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Loans Receivable And Allowance For Loan Losses | 9 Months Ended
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Jun. 30, 2024
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] |
Loans Receivable And Allowance For Loan Losses | LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES Loans receivable by portfolio segment consisted of the following at June 30, 2024 and September 30, 2023 (dollars in thousands):
| June 30, 2024 |  | September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Amount |  | Percent |  | Amount |  | Percent |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
One- to four-family (1) | $ | 288,611 |  |  | 19.2 | % |  | $ | 253,227 |  |  | 17.8 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Multi-family | 177,950 |  |  | 11.8 |  |  | 127,176 |  |  | 8.9 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | 597,865 |  |  | 39.7 |  |  | 568,265 |  |  | 39.8 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction - custom and owner/builder | 128,222 |  |  | 8.5 |  |  | 129,699 |  |  | 9.1 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction - speculative one- to four-family | 11,441 |  |  | 0.8 |  |  | 17,099 |  |  | 1.2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction - commercial | 32,130 |  |  | 2.1 |  |  | 51,064 |  |  | 3.6 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction - multi-family | 35,631 |  |  | 2.4 |  |  | 57,140 |  |  | 4.0 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction - land development | 19,104 |  |  | 1.3 |  |  | 18,841 |  |  | 1.3 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land | 32,384 |  |  | 2.1 |  |  | 26,726 |  |  | 1.9 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total mortgage loans | 1,323,338 |  |  | 87.9 |  |  | 1,249,237 |  |  | 87.6 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 43,679 |  |  | 2.9 |  |  | 38,281 |  |  | 2.7 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other | 3,121 |  |  | 0.2 |  |  | 2,772 |  |  | 0.2 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total consumer loans | 46,800 |  |  | 3.1 |  |  | 41,053 |  |  | 2.9 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial business | 136,213 |  |  | 9.0 |  |  | 135,802 |  |  | 9.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans | 314 |  |  | — |  |  | 466 |  |  | — |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total commercial loans | 136,527 |  |  | 9.0 |  |  | 136,268 |  |  | 9.5 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total loans receivable | 1,506,665 |  |  | 100.0 | % |  | 1,426,558 |  |  | 100.0 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Undisbursed portion of construction loans in process ("LIP") | 87,196 |  |  |  |  | 103,194 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred loan origination fees, net | 5,404 |  |  |  |  | 5,242 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ACL | 17,046 |  |  |  |  | 15,817 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Subtotal | 109,646 |  |  |  |  | 124,253 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable, net | $ | 1,397,019 |  |  |  |  | $ | 1,302,305 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
_____________________________ |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) Does not include one- to four-family loans held for sale totaling $1.80 million and $400,000 at June 30, 2024 and September 30, 2023, respectively. