| Loans Receivable And Allowance For Credit Losses | LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES Loans receivable, net at the dates presented is summarized as follows: June 30, 2024 September 30, 2023 (Dollars in thousands) One- to four-family: Originated $ 3,961,407 $ 3,978,837 Correspondent purchased 2,262,371 2,405,911 Bulk purchased 129,102 137,193 Construction 24,642 69,974 Total 6,377,522 6,591,915 Commercial: Commercial real estate 1,119,295 995,788 Commercial and industrial 131,848 112,953 Construction 214,240 178,746 Total 1,465,383 1,287,487 Consumer: Home equity 98,736 95,723 Other 9,637 9,256 Total 108,373 104,979 Total loans receivable 7,951,278 7,984,381 Less: ACL 25,854 23,759 Deferred loan fees/discounts 30,777 31,335 Premiums/deferred costs (38,396) (41,662) $ 7,933,043 $ 7,970,949 Lending Practices and Underwriting Standards - Originating one- to four-family loans is the Bank's primary lending business. The Bank also originates consumer loans primarily secured by one- to four-family residential properties and originates and participates in commercial loans. The Bank has historically also purchased one- to four-family loans from correspondent lenders, but during the current quarter the Bank suspended its one- to four-family correspondent lending channels for the foreseeable future. The Bank has a loan concentration in one- to four-family loans and a geographic concentration of these loans in Kansas and Missouri. One- to four-family loans - Full documentation to support an applicant's credit and income, and sufficient funds to cover all applicable fees and reserves at closing, are required on all loans. Properties securing one- to four-family loans are appraised by either staff appraisers or fee appraisers, both of which are independent of the loan origination function. The underwriting standards for loans purchased from correspondent lenders were generally similar to the Bank's internal underwriting standards. The underwriting of loans purchased from correspondent lenders on a loan-by-loan basis was performed by the Bank's underwriters. The Bank also originates owner-occupied construction-to-permanent loans secured by one- to four-family residential real estate. Construction draw requests and the supporting documentation are reviewed and approved by designated personnel. The Bank also performs regular documented inspections of the construction project to ensure the funds are being used for the intended purpose and the project is being completed according to the plans and specifications provided. Commercial loans - The Bank's commercial portfolio includes loans that are originated by the Bank or in participation with a lead bank. For commercial participation loans, the Bank performs the same underwriting procedures as if the loan was originated by the Bank. The Bank's commercial portfolio has a loan concentration in commercial real estate and commercial construction loans and a geographic concentration in Kansas, Texas, and Missouri. When underwriting a commercial real estate or commercial construction loan, several factors are considered, such as the income producing potential of the property, cash equity provided by the borrower, the financial strength of the borrower, managerial expertise of the borrower or tenant, feasibility studies, lending experience with the borrower and the marketability of the property. At the time of origination, loan-to-value ("LTV") ratios on commercial real estate loans generally do not exceed 85% of the appraised value of the property securing the loans and the minimum debt service coverage ratio ("DSCR") is generally 1.15x. The Bank generally requires a guaranty on all commercial real estate loans, but for an experienced borrower with a strong DSCR and LTV, the Bank may allow the guaranty percentage to be reduced, phased out or originated as a non-recourse loan. For commercial construction loans, LTV ratios generally do not exceed 80% of the projected appraised value of the property securing the loans and the minimum DSCR is generally 1.15x, but it applies to the projected cash flows, and the borrower must have