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Loans Receivable and Allowance for Loan Losses

12 Months Ended

Sep. 30, 2021

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Loans Receivable and Allowance for Loan Losses

Loans receivable by portfolio segment consisted of the following at September 30, 2021 and 2020 (dollars in thousands):


	2021		2020
Mortgage loans:
One- to four-family	$	119,935	$	118,580
Multi-family	87,563		85,053
Commercial	470,650		453,574
Construction – custom and owner/builder	109,152		129,572
Construction – speculative one- to four-family	17,813		14,592
Construction – commercial	43,365		33,144
Construction – multi-family	52,071		34,476
Construction – land development	10,804		7,712
Land	19,936		25,571
Total mortgage loans	931,289		902,274
Consumer loans:
Home equity and second mortgage	32,988		32,077
Other	2,512		3,572
Total consumer loans	35,500		35,649

Commercial loans:
Commercial business	74,579		69,540
SBA Paycheck Protection Program ("PPP")	40,922		126,820
Total commercial business and SBA PPP loans	115,501		196,360
Total loans receivable	1,082,290		1,134,283
Less:
Undisbursed portion of construction loans in process	95,224		100,558
Deferred loan origination fees, net	5,143		6,436
Allowance for loan losses	13,469		13,414
	113,836		120,408
Loans receivable, net	$	968,454	$	1,013,875

Loans receivable at September 30, 2021 and 2020 are reported net of unamortized discounts totaling $449,000 and $790,000, respectively.

Significant Concentrations of Credit Risk

Most of the Company’s lending activity is with customers located in the state of Washington and involves real estate. At September 30, 2021, the Company had $964,277,000 (including $95,224,000 of undisbursed construction loans in process) in loans secured by real estate, which represented 89.1% of total loans receivable. The real estate loan portfolio is primarily secured by one- to four-family properties, multi-family properties, land, and a variety of commercial real estate property types. At September 30, 2021, there were no concentrations of real estate loans to a specific industry or secured by a specific collateral type that equaled or exceeded 20% of the Company’s total loan portfolio, other than loans secured by one-to four-

family properties. The ultimate collectability of a substantial portion of the loan portfolio is susceptible to changes in economic and market conditions in the region and the impact of those changes on the real estate market. The Company typically originates real estate loans with loan-to-value ratios of no greater than 90%. Collateral and/or guarantees are required for all loans.

Related Party Loans

Certain related parties of the Company, principally Bank directors and officers, are loan customers of the Bank in the ordinary course of business. Such related party loans were performing according to their repayment terms at September 30, 2021 and 2020. Activity in related party loans during the years ended September 30, 2021, 2020 and 2019 was as follows (dollars in thousands):


	2021		2020		2019
Balance, beginning of year	$	248	$	94	$	119
New loans or borrowings	316		178		1
Repayments and reclassifications	(98)		(24)		(26)
Balance, end of year	$	466	$	248	$	94

Loan Segment Risk Characteristics

The Company believes that its loan classes are the same as its loan segments.

One- To Four-Family Residential Lending: The Company originates both fixed-rate and adjustable-rate loans secured by one- to four-family residences. A portion of the fixed-rate one- to four-family loans are sold in the secondary market for asset/liability management purposes and to generate non-interest income. The Company’s lending policies generally limit the maximum loan-to-value on one- to four-family loans to 90% of the lesser of the appraised value or the purchase price. However, the Company usually obtains private mortgage insurance on the portion of the principal amount that exceeds 80% of the appraised value of the property.

Multi-Family Lending: The Company originates loans secured by multi-family dwelling units (more than four units). Multi-family lending generally affords the Company an opportunity to receive interest at rates higher than those generally available from one- to four-family residential lending. However, loans secured by multi-family properties usually are greater in amount, more difficult to evaluate and monitor and, therefore, involve a greater degree of risk than one- to four-family residential mortgage loans. Because payments on loans secured by multi-family properties are often dependent on the successful operation and management of the properties, repayment of such loans may be affected by adverse conditions in the real estate market or economy. The Company attempts to minimize these risks by scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan.

