| Loans And Allowance For Loan Losses | LOANS AND ALLOWANCE FOR LOAN LOSSES Loans held for investment consist of the following: March 31, September 30, Real estate loans: Residential Core $ 10,873,401 $ 10,746,204 Residential Home Today 101,361 108,964 Home equity loans and lines of credit 1,690,708 1,552,315 Construction 54,524 60,956 Real estate loans 12,719,994 12,468,439 Other consumer loans 2,812 3,050 Add (deduct): Deferred loan expenses, net 35,023 30,865 Loans in process ("LIP") (31,822 ) (34,100 ) Allowance for loan losses (43,106 ) (48,948 ) Loans held for investment, net $ 12,682,901 $ 12,419,306 At March 31, 2018 and September 30, 2017 , respectively, $469 and $351 of loans were classified as mortgage loans held for sale. A large concentration of the Company’s lending is in Ohio and Florida. As of March 31, 2018 and September 30, 2017 , the percentage of aggregate Residential Core, Home Today and Construction loans held in Ohio was 57% as of both dates and the percentage held in Florida was 16% as of both dates. As of March 31, 2018 and September 30, 2017 , home equity loans and lines of credit were concentrated in Ohio ( 37% and 39% ), Florida ( 21% and 22% ), and California ( 14% and 13% ). Home Today was an affordable housing program targeted to benefit low- and moderate-income home buyers and most loans under the program were originated prior to 2009. No new loans were originated under the Home Today program after September 30, 2016. Through this program the Association provided the majority of loans to borrowers who would not otherwise qualify for the Association’s loan products, generally because of low credit scores. Although the credit profiles of borrowers in the Home Today program might be described as sub-prime, Home Today loans generally contained the same features as loans offered to our Residential Core borrowers. Borrowers with a Home Today loan completed financial management education and counseling and were referred to the Association by a sponsoring organization with which the Association partnered as part of the program. Because the Association applied less stringent underwriting and credit standards to the majority of Home Today loans, loans originated under the program have greater credit risk than its traditional residential real estate mortgage loans in the Residential Core portfolio. As of March 31, 2018 and September 30, 2017 , the principal balance of Home Today loans originated prior to March 27, 2009 was $97,974 and $105,485 , respectively. Since loans are no longer originated under the Home Today program, the Home Today portfolio will continue to decline in balance due to contractual amortization. To supplant the Home Today product and to continue to meet the credit needs of customers and the communities served, during fiscal 2016 the Association began to offer Fannie Mae eligible, Home Ready loans. These loans are originated in accordance with Fannie Mae's underwriting standards. While the Association retains the servicing to these loans, the loans, along with the credit risk associated therewith, are securitized/sold to Fannie Mae. The Association does not offer, and has not offered, loan products frequently considered to be designed to target sub-prime borrowers containing features such as higher fees or higher rates, negative amortization, a loan-to-value ratio greater than 100%, or pay option adjustable-rate mortgages. An age analysis of the recorded investment in loan receivables that are past due at March 31, 2018 and September 30, 2017 is summarized in the following tables. When a loan is more than one month past due on its scheduled payments, the loan is considered 30 days or more past due. Balances are adjusted for deferred loan fees or expenses and any applicable loans-in-process. 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total March 31, 2018 Real estate loans: Residential Core $ 7,863 $ 2,948 $ 11,050 $ 21,861 $ 10,866,832 $ 10,888,693 Residential Home Today 2,485 894 5,913 9,292 91,977 101,269 Home equity loans and lines of credit 3,986 1,427 5,883 11,296 1,699,534 1,710,830 Construction — — — — 22,403 22,403 Total real estate loans 14,334 5,269 22,846 42,449 12,680,746 12,723,195 Other consumer loans — — — — 2,812 2,812 Total $ 14,334 $ 5,269 $ 22,846 $ 42,449 $ 12,683,558 $ 12,726,007 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total September 30, 2017 Real estate loans: Residential Core $ 6,077 $ 2,593 $ 11,975 $ 20,645 $ 10,740,398 $ 10,761,043 Residential Home Today 4,067 1,496 6,851 12,414 95,269 107,683 Home equity loans and lines of credit 4,418 1,952 5,408 