successful experience with the construction and operation of properties similar to the subject property. Appraisals on properties securing these loans are performed by independent state certified fee appraisers. For construction loans, guaranties are typically required during the period of construction. After construction is complete, for select experienced borrowers that have a strong DSCR and LTV, the guaranty may be reduced or phased out when the property meets certain performance metrics. Additionally, the Bank generally requires the borrower to contribute equity at the start of a project and prior to any Bank funding. The Bank's commercial and industrial loans are generally made to borrowers and secured by assets located in the Bank's market areas and are underwritten on the basis of the borrower's ability to service the debt from income. Working capital loans are primarily collateralized by short-term assets whereas term loans are primarily collateralized by long-term assets. In general, commercial and industrial loans involve more credit risk than commercial real estate loans due to the type of collateral securing commercial and industrial loans. As a result of these additional complexities, variables and risks, commercial and industrial loans generally require more thorough underwriting and servicing than other types of loans. Management regularly monitors the level of risk in the entire commercial loan portfolio, including concentrations in such factors as geographic locations, collateral types, tenant brand name, borrowing relationships, and lending relationships in the case of participation loans, among other factors. Annual reviews are performed for larger loans and lending relationships. The annual reviews include evaluating updated financials, as well as performing stress tests to measure the ability of the loans to withstand certain stress scenarios such as interest rate increases, revenue decreases and expense increases. Consumer loans - The Bank offers a variety of consumer loans, the majority of which are home equity loans and lines of credit for which the Bank also has the first mortgage or the first lien position. The underwriting standards for consumer loans include a determination of an applicant's payment history on other debts and an assessment of an applicant's ability to meet existing obligations and payments on the proposed loan. Although creditworthiness of an applicant is a primary consideration, the underwriting process also includes a comparison of the value of the security in relation to the proposed loan amount. Credit Quality Indicators - Based on the Bank's lending emphasis and underwriting standards, management has segmented the loan portfolio into three segments: (1) one- to four-family; (2) consumer; and (3) commercial. These segments are further divided into classes for purposes of providing disaggregated credit quality information about the loan portfolio. The classes are: one- to four-family - originated, one- to four-family - correspondent purchased, one- to four-family - bulk purchased, consumer - home equity, consumer - other, commercial - commercial real estate, and commercial - commercial and industrial. One- to four-family construction loans are included in the originated class and commercial construction loans are included in the commercial real estate class. As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to loan classification and delinquency status. Loan Classification - In accordance with the Bank's asset classification policy, management regularly reviews the problem loans in the Bank's portfolio to determine whether any require classification. Loan classifications are defined as follows: • Special mention - These loans are performing loans on which known information about the collateral pledged or the possible credit problems of the borrower(s) have caused management to have doubts as to the ability of the borrower(s) to comply with present loan repayment terms and which may result in the future inclusion of such loans in the nonaccrual loan categories. • Substandard - A loan is considered substandard