Commercial Mortgage Lending: The Company originates commercial real estate loans secured by properties such as office buildings, retail/wholesale facilities, motels, restaurants, mini-storage facilities and other commercial properties. Commercial real estate lending generally affords the Company an opportunity to receive interest at higher rates than those available from one- to four-family residential lending. However, loans secured by such properties usually are greater in amount, more difficult to evaluate and monitor and, therefore, involve a greater degree of risk than one- to four-family residential mortgage loans. Because payments on loans secured by commercial properties are often dependent on the successful operation and management of the properties, repayment of these loans may be affected by adverse conditions in the real estate market or economy. The Company attempts to mitigate these risks by generally limiting the maximum loan-to-value ratio to 80% and scrutinizing the financial condition of the borrower, the quality of the collateral and the management of the property securing the loan.

Construction Lending: The Company currently originates the following types of construction loans: custom construction loans, owner/builder construction loans, speculative construction loans, commercial real estate construction loans, multi-family construction loans and land development loans.

Construction lending affords the Company the opportunity to achieve higher interest rates and fees with shorter terms to maturity than does its single-family permanent mortgage lending. Construction lending, however, is generally considered to involve a higher degree of risk than one- to four family residential lending because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost of the project. The nature of these loans is such that they are generally more difficult to evaluate and monitor. If the estimated cost of construction proves to be inaccurate, the Company may be required to advance funds beyond the amount originally committed to complete the project. If the estimate of value upon completion proves to be inaccurate, the Company may be confronted with a project whose value is insufficient to assure full repayment, and the Company may incur a loss. Projects may also be jeopardized by disagreements between borrowers and builders and by the failure of builders to pay subcontractors. Loans to construct homes for which no purchaser has been

identified carry more risk because the payoff for the loan depends on the builder’s ability to sell the property prior to the time that the construction loan is due. The Company attempts to mitigate these risks by adhering to its underwriting policies, disbursement procedures and monitoring practices.

Construction Lending – Custom and Owner/Builder: Custom construction and owner/builder construction loans are originated to home owners and are typically refinanced into permanent loans at the completion of construction.

Construction Lending – Speculative One- To Four-Family: Speculative one-to four-family construction loans are made to home builders and are termed “speculative” because the home builder does not have, at the time of the loan origination, a signed contract with a home buyer who has a commitment for permanent financing with the Company or another lender for the finished home. The home buyer may be identified either during or after the construction period.

Construction Lending – Commercial: Commercial construction loans are originated to construct properties such as office buildings, hotels, retail rental space and mini-storage facilities.

Construction Lending – Multi-Family: Multi-family construction loans are originated to construct apartment buildings and condominium projects.

Construction Lending – Land Development: Land development loans are originated to real estate developers for the purpose of developing residential subdivisions. The Company is currently originating land development loans on a limited basis.

Land Lending: The Company originates loans for the acquisition of land upon which the purchaser can then build or make improvements necessary to build or to sell as improved lots. Loans secured by undeveloped land or improved lots involve greater risks than one- to four-family residential mortgage loans because these loans are more difficult to evaluate. If the estimate of value proves to be inaccurate, in the event of default or foreclosure, the Company may be confronted with a property value which is insufficient to assure full repayment. The Company attempts to minimize this risk by generally limiting the maximum loan-to-value ratio on land loans to 75%.

Consumer Lending – Home Equity and Second Mortgage: The Company originates home equity lines of credit and second mortgage loans. Home equity lines of credit and second mortgage loans have a greater credit risk than one- to four-family residential mortgage loans because they are secured by mortgages subordinated to the existing first mortgage on the property, which may or may not be held by the Company. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the collateral and the credit-worthiness of the borrower.

Consumer Lending – Other: The Company originates other consumer loans, which include automobile loans, boat loans, motorcycle loans, recreational vehicle loans, savings account loans and unsecured loans. Other consumer loans generally have shorter terms to maturity than mortgage loans. Other consumer loans generally involve a greater degree of risk than do residential mortgage loans, particularly in the case of consumer loans that are unsecured or secured by rapidly depreciating assets such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance as a result of the greater likelihood of damage, loss or depreciation. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the credit-worthiness of the borrower.