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans receivable at June 30, 2024 and September 30, 2023 are reported net of unamortized discounts totaling $163,000 and $192,000, respectively. Credit Quality Indicators The Company uses credit risk grades which reflect the Company’s assessment of a loan’s risk or loss potential. The Company categorizes loans into risk grade categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors such as the estimated fair value of the collateral. The Company uses the following definitions for credit risk ratings as part of the on-going monitoring of the credit quality of its loan portfolio: Pass: Pass loans are defined as those loans that meet acceptable quality underwriting standards. Watch: Watch loans are defined as those loans that still exhibit acceptable quality, but have some concerns that justify greater attention. If these concerns are not corrected, a potential for further adverse categorization exists. These concerns could relate to a specific condition peculiar to the borrower, its industry segment or the general economic environment. Special Mention: Special mention loans are defined as those loans deemed by management to have some potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the loan. 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. Doubtful: Loans in this classification have the weaknesses of substandard loans with the additional characteristic that the weaknesses make the collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss. At June 30, 2024 there was one loan classified as doubtful which is supported by an SBA guarantee of the remaining balance. At September 30, 2023, there were no loans classified as doubtful. 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 June 30, 2024 and September 30, 2023, there were no loans classified as loss. The following table sets forth the Company's loan portfolio at June 30, 2024 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):
|  | 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 |  | $ | 7,097 |  |  | $ | 54,350 |  |  | $ | 116,235 |  |  | $ | 49,399 |  |  | $ | 19,427 |  |  | $ | 40,249 |  |  | $ | — |  |  | $ | 286,757 |
Watch |  | — |  |  | 1,800 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,800 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 54 |  |  | — |  |  | 54 |
Total one- to four-family |  | $ | 7,097 |  |  | $ | 56,150 |  |  | $ | 116,235 |  |  | $ | 49,399 |  |  | $ | 19,427 |  |  | $ | 40,303 |  |  | $ | — |  |  | $ | 288,611 |
Multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 13,134 |  |  | $ | 19,474 |  |  | $ | 39,836 |  |  | $ | 33,292 |  |  | $ | 27,002 |  |  | $ | 44,042 |  |  | $ | 1,170 |  |  | $ | 177,950 |
Total multi-family |  | $ | 13,134 |  |  | $ | 19,474 |  |  | $ | 39,836 |  |  | $ | 33,292 |  |  | $ | 27,002 |  |  | $ | 44,042 |  |  | $ | 1,170 |  |  | $ | 177,950 |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 21,105 |  |  | $ | 64,307 |  |  | $ | 128,334 |  |  | $ | 91,470 |  |  | $ | 57,322 |  |  | $ | 197,318 |  |  | $ | 12,637 |  |  | $ | 572,493 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,226 |  |  | 10,747 |  |  | — |  |  | 14,973 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,401 |  |  | — |  |  | 4,401 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,998 |  |  | — |  |  | 5,998 |
Total commercial real estate |  | $ | 21,105 |  |  | $ | 64,307 |  |  | $ | 128,334 |  |  | $ | 91,470 |  |  | $ | 61,548 |  |  | $ | 218,464 |  |  | $ | 12,637 |  |  | $ | 597,865 |
|  | 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 |  | $ | 21,701 |  |  | $ | 42,271 |  |  | $ | 3,937 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 67,909 |
Watch |  | — |  |  | — |  |  | 2,870 |  |  | 2,726 |  |  | 432 |  |  | 436 |  |  | — |  |  | 6,464 |
Substandard |  | — |  |  | — |  |  | — |  |  | 152 |  |  | — |  |  | — |  |  | — |  |  | 152 |
Total construction |  | $ | 21,701 |  |  | $ | 42,271 |  |  | $ | 6,807 |  |  | $ | 2,878 |  |  | $ | 432 |  |  | $ | 436 |  |  | $ | — |  |  | $ | 74,525 |
Construction-speculative one-to four-family |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 3,468 |  |  | $ | 2,747 |  |  | $ | — |  |  | $ | 518 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,733 |
Total construction |  | $ | 3,468 |  |  | $ | 2,747 |  |  | $ | — |  |  | $ | 518 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6,733 |
Construction-commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 991 |  |  | $ | 16,914 |  |  | $ | 1,045 |  |  | $ | 1,293 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 20,243 |