11,778 1,558,273 1,570,051 Construction — — — — 26,427 26,427 Total real estate loans 14,562 6,041 24,234 44,837 12,420,367 12,465,204 Other consumer loans — — — — 3,050 3,050 Total $ 14,562 $ 6,041 $ 24,234 $ 44,837 $ 12,423,417 $ 12,468,254 At March 31, 2018 and September 30, 2017 , real estate loans include $12,380 and $14,736 , respectively, of loans that were in the process of foreclosure. Loans are placed in non-accrual status when they are contractually 90 days or more past due. Loans restructured in TDRs that were in non-accrual status prior to the restructurings remain in non-accrual status for a minimum of six months after restructuring. Loans where the borrowers' sustained ability to repay is not reasonably assured at the time of modification are placed in non-accrual status for a minimum of twelve months. Additionally, home equity loans and lines of credit where the customer has a severely delinquent first mortgage loan and loans in Chapter 7 bankruptcy status where all borrowers have filed, and not reaffirmed or been dismissed, are placed in non-accrual status. The recorded investment of loans in non-accrual status is summarized in the following table. Balances are adjusted for deferred loan fees or expenses. March 31, September 30, Real estate loans: Residential Core $ 41,223 $ 43,797 Residential Home Today 16,248 18,109 Home equity loans and lines of credit 20,777 17,185 Total non-accrual loans $ 78,248 $ 79,091 At March 31, 2018 and September 30, 2017 , respectively, the recorded investment in non-accrual loans includes $55,402 and $54,858 , which are performing according to the terms of their agreement, of which $31,971 and $34,142 are loans in Chapter 7 bankruptcy status primarily where all borrowers have filed, and have not reaffirmed or been dismissed. Interest on loans in accrual status, including certain loans individually reviewed for impairment, is recognized in interest income as it accrues, on a daily basis. Accrued interest on loans in non-accrual status is reversed by a charge to interest income and income is subsequently recognized only to the extent cash payments are received. Cash payments on loans in non-accrual status are first applied to the oldest scheduled, unpaid payment. Cash payments on loans with a partial charge-off are applied fully to principal, then to recovery of the charged off amount prior to interest income being recognized, except cash payments may be applied to interest capitalized in a restructuring when collection of remaining amounts due is considered probable. A non-accrual loan is generally returned to accrual status when contractual payments are less than 90 days past due. However, a loan may remain in non-accrual status when collectability is uncertain, such as a TDR that has not met minimum payment requirements, a loan with a partial charge-off, an equity loan or line of credit with a delinquent first mortgage greater than 90 days past due, or a loan in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed. The number of days past due is determined by the number of scheduled payments that remain unpaid, assuming a period of 30 days between each scheduled payment. The recorded investment in loan receivables at March 31, 2018 and September 30, 2017 is summarized in the following table. The table provides details of the recorded balances according to the method of evaluation used for determining the allowance for loan losses, distinguishing between determinations made by evaluating individual loans and determinations made by evaluating groups of loans not individually evaluated. Balances of recorded investments are adjusted for deferred loan fees or expenses and any applicable loans-in-process. March 31, 2018 September 30, 2017 Individually Collectively Total Individually Collectively Total Real estate loans: Residential Core $ 92,297 $ 10,796,396 $ 10,888,693 $ 94,747 $ 10,666,296 $ 10,761,043 Residential Home Today 44,373 56,896 101,269 46,641 61,042 107,683 Home equity loans and lines of credit 43,603 1,667,227 1,710,830 39,172 1,530,879 1,570,051 Construction — 22,403 22,403 — 26,427 26,427 Total real estate loans 180,273 12,542,922 12,723,195 180,560 12,284,644 12,465,204 Other consumer loans — 2,812 2,812 — 3,050 3,050 Total $ 180,273 $ 12,545,734 $ 12,726,007 $ 180,560 $ 12,287,694 $ 12,468,254 An analysis of the allowance for loan losses at March 31, 2018 and September 30, 2017 is summarized in the following table. The analysis provides details of the allowance for loan losses according to the method of evaluation, distinguishing between allowances for loan losses determined by