| 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: December 31, 2024 September 30, 2024 (Dollars in thousands) One- to four-family: Originated $ 3,907,809 $ 3,941,952 Correspondent purchased 2,163,847 2,212,587 Bulk purchased 123,029 127,161 Construction 19,165 22,970 Total 6,213,850 6,304,670 Commercial: Commercial real estate 1,353,482 1,191,624 Commercial and industrial 131,267 129,678 Construction 161,744 187,676 Total 1,646,493 1,508,978 Consumer: Home equity 103,006 99,988 Other 9,680 9,615 Total 112,686 109,603 Total loans receivable 7,973,029 7,923,251 Less: ACL 24,997 23,035 Deferred loan fees/discounts 30,973 30,336 Premiums/deferred costs (36,497) (37,458) $ 7,953,556 $ 7,907,338 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 prior fiscal year, 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 was performed by the Bank's underwriters on a loan-by-loan basis. 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 loan portfolio includes loans 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 loan portfolio has a 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 low LTV ratio, the Bank may allow the guaranty percentage to be reduced or phased out, or the Bank may originate the loan 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 low LTV ratio, 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 longer-term assets. In general, commercial and industrial loans involve different types of credit risk than commercial real estate loans due to the nature of the loans and the type of collateral securing the loans. As a result of these complexities, variables and risks, commercial and industrial loans generally require evaluation of different metrics and factors before origination and require more monitoring and servicing after origination than other types of loans. Management regularly monitors the level of risk in the entire commercial loan portfolio, including concentrations in factors such as geographic locations, collateral types, tenant brand name, borrowing relationships, and, in the case of participation loans, lending relationships, 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. Amortized cost is the amount of unpaid principal, net of undisbursed loan funds, unamortized premiums and discounts, and deferred fees and costs. 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 December 31, 2024 and September 30, 2024, there were no loans classified as doubtful, and all loans classified as loss were fully charged-off. December 31, 2024 Revolving Line of Current Fiscal Fiscal Fiscal Fiscal Revolving Credit Fiscal Year Year Year Year Prior Line of Converted Year 2024 2023 2022 2021 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Pass $ 65,851 $ 238,219 $ 320,185 $ 566,865 $ 790,632 $ 1,908,902 $ — $ — $ 3,890,654 Special Mention — — 294 878 1,217 7,490 — — 9,879 Substandard — — 655 — 215 10,917 — — 11,787 Correspondent purchased Pass — 792 319,111 472,497 563,020 824,327 — — 2,179,747 Special Mention — — 989 — 651 962 — — 2,602 Substandard — — — 1,821 265 5,169 — — 7,255 Bulk purchased Pass — — — — — 120,229 — — 120,229 Special Mention — — — — — — — — — Substandard — — — — — 3,213 — — 3,213 65,851 239,011 641,234 1,042,061 1,356,000 2,881,209 — — 6,225,366 Commercial: Commercial real estate Pass 171,333 319,944 392,963 283,997 122,490 153,445 7,418 — 1,451,590 Special Mention — 12,373 2,524 — — 174 35 — 15,106 Substandard — 142 39,922 — 3 2,132 50 — 42,249 Commercial and industrial Pass 8,969 40,005 30,227 16,161 6,995 2,789 23,893 — 129,039 Special Mention — 396 — 65 296 3 1,035 — 1,795 Substandard — 227 — 125 — 82 1 — 435 180,302 373,087 465,636 300,348 129,784 158,625 32,432 — 1,640,214 Consumer: Home equity Pass 1,739 6,886 4,219 4,356 1,391 2,698 75,500 5,896 102,685 Special Mention — — 20 — — — — 199 219 Substandard — — — — — 81 246 62 389 Other Pass 1,859 3,187 2,245 1,377 336 127 426 — 9,557 Special Mention — — — — — — — — — Substandard — 46 18 56 — 2 1 — 123 3,598 10,119 6,502 5,789 1,727 2,908 76,173 6,157 112,973 Total $ 249,751 $ 622,217 $ 1,113,372 $ 1,348,198 $ 1,487,511 $ 3,042,742 $ 108,605 $ 6,157 $ 7,978,553 September 30, 2024 Revolving Line of