Watch |  | — |  |  | 968 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 968 |
Total construction |  | $ | 991 |  |  | $ | 17,882 |  |  | $ | 1,045 |  |  | $ | 1,293 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 21,211 |
Construction-multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 2,033 |  |  | $ | 18,249 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 20,282 |
Total construction |  | $ | 2,033 |  |  | $ | 18,249 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 20,282 |
Construction-land development |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,903 |  |  | $ | 2,760 |  |  | $ | 11,918 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,581 |
Total construction |  | $ | 1,903 |  |  | $ | 2,760 |  |  | $ | 11,918 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 16,581 |
Land |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 10,272 |  |  | $ | 5,740 |  |  | $ | 8,573 |  |  | $ | 4,085 |  |  | $ | 768 |  |  | $ | 2,045 |  |  | $ | 415 |  |  | $ | 31,898 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 486 |  |  | — |  |  | 486 |
Total land |  | $ | 10,272 |  |  | $ | 5,740 |  |  | $ | 8,573 |  |  | $ | 4,085 |  |  | $ | 768 |  |  | $ | 2,531 |  |  | $ | 415 |  |  | $ | 32,384 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 3,434 |  |  | $ | 4,873 |  |  | $ | 2,017 |  |  | $ | 315 |  |  | $ | 674 |  |  | $ | 2,297 |  |  | $ | 29,338 |  |  | $ | 42,948 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | 33 |  |  | — |  |  | — |  |  | 33 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 83 |  |  | 615 |  |  | 698 |
Total home equity |  | $ | 3,434 |  |  | $ | 4,873 |  |  | $ | 2,017 |  |  | $ | 315 |  |  | $ | 707 |  |  | $ | 2,380 |  |  | $ | 29,953 |  |  | $ | 43,679 |
Other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 1,657 |  |  | $ | 459 |  |  | $ | 247 |  |  | $ | 60 |  |  | $ | 14 |  |  | $ | 543 |  |  | $ | 84 |  |  | $ | 3,064 |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57 |  |  | — |  |  | 57 |
Total other consumer |  | $ | 1,657 |  |  | $ | 459 |  |  | $ | 247 |  |  | $ | 60 |  |  | $ | 14 |  |  | $ | 600 |  |  | $ | 84 |  |  | $ | 3,121 |
Current period gross write-offs |  | $ | 5 |  |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | 8 |
|  | 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 |  | $ | 12,815 |  |  | $ | 20,696 |  |  | $ | 37,436 |  |  | $ | 9,431 |  |  | $ | 8,637 |  |  | $ | 5,159 |  |  | $ | 39,404 |  |  | $ | 133,578 |
Watch |  | — |  |  | — |  |  | 210 |  |  | 43 |  |  | 272 |  |  | 10 |  |  | 180 |  |  | 715 |
Substandard |  | — |  |  | 1,186 |  |  | — |  |  | — |  |  | — |  |  | 532 |  |  | — |  |  | 1,718 |
Doubtful |  | — |  |  | 202 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 202 |
Total commercial business |  | $ | 12,815 |  |  | $ | 22,084 |  |  | $ | 37,646 |  |  | $ | 9,474 |  |  | $ | 8,909 |  |  | $ | 5,701 |  |  | $ | 39,584 |  |  | $ | 136,213 |
Current period gross write-offs |  | $ | — |  |  | $ | 79 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 79 |
SBA PPP |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 267 |  |  | $ | 47 |  |  | $ | — |  |  | $ | — |  |  | $ | 314 |
Total SBA PPP |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 267 |  |  | $ | 47 |  |  | $ | — |  |  | $ | — |  |  | $ | 314 |
Total loans receivable, gross (net of construction LIP) |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 99,610 |  |  | $ | 252,840 |  |  | $ | 349,578 |  |  | $ | 190,130 |  |  | $ | 113,891 |  |  | $ | 291,653 |  |  | $ | 83,048 |  |  | $ | 1,380,750 |
Watch |  | — |  |  | 2,768 |  |  | 3,080 |  |  | 2,769 |  |  | 4,963 |  |  | 11,736 |  |  | 180 |  |  | 25,496 |
Special Mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 4,401 |  |  | — |  |  | 4,401 |
Substandard |  | — |  |  | 1,186 |  |  | — |  |  | 152 |  |  | — |  |  | 6,667 |  |  | 615 |  |  | 8,620 |
Doubtful |  | — |  |  | 202 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 202 |