evaluating individual loans and allowances for loan losses determined by evaluating groups of loans collectively. March 31, 2018 September 30, 2017 Individually Collectively Total Individually Collectively Total Real estate loans: Residential Core $ 7,140 $ 6,940 $ 14,080 $ 7,336 $ 6,850 $ 14,186 Residential Home Today 2,116 1,624 3,740 2,250 2,258 4,508 Home equity loans and lines of credit 2,046 23,236 25,282 1,475 28,774 30,249 Construction — 4 4 — 5 5 Total $ 11,302 $ 31,804 $ 43,106 $ 11,061 $ 37,887 $ 48,948 At March 31, 2018 and September 30, 2017 , individually evaluated loans that required an allowance were comprised only of loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, and loans with a further deterioration in the fair value of collateral not yet identified as uncollectible. All other individually evaluated loans received a charge-off, if applicable. Because many variables are considered in determining the appropriate level of general valuation allowances, directional changes in individual considerations do not always align with the directional change in the balance of a particular component of the general valuation allowance. At March 31, 2018 and September 30, 2017 , respectively, allowances on individually reviewed loans evaluated for impairment based on the present value of cash flows, such as performing TDRs, were $11,249 and $11,061 ; and allowances on loans with further deteriorations in the fair value of collateral not yet identified as uncollectible were $53 and $0 . Residential Core mortgage loans represent the largest portion of the residential real estate portfolio. The Company believes overall credit risk is low based on the nature, composition, collateral, products, lien position and performance of the portfolio. The portfolio does not include loan types or structures that have historically experienced severe performance problems at other financial institutions (sub-prime, no documentation or pay option adjustable rate mortgages). As described earlier in this footnote, Home Today loans have greater credit risk than traditional residential real estate mortgage loans. At March 31, 2018 and September 30, 2017 , respectively, approximately 20% and 22% of Home Today loans include private mortgage insurance coverage. The majority of the coverage on these loans was provided by PMI Mortgage Insurance Co., which was seized by the Arizona Department of Insurance in 2011 and currently pays all claim payments at 71.5% . Appropriate adjustments have been made to the Association’s affected valuation allowances and charge-offs, and estimated loss severity factors were adjusted accordingly for loans evaluated collectively. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by PMIC as of March 31, 2018 and September 30, 2017 , respectively, was $48,444 and $61,470 , of which $44,694 and $56,511 was current. The amount of loans in the Association's total owned residential portfolio covered by mortgage insurance provided by Mortgage Guaranty Insurance Corporation as of March 31, 2018 and September 30, 2017 , respectively, was $24,906 and $28,946 of which $24,787 and $28,870 was current. As of March 31, 2018 , MGIC's long-term debt rating, as published by the major credit rating agencies, did not meet the requirements to qualify as "high credit quality"; however, MGIC continues to make claims payments in accordance with its contractual obligations and the Association has not increased its estimated loss severity factors related to MGIC's claim paying ability. No other loans were covered by mortgage insurers that were deferring claim payments or which were assessed as being non-investment grade. Home equity loans and lines of credit, which are comprised primarily of home equity lines of credit, represent a significant portion of the residential real estate portfolio. Post-origination deterioration in economic and housing market conditions may impact a borrower's ability to afford the higher payments required during the end of draw repayment period that follows the period of interest only payments on home equity lines of credit originated prior to 2012 or the ability to secure alternative financing. Beginning in February 2013, the terms on new home equity lines of credit included monthly principal and interest payments throughout the entire term to minimize the potential payment differential between the draw and after draw periods. The Association originates construction loans to individuals for the construction of their personal single-family residence by a qualified builder (construction/permanent loans). The Association’s