XML 55 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Loans Receivable
 12 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans Receivable LOANS RECEIVABLE 
For a detailed discussion of loans and credit quality, including accounting policies and the CECL methodology used to estimate the allowance for credit losses, see Note A "Summary of Significant Accounting Policies" and Note B "New Accounting Pronouncements" above.

The Company's loans held for investment are divided into two portfolio segments, commercial loans and consumer loans, with each of those segments further split into loan classes for purposes of estimating the allowance for credit losses.

The following table is a summary of loans receivable by loan portfolio segment and class.

 September 30, 2020September 30, 2019
 ($ in thousands)($ in thousands)
Gross loans by category
Commercial loans
   Multi-family$1,538,762 10.6 %$1,422,674 10.7 %
   Commercial real estate1,895,086 13.1 1,631,170 12.3 
   Commercial & industrial (1)2,132,160 14.7 1,268,695 9.5 
   Construction2,403,276 16.6 2,038,052 15.3 
   Land - acquisition & development193,745 1.3 204,107 1.5 
 Total commercial loans8,163,029 56.3 6,564,698 49.3 
Consumer loans
 Single-family residential5,304,689 36.7 5,835,194 43.8 
 Construction - custom674,879 4.7 540,741 4.1 
 Land - consumer lot loans102,263 0.7 99,694 0.7 
   HELOC139,703 1.0 142,178 1.1 
   Consumer83,159 0.6 129,883 1.0 
 Total consumer loans6,304,693 43.7 6,747,690 50.7 
Total gross loans14,467,722 100 %13,312,388 100 %
   Less:
      Allowance for loan losses166,955 131,534 
      Loans in process1,456,072 1,201,341 
      Net deferred fees, costs and discounts52,378 48,938 
Total loan contra accounts1,675,405 1,381,813 
Net loans$12,792,317 $11,930,575 
(1) Includes $762,004,000 of SBA Payroll Protection Program loans as of September 30, 2020.


The Company elected to exclude AIR from the amortized cost basis of loans for disclosure purposes and from the calculations of estimated credit losses. As of September 30, 2020 and September 30, 2019, AIR for loans totaled $48,704,000 and $41,429,000, respectively, and is included in the “accrued interest receivable” line item on the Company’s consolidated statements of financial condition.
Loans in the amount of $5,361,504,000 and $5,874,704,000 at September 30, 2020 and September 30, 2019, respectively, were pledged to secure borrowings from the FHLB as part of our liquidity management strategy. The FHLB does not have the right to sell or re-pledge these loans.
The following summary breaks down the Company's fixed rate and adjustable rate loans by time to maturity or to rate adjustment.
September 30, 2020
Fixed-RateAdjustable-Rate
Term To MaturityLoans% of LoansTerm To Rate AdjustmentLoans% of Loans
 (In thousands) (In thousands)
Within 1 year$128,254 1.0 %Less than 1 year$3,592,689 27.7 %
1 to 3 years1,179,316 9.1 1 to 3 years440,980 3.4 
3 to 5 years398,019 3.1 3 to 5 years588,366 4.5 
5 to 10 years1,044,581 8.1 5 to 10 years46,473 0.4 
10 to 20 years983,856 7.6 10 to 20 years25,190 0.2 
Over 20 years4,517,836 34.9 Over 20 years13,712 0.1 
$8,251,862 63.8 %$4,707,410 36.3 %


The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans, including unfunded commitments to lend, was $112,812,000 and $76,288,000 at September 30, 2020 and 2019, respectively. As of September 30, 2020, all of these loans were performing in accordance with contractual terms.
The following table sets forth the amortized cost basis of loans receivable for specific disclosures required by ASC 326.