Fiscal Fiscal Fiscal Fiscal Fiscal Revolving Credit Year Year Year Year Year Prior Line of Converted 2024 2023 2022 2021 2020 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Pass $ 241,765 $ 325,492 $ 578,275 $ 809,643 $ 521,647 $ 1,447,237 $ — $ — $ 3,924,059 Special Mention — 295 1,229 1,982 772 9,565 — — 13,843 Substandard — 658 49 468 1,398 9,571 — — 12,144 Correspondent purchased Pass 798 325,384 482,103 570,970 225,650 623,496 — — 2,228,401 Special Mention — 993 659 658 398 977 — — 3,685 Substandard — — 1,662 265 — 5,130 — — 7,057 Bulk purchased Pass — — — — — 124,076 — — 124,076 Special Mention — — — — — — — — — Substandard — — — — — 3,514 — — 3,514 242,563 652,822 1,063,977 1,383,986 749,865 2,223,566 — — 6,316,779 Commercial: Commercial real estate Pass 326,158 400,649 284,493 135,935 74,174 110,309 23,865 — 1,355,583 Special Mention 12,440 2,543 — — 92 1,094 — — 16,169 Substandard 142 827 — — 647 636 50 — 2,302 Commercial and industrial Pass 46,335 32,112 18,131 8,075 1,350 2,051 20,876 — 128,930 Special Mention 401 — — — — — 12 — 413 Substandard 227 — — — — 82 26 — 335 385,703 436,131 302,624 144,010 76,263 114,172 44,829 — 1,503,732 Consumer: Home equity Pass 7,331 4,377 4,575 1,437 814 2,127 73,020 5,895 99,576 Special Mention — — — — — — 45 281 326 Substandard — 20 — — — 24 120 181 345 Other Pass 4,112 2,737 1,697 385 101 95 346 — 9,473 Special Mention — — — — — — — — — Substandard 80 14 44 — 4 — — — 142 11,523 7,148 6,316 1,822 919 2,246 73,531 6,357 109,862 Total $ 639,789 $ 1,096,101 $ 1,372,917 $ 1,529,818 $ 827,047 $ 2,339,984 $ 118,360 $ 6,357 $ 7,930,373 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. December 31, 2024 Revolving Line of Current Fiscal Fiscal Fiscal Fiscal Revolving Credit Fiscal Year Year Year Year Prior Line of Converted Year 2024 2023 2022 2021 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Current $ 65,851 $ 238,219 $ 320,964 $ 566,714 $ 791,549 $ 1,916,943 $ — $ — $ 3,900,240 30-89 — — — 1,029 515 8,202 — — 9,746 90+/FC — — 170 — — 2,164 — — 2,334 Correspondent purchased Current — 792 319,825 472,738 563,043 826,288 — — 2,182,686 30-89 — — 275 — 628 2,109 — — 3,012 90+/FC — — — 1,580 265 2,061 — — 3,906 Bulk purchased Current — — — — — 122,148 — — 122,148 30-89 — — — — — 33 — — 33 90+/FC — — — — — 1,261 — — 1,261 65,851 239,011 641,234 1,042,061 1,356,000 2,881,209 — — 6,225,366 Commercial: Commercial real estate Current 171,333 332,317 434,444 268,598 122,383 152,079 7,453 — 1,488,607 30-89 — — 158 15,399 110 2,632 — — 18,299 90+/FC — 142 807 — — 1,040 50 — 2,039 Commercial and industrial Current 8,969 40,402 30,227 16,226 7,291 2,792 24,929 — 130,836 30-89 — — — 125 — — — — 125 90+/FC — 226 — — — 82 — — 308 180,302 373,087 465,636 300,348 129,784 158,625 32,432 — 1,640,214 Consumer: Home equity Current 1,739 6,886 4,239 4,322 1,391 2,631 75,236 6,000 102,444 30-89 — — — 34 — 73 354 114 575 90+/FC — — — — — 75 156 43 274 Other Current 1,821 3,189 2,245 1,408 278 126 426 — 9,493 30-89 38 — — 8 58 1 — — 105 90+/FC — 44 18 17 — 2 1 — 82 3,598 10,119 6,502 5,789 1,727 2,908 76,173 6,157 112,973 Total $ 249,751 $ 622,217 $ 1,113,372 $ 1,348,198 $ 1,487,511 $ 3,042,742 $ 108,605 $ 6,157 $ 7,978,553 September 30, 2024 Revolving Line of Fiscal Fiscal Fiscal Fiscal Fiscal Revolving Credit Year Year Year Year Year Prior Line of Converted 2024 2023 2022 2021 2020 Years Credit to Term Total (Dollars in thousands) One- to four-family: Originated Current $ 241,765 $ 326,211 $ 578,430 $ 811,455 $ 521,550 $ 1,459,500 $ — $ — $ 3,938,911 30-89 — 64 1,074 638 1,666 5,422 — — 8,864 90+/FC — 170 49 — 601 1,451 — — 2,271 Correspondent purchased Current 798 326,377 482,598 571,182 226,048 624,961 — — 2,231,964 30-89 — — 164 446 — 2,479 — — 3,089 90+/FC — — 1,662 265 — 2,163 — — 4,090 Bulk purchased Current — — — — — 125,982 — — 125,982 30-89 — — — — — 69 — — 69 90+/FC — — — — — 1,539 — — 1,539 242,563 652,822 1,063,977 1,383,986 749,865 2,223,566 — — 6,316,779 Commercial: Commercial real estate Current 338,511 403,193 284,493 135,932 74,266 110,448 23,055 — 1,369,898 30-89 229 807 — 3 — 1,094 860 — 2,993 90+/FC — 19 — — 647 497 — — 1,163 Commercial and industrial Current 