construction/permanent loans generally provide for disbursements to the builder or sub-contractors during the construction phase as work progresses. During the construction phase, the borrower only pays interest on the drawn balance. Upon completion of construction, the loan converts to a permanent amortizing loan without the expense of a second closing. The Association offers construction/permanent loans with fixed or adjustable rates, and a current maximum loan-to-completed-appraised value ratio of 85%. Other consumer loans are comprised of loans secured by certificate of deposit accounts, which are fully recoverable in the event of non-payment. For all classes of loans, a loan is considered impaired when, based on current information and events, it is probable that the Association will be unable to collect the scheduled payments of principal and interest according to the contractual terms of the loan agreement. Factors considered in determining that a loan is impaired may include the deteriorating financial condition of the borrower indicated by missed or delinquent payments, a pending legal action, such as bankruptcy or foreclosure, or the absence of adequate security for the loan. The recorded investment and the unpaid principal balance of impaired loans, including those reported as TDRs, as of March 31, 2018 and September 30, 2017 are summarized as follows. Balances of recorded investments are adjusted for deferred loan fees or expenses. March 31, 2018 September 30, 2017 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related IVA recorded: Residential Core $ 53,929 $ 70,129 $ — $ 47,507 $ 65,132 $ — Residential Home Today 17,467 37,076 — 18,780 41,064 — Home equity loans and lines of credit 21,324 27,759 — 18,793 25,991 — Total $ 92,720 $ 134,964 $ — $ 85,080 $ 132,187 $ — With an IVA recorded: Residential Core $ 38,368 $ 38,446 $ 7,140 $ 47,240 $ 47,747 $ 7,336 Residential Home Today 26,906 26,891 2,116 27,861 28,210 2,250 Home equity loans and lines of credit 22,279 22,317 2,046 20,379 20,389 1,475 Total $ 87,553 $ 87,654 $ 11,302 $ 95,480 $ 96,346 $ 11,061 Total impaired loans: Residential Core $ 92,297 $ 108,575 $ 7,140 $ 94,747 $ 112,879 $ 7,336 Residential Home Today 44,373 63,967 2,116 46,641 69,274 2,250 Home equity loans and lines of credit 43,603 50,076 2,046 39,172 46,380 1,475 Total $ 180,273 $ 222,618 $ 11,302 $ 180,560 $ 228,533 $ 11,061 At March 31, 2018 and September 30, 2017 , respectively, the recorded investment in impaired loans includes $161,676 and $162,020 of loans restructured in TDRs of which $10,408 and $11,884 were 90 days or more past due. The average recorded investment in impaired loans and the amount of interest income recognized during the period that the loans were impaired are summarized below. For the Three Months Ended March 31, 2018 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related IVA recorded: Residential Core $ 50,403 $ 1,374 $ 51,256 $ 431 Residential Home Today 17,454 856 19,601 42 Home equity loans and lines of credit 20,071 99 19,622 82 Total $ 87,928 $ 2,329 $ 90,479 $ 555 With an IVA recorded: Residential Core $ 42,180 $ 535 $ 51,075 $ 468 Residential Home Today 27,211 620 29,785 361 Home equity loans and lines of credit 21,633 144 18,095 120 Total $ 91,024 $ 1,299 $ 98,955 $ 949 Total impaired loans: Residential Core $ 92,583 $ 1,909 $ 102,331 $ 899 Residential Home Today 44,665 1,476 49,386 403 Home equity loans and lines of credit 41,704 243 37,717 202 Total $ 178,952 $ 3,628 $ 189,434 $ 1,504 For the Six Months Ended March 31, 2018 2017 Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized With no related IVA recorded: Residential Core $ 50,718 $ 1,760 $ 52,216 $ 742 Residential Home Today 18,124 972 19,782 149 Home equity loans and lines of credit 20,059 173 19,957 149 Total $ 88,901 $ 2,905 $ 91,955 $ 1,040 With an IVA recorded: Residential Core $ 42,804 $ 955 $ 51,912 $ 978 Residential Home Today 27,384 956 30,282 738 Home equity loans and lines of credit 21,329 275 17,354 598 Total $ 91,517 $ 2,186 $ 99,548 $ 2,314 Total impaired loans: Residential Core $ 93,522 $ 2,715 $ 104,128 $ 1,720 Residential Home Today 45,508 1,928 50,064 887 Home equity loans and lines of credit 41,388 448 37,311 747 Total $ 180,418 $ 5,091 $ 191,503 $ 3,354 Interest on loans in non-accrual status is recognized on a cash basis. The amount of interest income on impaired loans recognized using a cash basis method was $795 and $1,208 for the three and six months ended March 31, 2018 and $414 and $770 for the three and six months ended March 31, 2017 . Cash payments on loans with a partial