 September 30, 2020September 30, 2019
 (In thousands, except ratio data)
Non-accrualNon-accrual with no ACL90 days or more past due and accruingNon-accrualNon-accrual with no ACL90 days or more past due and accruing
Commercial loans
Multi-family$— $— $— $— $— $— 
Commercial real estate3,771 — — 5,835 — — 
Commercial & industrial329 — — 1,292 — — 
Construction1,669 — — — — — 
Land - acquisition & development— — — 169 — — 
   Total commercial loans5,769 — — 7,296 — — 
Consumer loans
Single-family residential22,431 — 933 25,271 — 1,671 
Construction - custom— — — — — — 
Land - consumer lot loans243 — — 246 — 620 
HELOC553 — — 907 — — 
Consumer60 — 17 11 — 19 
   Total consumer loans23,287 — 950 26,435 — 2,310 
Total loans$29,056 $— $950 $33,731 $— $2,310 
% of total loans0.22 %0.28 %

The following tables break down loan delinquencies by loan portfolio segment and class.
September 30, 2020Days Delinquent Based on $ Amount of Loans% based
on $
Loan typeLoans Receivable (Amortized Cost)Current306090Total
($ in thousands)
Commercial loans
   Multi-Family$1,538,240 $1,538,240 $— $— $— $— — %
   Commercial Real Estate1,884,688 1,884,210 — 195 283 478 0.03 
   Commercial & Industrial2,115,513 2,114,650 — 583 280 863 0.04 
   Construction - Speculative1,352,414 1,350,752 — — 1,662 1,662 0.12 
   Land - Acquisition & Development153,571 153,571 — — — — — 
Total commercial loans7,044,426 7,041,423 — 778 2,225 3,003 0.04 
Consumer loans
   Single-Family Residential5,293,962 5,267,608 3,922 3,108 19,324 26,354 0.50 
   Construction - Custom295,953 295,953 — — — — — 
   Land - Consumer Lot Loans101,394 101,029 152 — 213 365 0.36 
   HELOC140,222 139,491 275 76 380 731 0.52 
   Consumer83,315 82,959 121 11 224 356 0.43 
Total consumer loans5,914,846 5,887,040 4,470 3,195 20,141 27,806 0.47 
Total Loans$12,959,272 $12,928,463 $4,470 $3,973 $22,366 $30,809 0.24 %
Delinquency %99.76%0.03%0.03%0.17%0.24%
September 30, 2019Days Delinquent Based on $ Amount of Loans% based
on $
Loan typeLoans Receivable (Net of Loans in Process)Current306090Total
($ in thousands)
Commercial loans
   Multi-Family$1,422,652 $1,422,652 $— $— $— $— — %
   Commercial Real Estate1,631,171 1,625,509 1,614 285 3,763 5,662 0.35 
   Commercial & Industrial1,268,695 1,267,828 — — 867 867 0.07 
   Construction - Speculative1,164,889 1,164,889 — — — — — 
   Land - Acquisition & Development161,194 161,194 — — — — — 
Total commercial loans5,648,601 5,642,072 1,614 285 4,630 6,529 0.12 
Consumer loans
   Single-Family Residential5,835,186 5,809,239 3,672 3,211 19,064 25,947 0.44 
   Construction - Custom255,505 255,505 — — — — — 
   Land - Consumer Lot Loans99,694 98,916 112 619 47 778 0.78 
   HELOC142,178 140,718 580 183 697 1,460 1.03 
   Consumer129,883 129,227 295 117 244 656 0.51 
Total consumer loans6,462,446 6,433,605 4,659 4,130 20,052 28,841 0.45 
Total Loans$12,111,047 $12,075,677 $6,273 $4,415 $24,682 $35,370 0.29 %
Delinquency %99.71%0.05%0.04%0.20%0.29%