Total loans receivable |  | $ | 99,610 |  |  | $ | 256,996 |  |  | $ | 352,658 |  |  | $ | 193,051 |  |  | $ | 118,854 |  |  | $ | 314,457 |  |  | $ | 83,843 |  |  | $ | 1,419,469 |
Current period gross charge-off |  | $ | 5 |  |  | $ | 80 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | 87 |
Allowance for Credit Losses 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 nine months ended June 30, 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. The following tables set forth information for the three and nine months ended June 30, 2024 and 2023 regarding activity in the ACL by portfolio segment (dollars in thousands):
| Three Months Ended June 30, 2024
| Beginning Allowance |  |  |  | Provision for (Recapture of) Credit Losses |  | Charge- offs |  | Recoveries |  | Ending Allowance
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |
One- to four-family | $ | 2,185 |  |  |  |  | $ | 49 |  |  | $ | — |  |  | $ | 43 |  |  | $ | 2,277 |
Multi-family | 1,358 |  |  |  |  | 84 |  |  | — |  |  | — |  |  | 1,442 |
Commercial | 6,954 |  |  |  |  | 241 |  |  | — |  |  | — |  |  | 7,195 |
Construction – custom and owner/builder | 1,215 |  |  |  |  | 76 |  |  | — |  |  | — |  |  | 1,291 |
Construction – speculative one- to four-family | 142 |  |  |  |  | (47) |  |  | — |  |  | — |  |  | 95 |
Construction – commercial | 451 |  |  |  |  | (58) |  |  | — |  |  | — |  |  | 393 |
Construction – multi-family | 478 |  |  |  |  | (121) |  |  | — |  |  | — |  |  | 357 |
Construction – land development | 255 |  |  |  |  | 35 |  |  | — |  |  | — |  |  | 290 |
Land | 840 |  |  |  |  | (12) |  |  | — |  |  | — |  |  | 828 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 305 |  |  |  |  | 9 |  |  | — |  |  | — |  |  | 314 |
Other | 45 |  |  |  |  | 2 |  |  | (2) |  |  | — |  |  | 45 |
Commercial business loans | 2,590 |  |  |  |  | 6 |  |  | (79) |  |  | 2 |  |  | 2,519 |
Total | $ | 16,818 |  |  |  |  | $ | 264 |  |  | $ | (81) |  |  | $ | 45 |  |  | $ | 17,046 |
| Nine Months Ended June 30, 2024
| Beginning Allowance |  | Impact of Adopting CECL (ASU 2016-13) |  | Provision for (Recapture of) Credit Losses |  | Charge- offs |  | Recoveries |  | Ending Allowance
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |
One-to four-family | $ | 2,417 |  |  | $ | (408) |  |  | $ | 225 |  |  | $ | — |  |  | $ | 43 |  |  | $ | 2,277 |
Multi-family | 1,156 |  |  | (120) |  |  | 406 |  |  | — |  |  | — |  |  | 1,442 |
Commercial | 7,209 |  |  | (494) |  |  | 480 |  |  | — |  |  | — |  |  | 7,195 |
Construction – custom and owner/builder | 750 |  |  | 542 |  |  | (1) |  |  | — |  |  | — |  |  | 1,291 |
Construction – speculative one- to four-family | 148 |  |  | (16) |  |  | (37) |  |  | — |  |  | — |  |  | 95 |
Construction – commercial | 316 |  |  | 176 |  |  | (99) |  |  | — |  |  | — |  |  | 393 |
Construction – multi-family | 602 |  |  | 204 |  |  | (449) |  |  | — |  |  | — |  |  | 357 |
Construction – land development | 274 |  |  | 25 |  |  | (9) |  |  | — |  |  | — |  |  | 290 |
Land | 406 |  |  | 318 |  |  | 104 |  |  | — |  |  | — |  |  | 828 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 519 |  |  | (243) |  |  | 38 |  |  | — |  |  | — |  |  | 314 |
Other | 53 |  |  | (7) |  |  | 7 |  |  | (8) |  |  | — |  |  | 45 |
Commercial business loans | 1,967 |  |  | 484 |  |  | 145 |  |  | (79) |  |  | 2 |  |  | 2,519 |
Total | $ | 15,817 |  |  | $ | 461 |  |  | $ | 810 |  |  | $ | (87) |  |  | $ | 45 |  |  | $ | 17,046 |
| Three Months Ended June 30, 2023
| Beginning Allowance |  | Provision for (Recapture of) Loan Losses |  | Charge- offs |  | Recoveries |  | Ending Allowance
Mortgage loans: |  |  |  |  |  |  |  |  |
One- to four-family | $ | 2,052 |  |  | $ | 126 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,178 |
Multi-family | 938 |  |  | 74 |  |  | — |  |  | — |  |  | 1,012
Commercial | 6,904 |  |  | 125 |  |  | — |  |  | — |  |  | 7,029
Construction – custom and owner/builder | 726 |  |  | 73 |  |  | — |  |  | — |  |  | 799
Construction – speculative one- to four-family | 121 |  |  | (11) |  |  | — |  |  | — |  |  | 110