charge-off are applied fully to principal, then to recovery of the charged off amount prior to interest income being recognized, except cash payments may be applied to interest capitalized in a restructuring when collection of remaining amounts due is considered probable. Interest income on the remaining impaired loans is recognized on an accrual basis. Charge-offs on residential mortgage loans, home equity loans and lines of credit, and construction loans are recognized when triggering events, such as foreclosure actions, short sales, or deeds accepted in lieu of repayment, result in less than full repayment of the recorded investment in the loans. Partial or full charge-offs are also recognized for the amount of impairment on loans considered collateral dependent that meet the conditions described below. • For residential mortgage loans, payments are 180 days delinquent; • For home equity lines of credit, equity loans, and residential loans restructured in a TDR, payments are greater than 90 days delinquent; • For all classes of loans, a sheriff sale is scheduled within 60 days to sell the collateral securing the loan; • For all classes of loans, all borrowers have been discharged of their obligation through a Chapter 7 bankruptcy; • For all classes of loans, within 60 days of notification, all borrowers obligated on the loan have filed Chapter 7 bankruptcy and have not reaffirmed or been dismissed; • For all classes of loans, a borrower obligated on a loan has filed bankruptcy and the loan is greater than 30 days delinquent; and • For all classes of loans, it becomes evident that a loss is probable. Collateral dependent residential mortgage loans and construction loans are charged off to the extent the recorded investment in a loan, net of anticipated mortgage insurance claims, exceeds the fair value less costs to dispose of the underlying property. Management can determine the loan is uncollectible for reasons such as foreclosures exceeding a reasonable time frame and recommend a full charge-off. Home equity loans or lines of credit are charged off to the extent the recorded investment in the loan plus the balance of any senior liens exceeds the fair value less costs to dispose of the underlying property or management determines the collateral is not sufficient to satisfy the loan. A loan in any portfolio that is identified as collateral dependent will continue to be reported as impaired until it is no longer considered collateral dependent, is less than 30 days past due and does not have a prior charge-off. A loan in any portfolio that has a partial charge-off consequent to impairment evaluation will continue to be individually evaluated for impairment until, at a minimum, the impairment has been recovered. The following is a summary of any charge-off policy that was changed or first implemented during the current and previous four fiscal years, the effective date and the portfolios to which the policy applies. Effective Date Policy Portfolio(s) Affected 6/30/2014 A loan is considered collateral dependent and any collateral shortfall is charged off when, within 60 days of notification, all borrowers obligated on a loan filed Chapter 7 bankruptcy and have not reaffirmed or been dismissed (1) All ____________________________ (1) Prior to 6/30/2014, collateral shortfalls on loans in Chapter 7 bankruptcy were charged off when all borrowers were discharged of the obligation or when the loan was 30 days or more past due. Loans restructured in TDRs that are not evaluated based on collateral are separately evaluated for impairment on a loan by loan basis at the time of restructuring and at each subsequent reporting date for as long as they are reported as TDRs. The impairment evaluation is based on the present value of expected future cash flows discounted at the effective interest rate of the original loan. Expected future cash flows include a discount factor representing a potential for default. Valuation allowances are recorded for the excess of the recorded investments over the result of the cash flow analysis. Loans discharged in Chapter 7 bankruptcy are reported as TDRs and also evaluated based on the present value of expected future cash flows unless evaluated based on collateral. We evaluate these loans using the expected future cash flows because we expect the borrower, not liquidation of the collateral, to be the source of repayment for the loan. Other consumer loans are not considered for restructuring. A loan restructured in a TDR is classified as an impaired loan for a minimum of one year. After one year, that loan may be reclassified