income Recognized (1)		YTD Cash Basis Interest Income Recognized (2)
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	378	$	421	$	—	$	381	$	386	$	7	$	14	$	7	$	14

Commercial	3,006		3,006		—		2,890		2,984		40		81		30		63




Land	459		459		—		442		438		2		2		2		2
Consumer loans:
Home equity and second mortgage	381		381		—		496		400		3		6		3		5
Other	1		1		—		2		3		—		—		—		—
Commercial business loans	48		97		—		52		57		—		—		—		—
Subtotal	4,273		4,365		—		4,263		4,268		52		103		42		84

With an allowance recorded:












Commercial business loans	245		245		123		247		249		—		—		—		—
Subtotal	245		245		123		247		249		—		—		—		—

Total:
Mortgage loans:
One- to four-family	$	378	$	421	$	—	$	381	$	386	$	7	$	14	$	7	$	14

Commercial	3,006		3,006		—		2,890		2,984		40		81		30		63




Land	459		459		—		442		438		2		2		2		2
Consumer loans:
Home equity and second mortgage	381		381		—		496		400		3		6		3		5
Other	1		1		—		2		3		—		—		—		—
Commercial business loans	293		342		123		299		306		—		—		—		—
Total	$	4,518	$	4,610	$	123	$	4,510	$	4,517	$	52	$	103	$	42	$	84

_____________________________________________

On October 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments - Credit Losses (ASU 2016-13). This ASU eliminated the accounting guidance for TDR loans for creditors, while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower experiences financial difficulty. No loans to borrowers experiencing financial difficulty were modified in the three and six months ended March 31, 2024 and 2023. At March 31, 2023, the Company had $2.60 million of TDRs, all of which were paying as agreed. There were no defaults in these loans during the six months ended March 31, 2024 and 2023.

In accordance with the Company's policy guidelines, unsecured loans are generally charged-off when no payments have been received for three consecutive months unless an alternative action plan is in effect. The outstanding balance of a secured loan that is in excess of the net realizable value is generally charged-off if no payments are received for four or five consecutive months. However, charge-off's are postponed if alternative proposals to restructure, obtain additional guarantors, obtain additional assets as collateral or a potential sale of the underlying collateral would result in full repayment of the outstanding loan balance. Once any other potential source of repayment are exhausted, the impaired portion of the loan is charged-off. Regardless of whether a loan is unsecured or collateralized, once an amount is determined to be a confirmed loan loss it is promptly charged off.