Commercial Business Lending: The Company originates commercial business loans which, excluding SBA PPP loans, are generally secured by business equipment, accounts receivable, inventory or other property. The Company also generally obtains personal guarantees from the business owners based on a review of personal financial statements. Commercial business lending generally involves risks that are different from those associated with residential and commercial real estate lending. Real estate lending is generally considered to be collateral based lending with loan amounts based on predetermined loan to collateral values, and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default. Although commercial business loans are often collateralized by equipment, inventory, accounts receivable or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment, because accounts receivable may be uncollectible and inventories and equipment may be obsolete or of limited use. Accordingly, the repayment of a commercial business loan depends primarily on the credit-worthiness of the borrower (and any guarantors), while the liquidation of collateral is a secondary and potentially insufficient source of repayment. The Company attempts to mitigate these risks by adhering to its underwriting policies in evaluating the management of the business and the credit-worthiness of the borrowers and the guarantors.

SBA PPP: The CARES Act authorized the SBA to temporarily guarantee loans under the PPP. As a qualified SBA lender, the Company was automatically authorized to originate PPP loans upon commencement of the program in April 2020 through the program's initial conclusion in August 2020. The Consolidated Appropriations Act, 2021 ("CAA 2021"), which was signed into law on December 27, 2020, renewed and extended the PPP until May 31, 2021. As a result, the Company began originating PPP loans again in January 2021. The SBA guarantees 100% of PPP loans made to eligible borrowers, and the entire amount of the borrower's PPP loan, including any accrued interest, is eligible to be forgiven and repaid by the SBA. PPP loans have: (a) an interest rate of 1%, (b) a two-year loan term to maturity for loans approved by the SBA prior to June 5, 2020 (unless the borrower and the Company mutually agree to extend the term of the loan to five years) and a five-year maturity for loans approved thereafter; and (c) principal and interest payments deferred for at least six months from the date of disbursement.

Allowance for Loan Losses

The following table sets forth information for the year ended September 30, 2021 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):


	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	1,163	$	(9)	$	—	$	—	$	1,154
Multi-family	718		47		—		—		765
Commercial	7,144		(331)		—		—		6,813
Construction – custom and owner/builder	832		(188)		—		—		644
Construction – speculative one- to four-family	158		30		—		—		188
Construction – commercial	420		364		—		—		784
Construction – multi-family	238		198		—		—		436
Construction – land development	133		(9)		—		—		124
Land	572		(147)		—		45		470
Consumer loans:
Home equity and second mortgage	593		(65)		—		—		528
Other	71		(24)		(1)		4		50
Commercial business loans	1,372		134		(2)		9		1,513
Total	$	13,414	$	—	$	(3)	$	58	$	13,469

The following table sets forth information for the year ended September 30, 2020 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):


	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	1,167	$	(6)	$	—	$	2	$	1,163
Multi-family	481		237		—		—		718
Commercial	4,154		2,984		—		6		7,144
Construction – custom and owner/builder	755		72		—		5		832
Construction – speculative one- to four-family	212		(54)		—		—		158
Construction – commercial	338		82		—		—		420
Construction – multi-family	375		(137)		—		—		238
Construction – land development	67		66		—		—		133
Land	697		(145)		—		20		572
Consumer loans:
Home equity and second mortgage	623		(45)		—		15		593
Other	99		(19)		(12)		3		71
Commercial business loans	722		665		(15)		—		1,372
Total	$	9,690	$	3,700	$	(27)	$	51	$	13,414

The following table sets forth information for the year ended September 30, 2019 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):


	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	1,086	$	(23)	$	—	$	104	$	1,167
Multi-family	433		48		—		—		481
Commercial	4,248		(260)		—		166		4,154
Construction – custom and owner/builder	671		82		—		2		755
Construction – speculative one- to four-family	178		34		—		—		212
Construction – commercial	563		(225)		—		—		338
Construction – multi-family	135		240		—		—		375
Construction – land development	49		18		—		—		67
Land	844		(116)		(49)		18		697
Consumer loans:
Home equity and second mortgage	649		(21)		(5)		—		623
Other	117		(19)		(5)		6		99
Commercial business loans	557		242		(102)		25		722
Total	$	9,530	$	—	$	(161)	$	321	$	9,690