out of the balance of impaired loans if the loan was restructured to yield a market rate for loans of similar credit risk at the time of restructuring and the loan is not impaired based on the terms of the restructuring agreement. No loans whose terms were restructured in TDRs were reclassified from impaired loans during the six months ended March 31, 2018 and March 31, 2017 . The recorded investment in TDRs by type of concession as of March 31, 2018 and September 30, 2017 is shown in the tables below. March 31, 2018 Reduction in Interest Rates Payment Extensions Forbearance or Other Actions Multiple Concessions Multiple Restructurings Bankruptcy Total Residential Core $ 10,699 $ 403 $ 9,590 $ 19,222 $ 20,383 $ 22,868 $ 83,165 Residential Home Today 4,638 — 4,984 10,180 18,589 4,114 42,505 Home equity loans and lines of credit 99 5,561 2,059 19,266 2,026 6,995 36,006 Total $ 15,436 $ 5,964 $ 16,633 $ 48,668 $ 40,998 $ 33,977 $ 161,676 September 30, 2017 Reduction in Interest Rates Payment Extensions Forbearance Multiple Concessions Multiple Bankruptcy Total Residential Core $ 12,485 $ 521 $ 8,176 $ 21,278 $ 20,459 $ 23,670 $ 86,589 Residential Home Today 5,441 — 4,811 10,538 18,877 4,337 44,004 Home equity loans and lines of credit 106 6,033 373 14,661 1,471 8,783 31,427 Total $ 18,032 $ 6,554 $ 13,360 $ 46,477 $ 40,807 $ 36,790 $ 162,020 TDRs may be restructured more than once. Among other requirements, a subsequent restructuring may be available for a borrower upon the expiration of temporary restructuring terms if the borrower cannot return to regular loan payments. If the borrower is experiencing an income curtailment that temporarily has reduced his/her capacity to repay, such as loss of employment, reduction of hours, non-paid leave or short term disability, a temporary restructuring is considered. If the borrower lacks the capacity to repay the loan at the current terms due to a permanent condition, a permanent restructuring is considered. In evaluating the need for a subsequent restructuring, the borrower’s ability to repay is generally assessed utilizing a debt to income and cash flow analysis. As the economy has improved, the need for multiple restructurings has begun to abate. Loans discharged in Chapter 7 bankruptcy are classified as multiple restructurings if the loan's original terms had also been restructured by the Association. For all loans restructured during the three and six months ended March 31, 2018 and March 31, 2017 (set forth in the tables below), the pre-restructured outstanding recorded investment was not materially different from the post-restructured outstanding recorded investment. The following tables set forth the recorded investment in TDRs restructured during the periods presented, according to the types of concessions granted. For the Three Months Ended March 31, 2018 Reduction in Interest Rates Payment Extensions Forbearance Multiple Concessions Multiple Bankruptcy Total Residential Core $ — $ — $ 285 $ 89 $ 1,035 $ 1,242 $ 2,651 Residential Home Today — — 17 216 509 90 832 Home equity loans and lines of credit — 326 — 4,882 426 225 5,859 Total $ — $ 326 $ 302 $ 5,187 $ 1,970 $ 1,557 $ 9,342 For the Three Months Ended March 31, 2017 Reduction in Interest Rates Payment Extensions Forbearance Multiple Concessions Multiple Bankruptcy Total Residential Core $ 521 $ — $ 274 $ 107 $ 156 $ 611 $ 1,669 Residential Home Today 12 — 189 78 963 119 1,361 Home equity loans and lines of credit — 773 — 1,838 89 460 3,160 Total $ 533 $ 773 $ 463 $ 2,023 $ 1,208 $ 1,190 $ 6,190 For the Six Months Ended March 31, 2018 Reduction in Interest Rates Payment Extensions Forbearance Multiple Concessions Multiple Bankruptcy Total Residential Core $ 162 $ — $ 570 $ 639 $ 2,111 $ 1,807 $ 5,289 Residential Home Today — — 134 308 1,264 382 2,088 Home equity loans and lines of credit — 565 — 6,291 609 312 7,777 Total $ 162 $ 565 $ 704 $ 7,238 $ 3,984 $ 2,501 $ 15,154 For the Six Months Ended March 31, 2017 Reduction Payment Extensions Forbearance Multiple Concessions Multiple Bankruptcy Total Residential Core $ 521 $ — $ 475 $ 924 $ 879 $ 1,111 $ 3,910 Residential Home Today 81 — 258 311 1,471 311 2,432 Home equity loans and lines of credit — 1,000 — 4,094 275 989 6,358 Total $ 602 $ 1,000 $ 733 $ 5,329 $ 2,625 $ 2,411 $ 12,700 Below summarizes the information on TDRs restructured within the previous 12 months of the period presented for which there was a subsequent payment default, at least 30 days past due on one scheduled payment, during the period presented. For the Three Months Ended March 31, 2018 2017 TDRs Within the Previous 12 