if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans include those characterized by the distinct possibility the Bank will sustain some loss if the deficiencies are not corrected. • Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses present make collection or liquidation in full on the basis of currently existing facts and conditions and values highly questionable and improbable. • Loss - Loans classified as loss are considered uncollectible and of such little value that their continuance as assets on the books is not warranted. The following tables set forth, as of the dates indicated, the amortized cost of loans by class of financing receivable, year of origination or most recent credit decision, and loan classification. All revolving lines of credit and revolving lines of credit converted to term loans are presented separately, regardless of origination year. Loans classified as doubtful or loss are individually evaluated for loss. At June 30, 2024 and September 30, 2023, there were no loans classified as doubtful, and all loans classified as loss were fully charged-off. June 30, 2024 Revolving Line of Current Fiscal Fiscal Fiscal Fiscal Revolving Credit Fiscal Year Year Year Year Prior Line of Converted Year 2023 2022 2021 2020 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Pass $ 171,792 $ 328,132 $ 585,775 $ 824,314 $ 533,544 $ 1,499,900 $ — $ — $ 3,943,457 Special Mention — 295 2,552 2,446 1,345 9,781 — — 16,419 Substandard — 490 28 218 557 9,794 — — 11,087 Correspondent purchased Pass 805 331,495 488,423 580,549 229,921 647,375 — — 2,278,568 Special Mention — 657 906 663 406 1,281 — — 3,913 Substandard — — 1,418 265 758 4,742 — — 7,183 Bulk purchased Pass — — — — — 126,268 — — 126,268 Special Mention — — — — — — — — — Substandard — — — — — 3,274 — — 3,274 172,597 661,069 1,079,102 1,408,455 766,531 2,302,415 — — 6,390,169 Commercial: Commercial real estate Pass 281,804 374,479 299,974 139,184 76,159 124,529 19,045 — 1,315,174 Special Mention 4,646 5,020 — — 54 1,154 — — 10,874 Substandard 142 805 — — 594 606 50 — 2,197 Commercial and industrial Pass 39,635 26,210 18,658 8,819 1,760 2,257 21,901 — 119,240 Special Mention 228 12,050 — — — — — — 12,278 Substandard 227 — — — — 82 31 — 340 326,682 418,564 318,632 148,003 78,567 128,628 41,027 — 1,460,103 Consumer: Home equity Pass 5,894 4,848 4,715 1,512 814 2,318 71,924 6,435 98,460 Special Mention — — — — — 16 25 227 268 Substandard — — — — 54 3 166 37 260 Other Pass 3,474 3,194 1,896 433 128 129 295 — 9,549 Special Mention — — — — 2 — — — 2 Substandard — 31 48 — 2 — 5 — 86 9,368 8,073 6,659 1,945 1,000 2,466 72,415 6,699 108,625 Total $ 508,647 $ 1,087,706 $ 1,404,393 $ 1,558,403 $ 846,098 $ 2,433,509 $ 113,442 $ 6,699 $ 7,958,897 September 30, 2023 Revolving Line of Fiscal Fiscal Fiscal Fiscal Fiscal Revolving Credit Year Year Year Year Year Prior Line of Converted 2023 2022 2021 2020 2019 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Pass $ 318,569 $ 597,298 $ 874,518 $ 568,081 $ 251,773 $ 1,398,616 $ — $ — $ 4,008,855 Special Mention — 1,883 1,468 767 1,863 8,067 — — 14,048 Substandard 292 155 221 564 939 7,954 — — 10,125 Correspondent purchased Pass 346,084 517,976 607,968 246,926 62,744 643,520 — — 2,425,218 Special Mention 308 674 1,674 420 357 1,133 — — 4,566 Substandard — — — 564 — 5,402 — — 5,966 Bulk purchased Pass — — — — — 134,464 — — 134,464 Special Mention — — — — — — — — — Substandard — — — — — 3,208 — — 3,208 665,253 1,117,986 1,485,849 817,322 317,676 2,202,364 — — 6,606,450 Commercial: Commercial real estate Pass 403,269 301,164 208,942 81,478 82,027 79,170 10,448 — 1,166,498 Special Mention 2,483 — — — — — — — 2,483 Substandard 67 — — 594 219 255 — — 1,135 Commercial and industrial Pass 30,206 23,166 11,740 3,228 2,693 748 27,104 — 98,885 Special Mention 13,191 — — — — — 699 — 13,890 Substandard — — — 73 — 82 — — 155 449,216 324,330 220,682 85,373 84,939 80,255 38,251 — 1,283,046 Consumer: Home equity Pass 5,501 5,624 1,955 1,069 746 2,224 72,119 6,205 95,443 Special Mention — 46 — — — 21 62 195 324 Substandard — — — — — 15 125 48 188 Other Pass 4,758 2,693 787 338 133 129 412 — 