The following table presents information on loans evaluated individually and collectively for impairment in the allowance for loan losses by portfolio segment at September 30, 2021 (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
Mortgage loans:
One- to four-family	$	—	$	1,154	$	1,154	$	407	$	119,528	$	119,935
Multi-family	—		765		765		—		87,563		87,563
Commercial	—		6,813		6,813		3,143		467,507		470,650
Construction – custom and owner/ builder	—		644		644		—		61,003		61,003
Construction – speculative one- to four-family	—		188		188		—		9,657		9,657
Construction – commercial	—		784		784		—		38,931		38,931
Construction – multi-family	—		436		436		—		22,888		22,888
Construction – land development	—		124		124		—		5,502		5,502
Land	76		394		470		683		19,253		19,936
Consumer loans:
Home equity and second mortgage	—		528		528		516		32,472		32,988
Other	—		50		50		17		2,495		2,512
Commercial business loans	171		1,342		1,513		458		74,121		74,579
SBA PPP loans	—		—		—		—		40,922		40,922
Total	$	247	$	13,222	$	13,469	$	5,224	$	981,842	$	987,066


	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
Mortgage loans:
One- to four-family	$	3	$	1,160	$	1,163	$	1,143	$	117,437	$	118,580
Multi-family	—		718		718		—		85,053		85,053
Commercial	—		7,144		7,144		3,242		450,332		453,574
Construction – custom and owner/ builder	—		832		832		—		75,332		75,332
Construction – speculative one- to four-family	—		158		158		—		7,108		7,108
Construction – commercial	—		420		420		—		20,927		20,927
Construction – multi-family	—		238		238		—		10,832		10,832
Construction – land development	—		133		133		—		4,739		4,739
Land	—		572		572		394		25,177		25,571
Consumer loans:
Home equity and second mortgage	—		593		593		555		31,522		32,077
Other	—		71		71		9		3,563		3,572
Commercial business loans	38		1,334		1,372		430		69,110		69,540
SBA PPP loans	—		—		—		—		126,820		126,820
Total	$	41	$	13,373	$	13,414	$	5,773	$	1,027,952	$	1,033,725

The following table presents an analysis of loans by aging category and portfolio segment at September 30, 2021 (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
Mortgage loans:
One- to four-family	$	—	$	180	$	407	$	—	$	587	$	119,348	$	119,935
Multi-family	—		—		—		—		—		87,563		87,563
Commercial	—		—		773		—		773		469,877		470,650
Construction – custom and owner/ builder	—		—		—		—		—		61,003		61,003
Construction – speculative one- to four-family	—		—		—		—		—		9,657		9,657
Construction – commercial	—		—		—		—		—		38,931		38,931
Construction – multi-family	—		—		—		—		—		22,888		22,888
Construction – land development	—		—		—		—		—		5,502		5,502
Land	—		—		683		—		683		19,253		19,936
Consumer loans:
Home equity and second mortgage	—		—		516		—		516		32,472		32,988
Other	—		—		17		—		17		2,495		2,512
Commercial business loans	5		—		458		—		463		74,116		74,579
SBA PPP loans	—		—		—		—		—		40,922		40,922
Total	$	5	$	180	$	2,854	$	—	$	3,039	$	984,027	$	987,066

__________________

(1)Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

The following table presents an analysis of loans by aging category and portfolio segment at September 30, 2020 (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
Mortgage loans:
One- to four-family	$	—	$	68	$	659	$	—	$	727	$	117,853	$	118,580
Multi-family	—		—		—		—		—		85,053		85,053
Commercial	—		519		858		—		1,377		452,197		453,574
Construction – custom and owner/ builder	—		—		—		—		—		75,332		75,332
Construction – speculative one- to four-family	—		—		—		—		—		7,108		7,108
Construction – commercial	—		—		—		—		—		20,927		20,927
Construction – multi-family	—		—		—		—		—		10,832		10,832
Construction – land development	—		38		—		—		38		4,701		4,739
Land	—		144		394		—		538		25,033		25,571
Consumer loans:
Home equity and second mortgage	—		22		555		—		577		31,500		32,077
Other	3		—		9		—		12		3,560		3,572
Commercial business loans	49		—		430		—		479		69,061		69,540
SBA PPP loans	—		—		—		—		—		126,820		126,820
Total	$	52	$	791	$	2,905	$	—	$	3,748	$	1,029,977	$	1,033,725

___________________

(1)Includes non-accrual loans past due 90 days or more and other loans classified as non-accrual.

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 September 30, 2021 and 2020, there were no loans classified as doubtful.

Loss: Loans in this classification are considered uncollectible and of such little value that continuance as an asset 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 September 30, 2021 and 2020, there were no loans classified as loss.