Construction – commercial | 267 |  |  | 24 |  |  | — |  |  | — |  |  | 291
Construction – multi-family | 662 |  |  | 30 |  |  | — |  |  | — |  |  | 692 |
Construction – land development | 245 |  |  | (12) |  |  | — |  |  | — |  |  | 233 |
Land | 363 |  |  | 26 |  |  | — |  |  | — |  |  | 389
Consumer loans: |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 507 |  |  | 35 |  |  | — |  |  | — |  |  | 542
Other | 47 |  |  | 5 |  |  | (1) |  |  | — |  |  | 51
Commercial business loans | 1,866 |  |  | 115 |  |  | — |  |  | — |  |  | 1,981
Total | $ | 14,698 |  |  | $ | 610 |  |  | $ | (1) |  |  | $ | — |  |  | $ | 15,307 |
| Nine Months Ended June 30, 2023
| Beginning Allowance |  | Provision for (Recapture of) Loan Losses |  | Charge- offs |  | Recoveries |  | Ending Allowance
Mortgage loans: |  |  |  |  |  |  |  |  |
One-to four-family | $ | 1,658 |  |  | $ | 520 |  |  | $ | — |  |  | $ | — |  |  | $ | 2,178 |
Multi-family | 855 |  |  | 157 |  |  | — |  |  | — |  |  | 1,012
Commercial | 6,682 |  |  | 347 |  |  | — |  |  | — |  |  | 7,029
Construction – custom and owner/builder | 675 |  |  | 124 |  |  | — |  |  | — |  |  | 799
Construction – speculative one- to four-family | 130 |  |  | (20) |  |  | — |  |  | — |  |  | 110
Construction – commercial | 343 |  |  | (52) |  |  | — |  |  | — |  |  | 291
Construction – multi-family | 447 |  |  | 245 |  |  | — |  |  | — |  |  | 692 |
Construction – land development | 233 |  |  | — |  |  | — |  |  | — |  |  | 233 |
Land | 397 |  |  | (8) |  |  | — |  |  | — |  |  | 389
Consumer loans: |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 440 |  |  | 102 |  |  | — |  |  | — |  |  | 542
Other | 42 |  |  | 11 |  |  | (2) |  |  | — |  |  | 51
Commercial business loans | 1,801 |  |  | 184 |  |  | (5) |  |  | 1 |  |  | 1,981
Total | $ | 13,703 |  |  | $ | 1,610 |  |  | $ | (7) |  |  | $ | 1 |  |  | $ | 15,307 |
The following tables present information on the allowance for loan losses by portfolio segment at September 30, 2023 prior to the adoption of ASU 2016-13 (dollars in thousands):
| 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 |
Non-Accrual Loans 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. The following tables present an analysis of loans by aging category and portfolio segment at June 30, 2024 and September 30, 2023 (dollars in thousands):
| 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
June 30, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |
One- to four-family | $ | — |  |  | $ | — |  |  | $ | 135 |  |  | $ | — |  |  | $ | 135 |  |  | $ | 288,476 |  |  | $ | 288,611 |
Multi-family | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 177,950 |  |  | 177,950 |
Commercial | — |  |  | — |  |  | 1,310 |  |  | — |  |  | 1,310 |  |  | 596,555 |  |  | 597,865 |
Construction – custom and owner/builder | — |  |  | — |  |  | 152 |  |  | — |  |  | 152 |  |  | 74,373 |  |  | 74,525 |
Construction – speculative one- to four-family | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 6,733 |  |  | 6,733 |
Construction – commercial | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 21,211 |  |  | 21,211 |
Construction – multi-family | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 20,282 |  |  | 20,282 |
Construction – land development | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 16,581 |  |  | 16,581 |
Land | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 32,384 |  |  | 32,384 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | — |  |  | 2 |  |  | 615 |  |  | — |  |  | 617 |  |  | 43,062 |  |  | 43,679 |
Other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,121 |  |  | 3,121 |
Commercial business loans | 50 |  |  | 62 |  |  | 1,908 |  |  | — |  |  | 2,020 |  |  | 134,193 |  |  | 136,213 |
SBA PPP loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 314 |  |  | 314 |
Total | $ | 50 |  |  | $ | 64 |  |  | $ | 4,120 |  |  | $ | — |  |  | $ | 4,234 |  |  | $ | 1,415,235 |  |  | $ | 1,419,469 |
(1) Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.