9,250 Special Mention — — — 4 — — — 1 5 Substandard 2 — — — — — — — 2 10,261 8,363 2,742 1,411 879 2,389 72,718 6,449 105,212 Total $ 1,124,730 $ 1,450,679 $ 1,709,273 $ 904,106 $ 403,494 $ 2,285,008 $ 110,969 $ 6,449 $ 7,994,708 Delinquency Status - The following tables set forth, as of the dates indicated, the amortized cost of current loans, loans 30 to 89 days delinquent, and loans 90 or more days delinquent or in foreclosure ("90+/FC"), by class of financing receivable and year of origination or most recent credit decision as of the dates indicated. All revolving lines of credit and revolving lines of credit converted to term loans are presented separately, regardless of origination year. June 30, 2024 Revolving Line of Current Fiscal Fiscal Fiscal Fiscal Revolving Credit Fiscal Year Year Year Year Prior Line of Converted Year 2023 2022 2021 2020 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Current $ 171,792 $ 328,747 $ 587,828 $ 826,342 $ 534,663 $ 1,512,418 $ — $ — $ 3,961,790 30-89 — 170 499 636 783 5,040 — — 7,128 90+/FC — — 28 — — 2,017 — — 2,045 Correspondent purchased Current 805 331,608 489,165 581,028 230,327 647,470 — — 2,280,403 30-89 — 544 164 449 — 4,181 — — 5,338 90+/FC — — 1,418 — 758 1,747 — — 3,923 Bulk purchased Current — — — — — 127,990 — — 127,990 30-89 — — — — — 277 — — 277 90+/FC — — — — — 1,275 — — 1,275 172,597 661,069 1,079,102 1,408,455 766,531 2,302,415 — — 6,390,169 Commercial: Commercial real estate Current 286,592 379,498 299,974 139,033 76,159 124,529 18,866 — 1,324,651 30-89 — 786 — 151 54 1,296 229 — 2,516 90+/FC — 20 — — 594 464 — — 1,078 Commercial and industrial Current 40,090 38,260 18,514 8,795 1,760 2,257 21,834 — 131,510 30-89 — — 144 24 — — 98 — 266 90+/FC — — — — — 82 — — 82 326,682 418,564 318,632 148,003 78,567 128,628 41,027 — 1,460,103 Consumer: Home equity Current 5,894 4,828 4,670 1,512 814 2,304 71,657 6,397 98,076 30-89 — 20 45 — — 30 321 302 718 90+/FC — — — — 54 3 137 — 194 Other Current 3,372 3,171 1,886 433 124 107 293 — 9,386 30-89 102 23 56 — 4 22 2 — 209 90+/FC — 31 2 — 4 — 5 — 42 9,368 8,073 6,659 1,945 1,000 2,466 72,415 6,699 108,625 Total $ 508,647 $ 1,087,706 $ 1,404,393 $ 1,558,403 $ 846,098 $ 2,433,509 $ 113,442 $ 6,699 $ 7,958,897 September 30, 2023 Revolving Line of Fiscal Fiscal Fiscal Fiscal Fiscal Revolving Credit Year Year Year Year Year Prior Line of Converted 2023 2022 2021 2020 2019 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Current $ 318,211 $ 598,283 $ 875,563 $ 567,975 $ 253,546 $ 1,407,090 $ — $ — $ 4,020,668 30-89 358 898 644 1,437 820 5,960 — — 10,117 90+/FC 292 155 — — 209 1,587 — — 2,243 Correspondent purchased Current 346,084 518,650 608,573 247,346 62,652 643,739 — — 2,427,044 30-89 308 — 1,069 564 449 2,862 — — 5,252 90+/FC — — — — — 3,454 — — 3,454 Bulk purchased Current — — — — — 136,577 — — 136,577 30-89 — — — — — 153 — — 153 90+/FC — — — — — 942 — — 942 665,253 1,117,986 1,485,849 817,322 317,676 2,202,364 — — 6,606,450 Commercial: Commercial real estate Current 404,867 301,164 208,942 81,478 82,027 79,188 10,448 — 1,168,114 30-89 36 — — — — — — — 36 90+/FC 916 — — 594 219 237 — — 1,966 Commercial and industrial Current 43,397 23,166 11,740 3,228 2,690 748 27,684 — 112,653 30-89 — — — — 2 — 57 — 59 90+/FC — — — 73 1 82 62 — 218 449,216 324,330 220,682 85,373 84,939 80,255 38,251 — 1,283,046 Consumer: Home equity Current 5,428 5,631 1,955 990 746 2,195 71,986 6,312 95,243 30-89 73 39 — 79 — 50 239 125 605 90+/FC — — — — — 15 81 11 107 Other Current 4,737 2,613 765 338 132 129 412 — 9,126 30-89 17 80 22 4 1 — — 1 125 90+/FC 6 — — — — — — — 6 10,261 8,363 2,742 1,411 879 2,389 72,718 6,449 105,212 Total $ 1,124,730 $ 1,450,679 $ 1,709,273 $ 904,106 $ 403,494 $ 2,285,008 $ 110,969 $ 6,449 $ 7,994,708 Gross Charge-Offs - Since the adoption of ASU 2022-02 on October 1, 2023, the Company has been required to present gross charge-offs by class of financing receivable and year of origination or most recent credit decision. The following table sets forth the required gross charge-off information for the nine month period ended June 30, 2024. Revolving Lines Current Fiscal