Months That Subsequently Defaulted Number of Contracts Recorded Investment Number of Recorded Residential Core 9 $ 853 13 $ 1,031 Residential Home Today 19 805 20 951 Home equity loans and lines of credit 7 557 13 636 Total 35 $ 2,215 46 $ 2,618 For the Six Months Ended March 31, 2018 2017 TDRs Within the Previous 12 Months That Subsequently Defaulted Number of Contracts Recorded Investment Number of Recorded Residential Core 12 $ 1,488 17 $ 1,472 Residential Home Today 19 805 20 951 Home equity loans and lines of credit 8 557 18 676 Total 39 $ 2,850 55 $ 3,099 Residential loans are internally assigned a grade that complies with the guidelines outlined in the OCC’s Handbook for Rating Credit Risk. Pass loans are assets well protected by the current paying capacity of the borrower. Special Mention loans have a potential weakness, as evaluated based on delinquency status, that the Association feels deserve management’s attention and may result in further deterioration in their repayment prospects and/or the Association’s credit position. Substandard loans are inadequately protected by the current payment capacity of the borrower or the collateral pledged with a defined weakness that jeopardizes the liquidation of the debt. Also included in Substandard are performing home equity loans and lines of credit where the customer has a severely delinquent first mortgage to which the performing home equity loan or line of credit is subordinate and loans in Chapter 7 bankruptcy status where all borrowers have filed, and have not reaffirmed or been dismissed. Loss loans are considered uncollectible and are charged off when identified. The following tables provide information about the credit quality of residential loan receivables by an internally assigned grade. Balances are adjusted for deferred loan fees or expenses and any applicable LIP. Pass Special Mention Substandard Loss Total March 31, 2018 Real estate loans: Residential Core $ 10,840,156 $ — $ 48,537 $ — $ 10,888,693 Residential Home Today 82,805 — 18,464 — 101,269 Home equity loans and lines of credit 1,683,474 3,181 24,175 — 1,710,830 Construction 22,403 — — — 22,403 Total $ 12,628,838 $ 3,181 $ 91,176 $ — $ 12,723,195 Pass Special Mention Substandard Loss Total September 30, 2017 Real estate loans: Residential Core $ 10,709,739 $ — $ 51,304 $ — $ 10,761,043 Residential Home Today 88,247 — 19,436 — 107,683 Home equity loans and lines of credit 1,545,658 3,837 20,556 — 1,570,051 Construction 26,427 — — — 26,427 Total $ 12,370,071 $ 3,837 $ 91,296 $ — $ 12,465,204 At March 31, 2018 and September 30, 2017 , respectively, the recorded investment of impaired loans includes $94,626 and $94,104 of TDRs that are individually evaluated for impairment, but have adequately performed under the terms of the restructuring and are classified as Pass loans. At March 31, 2018 and September 30, 2017 , respectively, there were $5,529 and $4,840 of loans classified Substandard and $3,181 and $3,837 of loans designated Special Mention that are not included in the recorded investment of impaired loans; rather, they are included in loans collectively evaluated for impairment. Other consumer loans are internally assigned a grade of nonperforming when they become 90 days or more past due. At March 31, 2018 and September 30, 2017 , no consumer loans were graded as nonperforming. Activity in the allowance for loan losses is summarized as follows: For the Three Months Ended March 31, 2018 Beginning Balance Provisions Charge-offs Recoveries Ending Balance Real estate loans: Residential Core $ 13,546 $ (58 ) $ (195 ) $ 787 $ 14,080 Residential Home Today 4,134 (705 ) (288 ) 599 3,740 Home equity loans and lines of credit 28,245 (3,237 ) (1,619 ) 1,893 25,282 Construction 4 — — — 4 Total $ 45,929 $ (4,000 ) $ (2,102 ) $ 3,279 $ 43,106 For the Three Months Ended March 31, 2017 Beginning Balance Provisions Charge-offs Recoveries Ending Balance Real estate loans: Residential Core $ 14,807 $ (3,292 ) $ (727 ) $ 2,148 $ 12,936 Residential Home Today 5,955 (1,176 ) (396 ) 317 4,700 Home equity loans and lines of credit 39,680 (1,530 ) (1,108 ) 2,160 39,202 Construction 5 (2 ) — — 3 Total $ 60,447 $ (6,000 ) $ (2,231 ) $ 4,625 $ 56,841 For the Six Months Ended March 31, 2018 Beginning Balance Provisions Charge-offs Recoveries Ending Balance Real estate loans: Residential Core $ 14,186 $ (899 ) $ (587 ) $ 1,380 $ 14,080 Residential Home Today 4,508 (806 ) (963 ) 1,001 3,740 Home equity loans and lines of credit 30,249 (5,294 ) (3,155 ) 3,482 25,282 Construction 5 (1 ) — — 4 Total $ 48,948 $ (7,000 ) $ (4,705 ) $ 5,863 $ 43,10 |