46,736 32,112 17,990 8,052 1,350 2,051 20,914 — 129,205 30-89 227 — 141 23 — — — — 391 90+/FC — — — — — 82 — — 82 385,703 436,131 302,624 144,010 76,263 114,172 44,829 — 1,503,732 Consumer: Home equity Current 7,331 4,378 4,540 1,437 814 2,133 72,721 6,084 99,438 30-89 — — 35 — — — 349 87 471 90+/FC — 19 — — — 18 115 186 338 Other Current 4,109 2,728 1,641 327 101 95 344 — 9,345 30-89 3 9 100 58 — — 2 — 172 90+/FC 80 14 — — 4 — — — 98 11,523 7,148 6,316 1,822 919 2,246 73,531 6,357 109,862 Total $ 639,789 $ 1,096,101 $ 1,372,917 $ 1,529,818 $ 827,047 $ 2,339,984 $ 118,360 $ 6,357 $ 7,930,373 Gross Charge-Offs - The following tables present gross charge-offs, for the periods indicated, by class of financing receivable for the year of origination or most recent credit decision. For the Three Months Ended December 31, 2024 Revolving Lines Current Fiscal Fiscal Fiscal Fiscal Revolving of Credit Fiscal Year Year Year Year Prior Lines of Converted to Year 2024 2023 2022 2021 Years Credit Term Total (Dollars in thousands) One- to four-family: Originated $ — $ — $ — $ — $ — $ — $ — $ — $ — Correspondent purchased — — — — — — — — — Bulk purchased — — — — — — — — — — — — — — — — — — Commercial: Commercial real estate — — — — — — — — — Commercial and Industrial — — — — — — — — — — — — — — — — — — Consumer: Home Equity 5 11 — — — — — — 16 Other — 1 — — — — — — 1 5 12 — — — — — — 17 Total $ 5 $ 12 $ — $ — $ — $ — $ — $ — $ 17 For the Three Months Ended December 31, 2023 Revolving Lines Fiscal Fiscal Fiscal Fiscal Fiscal Revolving of Credit Year Year Year Year Year Prior Lines of Converted to 2024 2023 2022 2021 2020 Years Credit Term Total (Dollars in thousands) One- to four-family: Originated $ — $ — $ — $ — $ — $ — $ — $ — $ — Correspondent purchased — — — — — — — — — Bulk purchased — — — — — — — — — — — — — — — — — — Commercial: Commercial real estate — — — — — — — — — Commercial and Industrial — — — — — — — — — — — — — — — — — — Consumer: Home Equity 1 1 — — — — — — 2 Other — 5 — — — — — — 5 1 6 — — — — — — 7 Total $ 1 $ 6 $ — $ — $ — $ — $ — $ — $ 7 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 December 31, 2024 and September 30, 2024, all loans 90 or more days delinquent were on nonaccrual status. The increase in the 30 to 89 days delinquent commercial real estate loan balance from September 30, 2024 was due primarily to one Community Reinvestment Act loan. The borrower is in the process of obtaining tax credit funding, which will service the loan until the project is stabilized. The tax credit funding is anticipated to be received by the borrower during the quarter ended March 31, 2025. December 31, 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 $ 9,746 $ 2,334 $ 12,080 $ 3,900,240 $ 3,912,320 Correspondent purchased 3,012 3,906 6,918 2,182,686 2,189,604 Bulk purchased 33 1,261 1,294 122,148 123,442 Commercial: Commercial real estate 18,299 2,039 20,338 1,488,607 1,508,945 Commercial and industrial 125 308 433 130,836 131,269 Consumer: Home equity 575 274 849 102,444 103,293 Other 105 82 187 9,493 9,680 $ 31,895 $ 10,204 $ 42,099 $ 7,936,454 $ 7,978,553 September 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 $ 8,864 $ 2,271 $ 11,135 $ 3,938,911 $ 3,950,046 Correspondent purchased 3,089 4,090 7,179 2,231,964 2,239,143 Bulk purchased 69 1,539 1,608 125,982 127,590 Commercial: Commercial real estate 2,993 1,163 4,156 1,369,898 1,374,054 Commercial and industrial 391 82 473 129,205 129,678 Consumer: Home equity 471 338 809 99,438 100,247 Other 172 98 270 9,345 9,615 $ 16,049 $ 9,581 $ 25,630 $ 7,904,743 $ 7,930,373 The amortized cost of mortgage loans secured by residential real estate for which formal foreclosure proceedings were in process as of December 31, 2024 and September 30, 2024 was $1.9 million and $1.6 million, respectively, which are 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 $55 thousand at September 30, 2024. There was no residential OREO held at December 31, 2024. The following table presents the amortized cost at December 31, 2024 and September 30, 2024, by class, of loans classified as nonaccrual. Nonaccrual loans with no ACL were individually evaluated for loss and