Fiscal Fiscal Fiscal Revolving of Credit Fiscal Year Year Year Year Prior Lines of Converted to Year 2023 2022 2021 2020 Years Credit Term Total (Dollars in thousands) One- to four-family: Originated $ — $ — $ — $ — $ — $ — $ — $ — $ — Correspondent purchased — — — — — — — — — Bulk purchased — — — — — — — — — — — — — — — — — — Commercial: Commercial real estate 50 — — — — 10 — — 60 Commercial and Industrial — — — — — — — — — 50 — — — — 10 — — 60 Consumer: Home Equity 14 1 — — — — — — 15 Other — 9 13 — — 4 — — 26 14 10 13 — — 4 — — 41 Total $ 64 $ 10 $ 13 $ — $ — $ 14 $ — $ — $ 101 Delinquent and Nonaccrual Loans - The following tables present the amortized cost, at the dates indicated, by class, of loans 30 to 89 days delinquent, loans 90 or more days delinquent or in foreclosure, total delinquent loans, current loans, and total loans. At June 30, 2024 and September 30, 2023, all loans 90 or more days delinquent were on nonaccrual status. June 30, 2024 90 or More Days Total Total 30 to 89 Days Delinquent or Delinquent Current Amortized Delinquent in Foreclosure Loans Loans Cost (Dollars in thousands) One- to four-family: Originated $ 7,128 $ 2,045 $ 9,173 $ 3,961,790 $ 3,970,963 Correspondent purchased 5,338 3,923 9,261 2,280,403 2,289,664 Bulk purchased 277 1,275 1,552 127,990 129,542 Commercial: Commercial real estate 2,516 1,078 3,594 1,324,651 1,328,245 Commercial and industrial 266 82 348 131,510 131,858 Consumer: Home equity 718 194 912 98,076 98,988 Other 209 42 251 9,386 9,637 $ 16,452 $ 8,639 $ 25,091 $ 7,933,806 $ 7,958,897 September 30, 2023 90 or More Days Total Total 30 to 89 Days Delinquent or Delinquent Current Amortized Delinquent in Foreclosure Loans Loans Cost (Dollars in thousands) One- to four-family: Originated $ 10,117 $ 2,243 $ 12,360 $ 4,020,668 $ 4,033,028 Correspondent purchased 5,252 3,454 8,706 2,427,044 2,435,750 Bulk purchased 153 942 1,095 136,577 137,672 Commercial: Commercial real estate 36 1,966 2,002 1,168,114 1,170,116 Commercial and industrial 59 218 277 112,653 112,930 Consumer: Home equity 605 107 712 95,243 95,955 Other 125 6 131 9,126 9,257 $ 16,347 $ 8,936 $ 25,283 $ 7,969,425 $ 7,994,708 The amortized cost of mortgage loans secured by residential real estate for which formal foreclosure proceedings were in process as of June 30, 2024 and September 30, 2023 was $1.9 million and $2.5 million, respectively, which is included in loans 90 or more days delinquent or in foreclosure in the tables above. The carrying value of residential OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure was $219 thousand at September 30, 2023. There was no residential OREO held at June 30, 2024. The following table presents the amortized cost at June 30, 2024 and September 30, 2023, by class, of loans classified as nonaccrual. Additionally, the amortized cost of nonaccrual loans that had no related ACL is presented, all of which were individually evaluated for loss and any identified losses have been charged off. June 30, 2024 September 30, 2023 Nonaccrual Loans Nonaccrual Loans with No ACL Nonaccrual Loans Nonaccrual Loans with No ACL (Dollars in thousands) One- to four-family: Originated $ 2,046 $ 158 $ 2,457 $ 471 Correspondent purchased 3,923 — 3,739 285 Bulk purchased 1,275 817 942 630 Commercial: Commercial real estate 1,078 446 1,984 446 Commercial and industrial 113 83 218 155 Consumer: Home equity 194 — 107 3 Other 42 — 6 — $ 8,671 $ 1,504 $ 9,453 $ 1,990 Loan Modifications - The following tables present the amortized cost basis of loans as of June 30, 2024 that were both experiencing financial difficulties and modified during the periods noted, by class of financing receivable and by type of modification. Also presented in the tables is the percentage of the amortized cost basis of loans as of June 30, 2024 that were modified to borrowers experiencing financial difficulties as compared to the amortized cost basis of each class of financing receivable as of June 30, 2024. During the three months and nine months ended June 30, 2024, there was a $50 thousand charge-off related to a commercial real estate loan modified during the nine months