The following table presents an analysis of loans by credit quality indicator and portfolio segment at September 30, 2021 (dollars in thousands):


	Loan Grades
	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	118,857	$	129	$	537	$	412	$	119,935
Multi-family	87,563		—		—		—		87,563
Commercial	456,188		10,285		2,921		1,256		470,650
Construction – custom and owner / builder	59,699		1,304		—		—		61,003
Construction – speculative one- to four-family	9,657		—		—		—		9,657
Construction – commercial	37,414		—		1,517		—		38,931
Construction – multi-family	22,888		—		—		—		22,888
Construction – land development	5,467		—		—		35		5,502
Land	18,648		558		—		730		19,936
Consumer loans:
Home equity and second mortgage	32,190		145		—		653		32,988
Other	2,465		30		—		17		2,512
Commercial business loans	73,992		49		37		501		74,579
SBA PPP loans	40,922		—		—		—		40,922
Total	$	965,950	$	12,500	$	5,012	$	3,604	$	987,066

The following table presents an analysis of loans by credit quality indicator and portfolio segment at September 30, 2020 (dollars in thousands):


	Loan Grades
	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	115,992	$	1,369	$	551	$	668	$	118,580
Multi-family	85,053		—		—		—		85,053
Commercial	441,037		7,712		3,447		1,378		453,574
Construction – custom and owner / builder	74,529		803		—		—		75,332
Construction – speculative one- to four-family	7,108		—		—		—		7,108
Construction – commercial	19,525		—		1,402		—		20,927
Construction – multi-family	10,832		—		—		—		10,832
Construction – land development	4,701		—		—		38		4,739
Land	23,290		1,518		370		393		25,571
Consumer loans:
Home equity and second mortgage	31,344		53		—		680		32,077
Other	3,531		32		—		9		3,572
Commercial business loans	68,904		59		94		483		69,540
SBA PPP loans	126,820		—		—		—		126,820
Total	$	1,012,666	$	11,546	$	5,864	$	3,649	$	1,033,725

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2021 (dollars in thousands):


	September 30, 2021						For the Year Ended September 30, 2021
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	407	$	450	$	—	$	655	$	58	$	52

Commercial	3,143		3,143		—		3,039		159		127




Land	321		321		—		292		2		2
Consumer loans:
Home equity and second mortgage	516		516		—		552		1		1
Other	17		17		—		12		—		—
Commercial business loans	164		168		—		200		—		—
Subtotal	4,568		4,615		—		4,750		220		182
With an allowance recorded:
Mortgage loans:
One- to four-family	—		—		—		97		—		—






Land	362		362		76		72		—		—



Commercial business loans	294		294		171		285		—		—
Subtotal	656		656		247		454		—		—
Total:
Mortgage loans:
One- to four-family	407		450		—		752		58		52

Commercial	3,143		3,143		—		3,039		159		127




Land	683		683		76		364		2		2
Consumer loans:
Home equity and second mortgage	516		516		—		552		1		1
Other	17		17		—		12		—		—
Commercial business loans	458		462		171		485		—		—
Total	$	5,224	$	5,271	$	247	$	5,204	$	220	$	182

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2020 (dollars in thousands):


	September 30, 2020						For the Year Ended September 30, 2020
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	659	$	703	$	—	$	1,127	$	44	$	34

Commercial	3,242		3,242		—		3,236		133		107




Land	394		438		—		125		—		—
Consumer loans:
Home equity and second mortgage	555		555		—		581		—		—
Other	9		9		—		6		—		—
Commercial business loans	182		182		—		176		—		—
Subtotal	5,041		5,129		—		5,251		177		141
With an allowance recorded:
Mortgage loans:
One- to four-family	484		484		3		194		16		8






Land	—		—		—		110		—		—
Consumer loans:

Other	—		—		—		7		—		—
Commercial business loans	248		248		38		370		—		—
Subtotal	732		732		41		681		16		8
Total:
Mortgage loans:
One- to four-family	1,143		1,187		3		1,321		60		42

Commercial	3,242		3,242		—		3,236		133		107




Land	394		438		—		235		—		—
Consumer loans:
Home equity and second mortgage	555		555		—		581		—		—
Other	9		9		—		13		—		—
Commercial business loans	430		430		38		546		—		—
Total	$	5,773	$	5,861	$	41	$	5,932	$	193	$	149