any losses have been charged off. December 31, 2024 September 30, 2024 Nonaccrual Loans Nonaccrual Loans with No ACL Nonaccrual Loans Nonaccrual Loans with No ACL (Dollars in thousands) One- to four-family: Originated $ 2,334 $ 1,232 $ 2,271 $ 764 Correspondent purchased 3,906 243 4,090 182 Bulk purchased 1,261 807 1,539 812 Commercial: Commercial real estate 3,134 2,540 1,495 901 Commercial and industrial 435 435 335 335 Consumer: Home equity 274 — 338 — Other 82 14 98 16 $ 11,426 $ 5,271 $ 10,166 $ 3,010 Loan Modifications - The following tables present the amortized cost basis of loans, as of the dates indicated, 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, at the dates indicated, that were modified to borrowers experiencing financial difficulties as compared to the amortized cost basis of each class of financing receivable during the periods noted. During the three months ended December 31, 2024 and 2023, there were no charge-offs related to loans modified during those periods. The Company has not committed to lend additional amounts to borrowers included in these tables. For the Three Months Ended December 31, 2024 Term Extension Total and Class of Payment Term Payment Financing Delay Extension Delay Total Receivable (Dollars in thousands) One- to four-family: Originated $ 342 $ 917 $ 166 $ 1,425 0.04 % Correspondent — — — — — Bulk purchased — — — — — 342 917 166 1,425 0.02 Commercial: Commercial real estate 55 35 — 90 0.01 Commercial and industrial — 19 — 19 0.01 55 54 — 109 0.01 Consumer loans: Home equity 20 — — 20 0.02 Other — — — — — 20 — — 20 0.02 Total $ 417 $ 971 $ 166 $ 1,554 0.02 For the Three Months Ended December 31, 2023 Term Extension Total and Class of Payment Financing Delay Total Receivable (Dollars in thousands) One- to four-family: Originated $ 4,405 $ 4,405 0.11 % Correspondent 1,247 1,247 0.05 Bulk purchased — — — 5,652 5,652 0.09 Commercial: Commercial real estate — — — Commercial and industrial — — — — — — Consumer loans: Home equity — — — Other — — — — — — Total $ 5,652 $ 5,652 0.07 Financial effect of loan modifications - The table below presents the financial effects of loan modifications during the three months ended December 31, 2024 and 2023, including the weighted average payment delay and weighted average term extension. For the Three Months Ended December 31, 2024 December 31, 2023 Payment Term Payment Term Delay Extension Delay Extension One- to four-family: Originated 8 months 15 months 4 months 23 months Correspondent N/A N/A 4 months 12 months Bulk purchased N/A N/A N/A N/A Commercial: Commercial real estate 6 months 3 months N/A N/A Commercial and industrial N/A 6 months N/A N/A Consumer: Consumer home equity 7 months N/A N/A N/A Consumer other N/A N/A N/A N/A Performance of loan modifications - The following tables provide information about the subsequent performance of loans modified for borrowers experiencing financial difficulty during the periods noted. For the Three Months Ended December 31, 2024 30 to 89 Days 90 or More Days Total Current Total (Dollars in thousands) One- to four-family: Originated $ 719 $ — $ 719 $ 706 $ 1,425 Correspondent — — — — — Bulk purchased — — — — — Commercial: Commercial real estate — — — 90 90 Commercial & industrial — — — 19 19 Consumer loans: Home equity — — — 20 20 Other — — — — — $ 719 $ — $ 719 $ 835 $ 1,554 For the Three Months Ended December 31, 2023 30 to 89 Days 90 or More Days Total Current Total (Dollars in thousands) One- to four-family: Originated $ 231 $ — $ 231 $ 4,174 $ 4,405 Correspondent — — — 1,247 1,247 Bulk purchased — — — — — Commercial: Commercial real estate — — — — — Commercial & industrial — — — — — Consumer loans: Home equity — — — — — Other — — — — — $ 231 $ — $ 231 $ 5,421 $ 5,652 Allowance for Credit Losses - The following tables summarizes ACL activity, by loan portfolio segment, for the periods presented. For the Three Months Ended December 31, 2024 One- to Four-Family Correspondent Bulk Originated Purchased Purchased Total Commercial Consumer Total (Dollars in thousands) Beginning balance $ 1,666 $ 1,861 $ 146 $ 3,673 $ 19,154 $ 208 $ 23,035 Charge-offs — — — — — (17) (17) Recoveries 3 — — 