The Company participated in the Small Business Administration’s Paycheck Protection Program. This program came about through the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) passed by Congress to help small businesses keep their employees employed through the COVID-19 shelter in place orders. In 2020, the Company assisted over 6,500 businesses with more than $780,000,000 in PPP loan originations.
The Company is actively working with its borrowers to modify consumer mortgage and commercial loans to provide payment deferrals as a result of the COVID-19 pandemic. The terms of the payment deferrals are generally 90 days for consumer mortgage loans and up to 180 days for commercial loans and borrowers may be eligible for multiple deferrals. Pursuant to the CARES Act, these loan modifications are not accounted for as TDRs. As of September 30, 2020, 612 mortgage loans totaling $171,000,000 and 69 commercial loans totaling $167,000,000 that had been modified remain in deferral. These loans are not considered past due until after the deferral period is over and scheduled payments have resumed.
Most TDRs are accruing and performing loans where the borrower has proactively approached the Company about modifications due to temporary financial difficulties. Each request is individually evaluated for merit and likelihood of success. The concession for these loans is typically a payment reduction through a rate reduction of 100 to 200 bps for a specific term, usually six to 12 months. Interest-only payments may also be approved during the modification period. Principal forgiveness is not an available option for restructured loans. As of September 30, 2020, the outstanding balance of TDRs was $91,408,000 as compared to $121,677,000 as of September 30, 2019. As of September 30, 2020, 97.4% of the restructured loans were performing. Single-family residential loans comprised 93.6% of TDRs as of September 30, 2020. The Company's ACL methodology takes into account the following performance indicators for restructured loans: 1) time since modification, 2) current payment status and 3) geographic area.

We evaluate the credit quality of our commercial loans based on regulatory risk ratings and also consider other factors. Based on this evaluation, the loans are assigned a grade and classified as follows:

•Pass – the credit does not meet one of the definitions below.
•Special mention – A special mention credit is considered to be currently protected from loss but is potentially weak. No loss of principal or interest is foreseen; however, proper supervision and management attention is required to deter further deterioration in the credit. Assets in this category constitute some undue and unwarranted credit risk but not to the point of justifying a risk rating of substandard. The credit risk may be relatively minor yet constitutes an unwarranted risk in light of the circumstances surrounding a specific asset.

•Substandard – A substandard credit is an unacceptable credit. Additionally, repayment in the normal course is in jeopardy due to the existence of one or more well defined weaknesses. In these situations, loss of principal is likely if the weakness is not corrected. A substandard asset is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Assets so classified will have a well-defined weakness or weaknesses that jeopardize the collection or liquidation of the debt. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets risk rated substandard.

•Doubtful – A credit classified doubtful has all the weaknesses inherent in one classified substandard with the added characteristic that the weakness makes collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The probability of loss is high, but because of certain important and reasonably specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and refinancing plans.

•Loss – Credits classified loss are considered uncollectible and of such little value that their continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. Losses should be taken in the period in which they are identified as uncollectible. Partial charge-off versus full charge-off may be taken if the collateral offers some identifiable protection.