ended June 30, 2024. The Company has not committed to lend additional amounts to borrowers included in these tables. For the Three Months Ended June 30, 2024 Combination- Total Term Extension Class of Principal Interest Rate Payment Term and Financing Forgiveness Reduction Delay Extension Payment Delay Total Receivable (Dollars in thousands) One- to four-family: Originated $ — $ — $ — $ 623 $ 59 $ 682 0.02 % Correspondent — — — — — — — Bulk purchased — — — — — — — — — — 623 59 682 0.01 Commercial: Commercial real estate — — — — — — — Commercial and industrial — — — — 30 30 0.02 — — — — 30 30 — Consumer loans: Home equity — — — — — — — Other — — — — — — — — — — — — — — Total $ — $ — $ — $ 623 $ 89 $ 712 0.01 For the Nine Months Ended June 30, 2024 Combination- Total Term Extension Class of Principal Interest Rate Payment Term and Financing Forgiveness Reduction Delay Extension Payment Delay Total Receivable (Dollars in thousands) One- to four-family: Originated $ — $ — $ — $ 623 $ 7,114 $ 7,737 0.19 % Correspondent — — — — 1,731 1,731 0.08 Bulk purchased — — — — — — — — — — 623 8,845 9,468 0.15 Commercial: Commercial real estate — — — — 192 192 0.01 Commercial and industrial — — — — 486 486 0.37 — — — — 678 678 0.05 Consumer loans: Home equity — — — — — — — Other — — — — — — — — — — — — — — Total $ — $ — $ — $ 623 $ 9,523 $ 10,146 0.13 Financial effect of loan modifications - The loan modifications during the three months and nine months ended June 30, 2024 were term extensions or a combination of term extensions and payment delays. The table below presents the financial effects of loan modifications during the three and nine months ended June 30, 2024. For the Three Months Ended June 30, 2024 For the Nine Months Ended June 30, 2024 Term Payment Term Payment Extension Delays Extension Delays One- to four-family: Originated 20 months 8 months 31 months 4 months Correspondent N/A N/A 17 months 4 months Commercial: Commercial real estate N/A N/A 24 months 24 months Commercial and industrial 9 months 6 months 6 months 6 months Performance of loan modifications - The following table provides information about the subsequent performance during the nine months ended June 30, 2024 of loans modified for borrowers experiencing financial difficulty. 30 to 89 Days 90 or More Days Total Current Total (in thousands) One- to four-family: Originated $ 1,847 $ 205 $ 2,052 $ 5,685 $ 7,737 Correspondent 182 — 182 1,549 1,731 Commercial: Commercial real estate 50 — 50 142 192 Commercial & industrial — — — 486 486 $ 2,079 $ 205 $ 2,284 $ 7,862 $ 10,146 TDRs - Prior to the adoption of ASU 2022-02 on October 1, 2023, loans were accounted for as TDRs if the Bank granted a concession to a borrower experiencing financial difficulties. The following table presents the amortized cost prior to restructuring and immediately after restructuring in all loans restructured during the periods presented. For the Three Months Ended For the Nine Months Ended June 30, 2023 June 30, 2023 Number Pre- Post- Number Pre- Post- of Restructured Restructured of Restructured Restructured Contracts Outstanding Outstanding Contracts Outstanding Outstanding (Dollars in thousands) One- to four-family: Originated 1 $ 110 $ 110 1 $ 110 $ 110 Bulk purchased — — — 1 239 257 Home equity 1 38 38 1 38 38 2 $ 148 $ 148 3 $ 387 $ 405 During the three months ended June 30, 2023, there were no TDRs that became delinquent within 12 months after being restructured. During the nine months ended June 30, 2023 there was one one- to four-family originated TDR with an amortized cost of $8 thousand that became delinquent within 12 months after being restructured. Allowance for Credit Losses - The following is a summary of ACL activity, by loan portfolio segment, for the periods presented. For the Three Months Ended June 30, 2024 One- to Four-Family Correspondent Bulk Originated Purchased Purchased Total Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,072 $ 2,793 $ 195 $ 5,060 $ 19,330 $ 244 $ 24,634 Charge-offs — — — — (50) (26) (76) Recoveries 17 — — 17 2 — 19 Provision for credit losses (79) (163) (29) (271) 1,514 34 1,277 Ending balance $ 2,010 $ 2,630 $ 166 $ 4,806 $ 20,796 $ 252 $ 25,854 For the Nine Months Ended June 30, 2024 One- to Four-Family Correspondent Bulk Originated Purchased Purchased Total Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,149 $ 2,972 $ 207 $ 5,328 $ 18,180 $ 251 $ 23,759 Adoption of ASU 2022-02 3 1 14 18 2 — 20 Balance at October 1, 2023 2,152 2,973 221 5,346 18,182 251 23,779 Charge-offs — — — — (60) (41) (101) Recoveries 25 — — 25 3 15 43 Provision for credit losses (167) (343) (55) (565) 2,671 27 2,133 Ending balance $ 2,010 $ 2,630 $ 166 $ 4,806 $ 20,796 $ 252 $ 25,854 For the Three Months Ended June 30, 2023 One- to Four-Family Correspondent Bulk Originated Purchased Purchased Total Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,139 $ 3,074 $ 221 $ 5,434 $ 14,222 $ 233 $ 19,889 Charge-offs — — — — — (11) (11) Recoveries 1 — — 1 — — 1 Provision for credit losses 15 7 18 40 2,463 17 2,520 Ending balance $ 2,155 $ 3,081 $ 239 $ 5,475 $ 16,685 $ 239 $ 22,399 For the Nine Months Ended June 30, 2023 One- to Four-Family Correspondent Bulk Originated Purchased Purchased Total Commercial Consumer Total (Dollars in thousands) Beginning balance $ 2,066 $ 2,734 $ 206 $ 5,006 $ 11,120 $ 245 $ 16,371 Charge-offs — — — — — (31) (31) Recoveries 2 — — 2 1 2 5 Provision for credit losses 87 347 33 467 5,564 23 6,054 Ending balance $ 2,155 $ 3,081 $ 239 $ 5,475 $ 16,685 $ 239 $ 22,399 The key assumptions in the Company's ACL model include the economic forecast, the forecast and reversion to mean time periods, and prepayment and curtailment assumptions. Management also considered certain qualitative factors when evaluating the adequacy of the ACL at June 30, 2024. The key assumptions utilized in estimating the Company's ACL at June 30, 2024 are discussed below. • Economic Forecast - Management considered several economic forecasts provided by a third party and selected an economic forecast that was the most appropriate considering the facts and circumstances at June 30, 2024. The forecasted economic indices applied to the model at June 30, 2024 were the national unemployment rate, changes in commercial real estate price index, changes in home values, and changes in the U.S. gross domestic product. The economic index most impactful to all loan pools within the model at June 30, 2024 was the national unemployment rate. The forecasted national unemployment rate in the economic scenario selected by management at June 30, 2024 had the national unemployment rate at 4.1% through June 30, 2025, which was the end of our four-quarter forecast time period. • Forecast and reversion to mean time periods - The forecasted time period and the reversion to mean time period were each four quarters for all of the economic indices at June 30, 2024. • Prepayment and curtailment assumptions - The assumptions used at June 30, 2024 were generally based on actual historical prepayment and curtailment speeds, adjusted by management as deemed necessary. The prepayment and curtailment assumptions vary for each respective loan pool in the model. • Qualitative factors - The qualitative factors applied by management at June 30, 2024 included the following: ◦ The economic uncertainties related to the unemployment rate, the labor force composition, and the labor participation rate that are not captured in the third-party economic forecast scenarios; and ◦ Other management considerations related to commercial loans to account for credit risks not fully reflected in the discounted cash flow model. Reserve for Off-Balance Sheet Credit Exposures - The following is a summary of the changes in reserve for off-balance sheet credit exposures during the periods indicated. At June 30, 2024 and September 30, 2023, the Bank's off-balance sheet credit exposures totaled $754.6 million and $837.7 million, respectively. For the Three Months Ended For the Nine Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (Dollars in thousands) Beginning balance $ 3,679 $ 5,768 $ 4,095 $ 4,751 Adoption of ASU 2022-02 — — 16 — (Release)/provision for credit losses 195 (1,196) (237) (179) Ending balance $ 3,874 $ 4,572 $ 3,874 $ 4,572 |