3 20 1 24 Provision for credit losses 374 (278) (15) 81 1,825 49 1,955 Ending balance $ 2,043 $ 1,583 $ 131 $ 3,757 $ 20,999 $ 241 $ 24,997 For the Three Months Ended December 31, 2023 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 — — — — — (7) (7) Recoveries 5 — — 5 1 — 6 Provision for credit losses (63) (25) (15) (103) 495 8 400 Ending balance $ 2,094 $ 2,948 $ 206 $ 5,248 $ 18,678 $ 252 $ 24,178 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 December 31, 2024. The key assumptions utilized in estimating the Company's ACL at December 31, 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 December 31, 2024. The forecasted economic indices applied to the model at December 31, 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 December 31, 2024 was the national unemployment rate. The forecasted national unemployment rate in the economic scenario selected by management at December 31, 2024 had the national unemployment rate remaining at 4.1% through December 31, 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 December 31, 2024. • Prepayment and curtailment assumptions - The assumptions used at December 31, 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 - Management applied qualitative factors at December 31, 2024 to account for large dollar commercial loan concentrations and potential risk of loss in market value for newer one- to four-family loans. These qualitative factors were applied to account for credit risks not fully reflected in the discounted cash flow model. ◦ The Company's commercial real estate and construction loans generally have low LTV ratios and strong DSCRs which serve as indicators that losses in the commercial real estate and construction loan portfolios might be unlikely; however, because there is uncertainty surrounding the nature, timing and amount of expected losses, management believes that in the event of a realized loss within the large dollar commercial loan pools, the magnitude of such a loss is likely to be significant. The large dollar commercial loan concentration qualitative factor addresses the risk associated with a large dollar relationship deteriorating due to a loss event. As part of its analysis, management considered external data including historical loss information for the industry and commercial real estate price index trending information from a variety of reputable sources to help determine the amount of this qualitative factor. ◦ For one- to four-family loans, management believes there is potential risk of loss in market value for newer originations and developed a qualitative factor to account for this risk. To determine the appropriate amount of the one- to four-family loan qualitative factor as of December 31, 2024, management considered external historical home price index trending information, along with the Bank's recent origination/purchase activity, historical loan loss experience and the current trend of this portfolio balance, the one-to four-family loan portfolio composition with regard to loan size, and management's knowledge of the Bank's loan portfolio and the one- to four-family lending industry. Reserve for Off-Balance Sheet Credit Exposures - At December 31, 2024 and September 30, 2024, the Bank's off-balance sheet credit exposures totaled $723.3 million and $826.5 million, respectively. The following table summarizes the change in reserve for off-balance sheet credit exposures during the periods indicated. The provision release for the three months ended December 31, 2024 was due primarily to a decrease in the balance of commercial off-balance sheet credit exposures during the quarter. The increase in the reserve for off-balance sheet credit exposures as of December 31, 2024 compared to December 31, 2023 was due to an increase in the ACL to loan ratio, specifically for commercial construction loans, partially offset by a decrease in the balance of commercial off-balance sheet credit exposures. For the Three Months Ended December 31, 2024 December 31, 2023 (Dollars in thousands) Beginning balance $ 6,003 $ 4,095 Adoption of ASU 2022-02 — 16 Provision for credit losses (1,278) (277) Ending balance $ 4,725 $ 3,834 |