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2019 (dollars in thousands):


	September 30, 2019						For the Year Ended September 30, 2019
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	1,192	$	1,236	$	—	$	1,110	$	71	$	62

Commercial	3,190		3,190		—		2,920		227		192





Land	63		126		—		100		3		3
Consumer loans:
Home equity and second mortgage	603		603		—		459		—		—

Commercial business loans	189		291		—		142		30		30
Subtotal	5,237		5,446		—		4,731		331		287
With an allowance recorded:
Mortgage loans:







Land	141		141		27		246		—		—
Consumer loans:

Other	23		23		17		10		—		—
Commercial business loans	536		536		128		350		30		30
Subtotal	700		700		172		606		30		30
Total:
Mortgage loans:
One- to four-family	1,192		1,236		—		1,110		71		62

Commercial	3,190		3,190		—		2,920		227		192





Land	204		267		27		346		3		3
Consumer loans:
Home equity and second mortgage	603		603		—		459		—		—
Other	23		23		17		10		—		—
Commercial business loans	725		827		128		492		60		60
Total	$	5,937	$	6,146	$	172	$	5,337	$	361	$	317

CARES Act provided guidance around the modification of loans as a result of the COVID-19 pandemic, which outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined under the CARES Act prior to any relief, are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers are considered current under the CARES Act and related regulatory guidance if they are less than 30 days past due on their contractual payments at the time a modification program is implemented. In response to requests from borrowers, the Company made payment deferral modifications (typically 90-day payment deferrals with interest continuing to accrue or scheduled to be paid monthly) on a number of loans. The majority of these borrowers had resumed making payments as of September 30, 2021, and only one loan with a balance of $323,000 remained on deferral status under COVID-19 loan modification forbearance agreements as of that date. Loan modifications in accordance with the CARES Act and related regulatory guidance are still subject to an evaluation in regard to determining whether or not a loan is deemed to be impaired.

The following table details the COVID-19 loan modifications on deferral status as of September 30, 2021 (dollars in thousands):


COVID-19 Loan Modifications
Mortgage loans	Number	Balance		Percent
One- to four-family	1	$	323	100.0	%












Total COVID-19 modifications	1	$	323	100.0	%

The following table details the COVID-19 loan modifications on deferral status as of September 30, 2020 (dollars in thousands):


COVID-19 Loan Modifications
Mortgage loans	Number	Balance		Percent
One- to four-family	1	$	467	8.0	%

Commercial	2	3,951		67.2
Construction	1	1,402		23.9

Total mortgage loans	4	5,820		99.1

Consumer loans
Home equity and second mortgage	1	50		0.9

Total consumer loans	1	50		0.9


Total COVID-19 Modifications	5	$	5,870	100.0	%

The Company had $2,553,000 in TDRs included in impaired loans at September 30, 2021 and had no commitments to lend additional funds on these loans. The Company had $3,071,000 in TDRs included in impaired loans at September 30, 2020 and had no commitments to lend additional funds on these loans. None of the allowance for loan losses was allocated to TDRs at September 30, 2021. The allowance for loan losses allocated to TDRs at September 30, 2020 was $3,000.

The following tables set forth information with respect to the Company’s TDRs by interest accrual status as of September 30, 2021 and 2020 (dollars in thousands):


	2021
	Accruing		Non-Accrual		Total
Mortgage loans:


Commercial	$	2,371	$	—	$	2,371
Land	—		119		119
Consumer loans:
Home equity and second mortgage	—		63		63

Total	$	2,371	$	182	$	2,553


	2020
	Accruing		Non-Accrual		Total
Mortgage loans:
One- to four-family	$	483	$	—	$	483

Commercial	2,385		—		2,385


Land	—		130		130
Consumer loans:
Home equity and second mortgage	—		73		73

Total	$	2,868	$	203	$	3,071

There were no new TDRs recognized during the years ended September 30, 2021 and 2020. There was one new TDR during the year ended September 30, 2019. The following table sets forth information with respect to the Company's TDRs, by portfolio segment, added during the year ended September 30, 2019:


2019	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		End of Period Balance
Home equity and second mortgage loans (1)	1	$	85	$	85	$	82

Total	1	$	85	$	85	$	82

There were no TDRs for which there was a payment default within the first 12 months of modification during the years ended September 30, 2021, 2020 or 2019.