The following tables present by credit quality indicator, loan class, and year of origination, the amortized cost basis of loans receivable as of September 30, 2020.
Term Loans Amortized Cost Basis by Origination Year
(In thousands)20202019201820172016Prior to 2016Revolving LoansRevolving to Term LoansTotal Loans
Commercial loans
Multi-family
Pass$397,008 $151,175 $267,832 $243,349 $177,888 $255,177 $14,263 $— $1,506,692 
Special Mention649 2,815 907 4,515 2,654 2,181 — — 13,721 
Substandard— 7,543 3,974 3,791 2,298 221 — — 17,827 
Total$397,657 $161,533 $272,713 $251,655 $182,840 $257,579 $14,263 $— $1,538,240 
Commercial real estate
Pass$425,246 $243,780 $259,958 $265,841 $182,584 $301,156 $2,558 $107 $1,681,230 
Special Mention5,096 13,694 3,987 14,910 303 54,194 — — 92,184 
Substandard4,196 25,607 2,718 38,289 10,041 30,423 — — 111,274 
Total$434,538 $283,081 $266,663 $319,040 $192,928 $385,773 $2,558 $107 $1,884,688 
Commercial & industrial
Pass$908,408 $64,015 $90,796 $79,421 $99,426 $75,672 $580,123 $848 $1,898,709 
Special Mention25,612 7,107 1,167 4,330 24,204 — 2,275 — 64,695 
Substandard30,894 9,696 10,780 901 23,907 4,561 71,223 147 152,109 
Total$964,914 $80,818 $102,743 $84,652 $147,537 $80,233 $653,621 $995 $2,115,513 
Construction
Pass$344,346 $405,030 $239,125 $132,034 $290 $— $66,961 $— $1,187,786 
Special Mention2,275 — 43,486 15,417 — — — — 61,178 
Substandard7 33,457 5,847 21,915 42,224 — — — 103,450 
Total$346,628 $438,487 $288,458 $169,366 $42,514 $— $66,961 $— $1,352,414 
Land - acquisition & development
Pass$47,223 $43,297 $18,139 $18,338 $3,774 $1,911 $5,316 $— $137,998 
Special Mention— — — — — 15,573 — — 15,573 
Total$47,223 $43,297 $18,139 $18,338 $3,774 $17,484 $5,316 $— $153,571 
Total commercial loans
Pass$2,122,231 $907,297 $875,850 $738,983 $463,962 $633,916 $669,221 $955 $6,412,415 
Special Mention33,632 23,616 49,547 39,172 27,161 71,948 2,275 — 247,351 
Substandard35,097 76,303 23,319 64,896 78,470 35,205 71,223 147 384,660 
Total$2,190,960 $1,007,216 $948,716 $843,051 $569,593 $741,069 $742,719 $1,102 $7,044,426 
Term Loans Amortized Cost Basis by Origination Year
(In thousands)20202019201820172016Prior to 2016Revolving LoansRevolving to Term LoansTotal Loans
Consumer loans
Single-family residential
Current$828,030 $585,133 $597,198 $714,066 $523,000 $2,020,181 $— $— $5,267,608 
30 days past due— — — 859 135 2,928 — — 3,922 
60 days past due— — — — — 3,108 — — 3,108 
90+ days past due— 680 — 440 640 17,564 — — 19,324 
Total$828,030 $585,813 $597,198 $715,365 $523,775 $2,043,781 $— $— $5,293,962 
Construction - custom
Current$200,853 $91,940 $3,160 $— $— $— $— $— $295,953 
Total$200,853 $91,940 $3,160 $— $— $— $— $— $295,953 
Land - consumer lot loans
Current$44,908 $18,139 $6,971 $7,693 $2,619 $20,699 $— $— $101,029 
30 days past due— — 152 — — — — — 152 
90+ days past due— — — 122 — 91 — — 213 
Total$44,908 $18,139 $7,123 $7,815 $2,619 $20,790 $— $— $101,394 
HELOC
Current$— $— $— $— $— $6,732 $131,353 $1,406 $139,491 
30 days past due— — — — — 44 231 — 275 
60 days past due— — — — — 37 39 — 76 
90+ days past due— — — — — 30 350 — 380 
Total$— $— $— $— $— $6,843 $131,973 $1,406 $140,222 
Consumer
Current$1,334 $1,527 $58,384 $129 $338 $18,523 $2,724 $— $82,959 
30 days past due— — — 62 — 59 — — 121 
60 days past due— — — — — 11 — — 11 
90+ days past due— 54 — 159 — 6 5 — 224 
Total$1,334 $1,581 $58,384 $350 $338 $18,599 $2,729 $— $83,315 
Total consumer loans
Current$1,075,125 $696,739 $665,713 $721,888 $525,957 $2,066,135 $134,077 $1,406 $5,887,040 
30 days past due— — 152 921 135 3,031 231 — 4,470 
60 days past due— — — — — 3,156 39 — 3,195 
90+ days past due— 734 — 721 640 17,691 355 — 20,141 
Total$1,075,125 $697,473 $665,865 $723,530 $526,732 $2,090,013 $134,702 $1,406 $5,914,846