| 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 |
(1) Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual. The following tables present an analysis of loans by credit quality indicator and portfolio segment at September 30, 2023 (dollars in thousands):
| 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 |
At June 30, 2024, the Company had $1.91 million of non-accrual loans with an ACL of $243,000 and $2.21 million of non-accrual loans with no ACL. The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of June 30, 2024 (in thousands):
| Recorded Investment |  | Related ACL
Mortgage loans: |  |  |
One- to four-family | $ | 135 |  |  | $ | — |
Commercial | 1,310 |  |  | — |
Construction - custom and owner/builder | 152 |  |  | — |
Consumer loans: |  |  |
Home equity and second mortgage | 615 |  |  | — |
Commercial business loans | 1,908 |  |  | 243 |
Total | $ | 4,120 |  |  | $ | 243 |
Impaired Loans 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. The following table is a summary of information related to impaired loans by portfolio segment prior to the adoption of CECL as of September 30, 2023 and for the year then ended (dollars in thousands):
| 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 |
______________________________________________ (1)For the year ended September 30, 2023. The following table is a summary of information related to impaired loans by portfolio segment prior to the adoption of CECL as of June 30, 2023 and for three and nine months then ended (dollars in thousands):
| 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 | $ | 373 |  |  | $ | 417 |  |  | $ | — |  |  | $ | 376 |  |  | $ | 381 |  |  | $ | 7 |  |  | $ | 21 |  |  | $ | 7 |  |  | $ | 21 |
Commercial | 2,988 |  |  | 2,988 |  |  | — |  |  | 2,894 |  |  | 2,939 |  |  | 40 |  |  | 121 |  |  | 31 |  |  | 94 |
Land | 150 |  |  | 150 |  |  | — |  |  | 305 |  |  | 371 |  |  | 2 |  |  | 4 |  |  | 1 |  |  | 3 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 390 |  |  | 390 |  |  | — |  |  | 488 |  |  | 444 |  |  | 3 |  |  | 9 |  |  | 2 |  |  | 7 |
Other | — |  |  | 48 |  |  | — |  |  | 1 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business loans | 44 |  |  | 44 |  |  | — |  |  | 46 |  |  | 51 |  |  | — |  |  | — |  |  | — |  |  | — |
Subtotal | 3,945 |  |  | 4,037 |  |  | — |  |  | 4,110 |  |  | 4,188 |  |  | 52 |  |  | 155 |  |  | 41 |  |  | 125 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial business loans | 245 |  |  | 245 |  |  | 123 |  |  | 247 |  |  | 247 |  |  | — |  |  | — |  |  | — |  |  | — |
Subtotal | 245 |  |  | 245 |  |  | 123 |  |  | 247 |  |  | 247 |  |  | — |  |  | — |  |  | — |  |  | — |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
One- to four-family | 373 |  |  | 417 |  |  | — |  |  | 376 |  |  | 381 |  |  | 7 |  |  | 21 |  |  | 7 |  |  | 21 |
Commercial | 2,988 |  |  | 2,988 |  |  | — |  |  | 2,894 |  |  | 2,939 |  |  | 40 |  |  | 121 |  |  | 31 |  |  | 94 |
Land | 150 |  |  | 150 |  |  | — |  |  | 305 |  |  | 371 |  |  | 2 |  |  | 4 |  |  | 1 |  |  | 3 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity and second mortgage | 390 |  |  | 390 |  |  | — |  |  | 488 |  |  | 444 |  |  | 3 |  |  | 9 |  |  | 2 |  |  | 7 |
Other | — |  |  | 48 |  |  | — |  |  | 1 |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business loans | 289 |  |  | 289 |  |  | 123 |  |  | 293 |  |  | 298 |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 4,190 |  |  | $ | 4,282 |  |  | $ | 123 |  |  | $ | 4,357 |  |  | $ | 4,435 |  |  | $ | 52 |  |  | $ | 155 |  |  | $ | 41 |  |  | $ | 125 |
_____________________________________________ (1) For the three months ended June 30, 2023. (2) For the nine months ended June 30, 2023. Troubled debt restructurings ("TDRs") 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 nine months ended June 30, 2024 and 2023. At June 30, 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 nine months ended June 30, 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 other potential sources 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.

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