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Loans Receivable and Allowance for Loan Losses (Tables)

12 Months Ended

Sep. 30, 2022

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

Schedule of Loans Receivable and Loans Held for Sale

Loans receivable by portfolio segment consisted of the following at September 30, 2022 and 2021 (dollars in thousands):


	2022		2021
Mortgage loans:
One- to four-family	$	176,116	$	119,935
Multi-family	95,025		87,563
Commercial	536,650		470,650
Construction – custom and owner/builder	119,240		109,152
Construction – speculative one- to four-family	12,254		17,813
Construction – commercial	40,364		43,365
Construction – multi-family	64,480		52,071
Construction – land development	19,280		10,804
Land	26,854		19,936
Total mortgage loans	1,090,263		931,289
Consumer loans:
Home equity and second mortgage	35,187		32,988
Other	2,128		2,512
Total consumer loans	37,315		35,500

Commercial loans:
Commercial business	125,039		74,579
SBA Paycheck Protection Program ("PPP")	1,001		40,922
Total commercial loans	126,040		115,501
Total loans receivable	1,253,618		1,082,290
Less:
Undisbursed portion of construction loans in process	103,168		95,224
Deferred loan origination fees, net	4,321		5,143
Allowance for loan losses	13,703		13,469
	121,192		113,836
Loans receivable, net	$	1,132,426	$	968,454

Schedule of Activity in Related Party Loans

Activity in related party loans during the years ended September 30, 2022, 2021 and 2020 was as follows (dollars in thousands):


	2022		2021		2020
Balance, beginning of year	$	466	$	248	$	94
New loans or borrowings	40		316		178
Repayments and reclassifications	(456)		(98)		(24)
Balance, end of year	$	50	$	466	$	248

Schedule of Allowance for Loan Losses

The following table sets forth information for the year ended September 30, 2022 regarding activity in the allowance for loan losses by portfolio segment (dollars in thousands):


	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	1,154	$	504	$	—	$	—	$	1,658
Multi-family	765		90		—		—		855
Commercial	6,813		(131)		—		—		6,682
Construction – custom and owner/builder	644		31		—		—		675
Construction – speculative one- to four-family	188		(58)		—		—		130
Construction – commercial	784		(441)		—		—		343
Construction – multi-family	436		11		—		—		447
Construction – land development	124		109		—		—		233
Land	470		(73)		—		—		397
Consumer loans:
Home equity and second mortgage	528		(88)		—		—		440
Other	50		1		(10)		1		42
Commercial business loans	1,513		315		(49)		22		1,801
Total	$	13,469	$	270	$	(59)	$	23	$	13,703

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


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

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


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

Schedule of Loans Evaluated Individually for Impairment and Collectively Evaluated for Impairment in the Allowance for Loan Losses

The following table presents information on loans evaluated individually and collectively for impairment in the allowance for loan losses by portfolio segment at September 30, 2022 (dollars in thousands):


	Allowance for Loan Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Mortgage loans:
One- to four-family	$	—	$	1,658	$	1,658	$	388	$	175,728	$	176,116
Multi-family	—		855		855		—		95,025		95,025
Commercial	—		6,682		6,682		2,988		533,662		536,650
Construction – custom and owner/ builder	—		675		675		—		67,091		67,091
Construction – speculative one- to four-family	—		130		130		—		8,364		8,364
Construction – commercial	—		343		343		—		29,059		29,059
Construction – multi-family	—		447		447		—		34,354		34,354
Construction – land development	—		233		233		—		13,582		13,582
Land	—		397		397		450		26,404		26,854
Consumer loans:
Home equity and second mortgage	—		440		440		394		34,793		35,187
Other	—		42		42		3		2,125		2,128
Commercial business loans	127		1,674		1,801		309		124,730		125,039
SBA PPP loans	—		—		—		—		1,001		1,001
Total	$	127	$	13,576	$	13,703	$	4,532	$	1,145,918	$	1,150,450


	Allowance for Loan Losses						Recorded Investment in Loans
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total		Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Total
Mortgage loans:
One- to four-family	$	—	$	1,154	$	1,154	$	407	$	119,528	$	119,935
Multi-family	—		765		765		—		87,563		87,563
Commercial	—		6,813		6,813		3,143		467,507		470,650
Construction – custom and owner/ builder	—		644		644		—		61,003		61,003
Construction – speculative one- to four-family	—		188		188		—		9,657		9,657
Construction – commercial	—		784		784		—		38,931		38,931
Construction – multi-family	—		436		436		—		22,888		22,888
Construction – land development	—		124		124		—		5,502		5,502
Land	76		394		470		683		19,253		19,936
Consumer loans:
Home equity and second mortgage	—		528		528		516		32,472		32,988
Other	—		50		50		17		2,495		2,512
Commercial business loans	171		1,342		1,513		458		74,121		74,579
SBA PPP loans	—		—		—		—		40,922		40,922
Total	$	247	$	13,222	$	13,469	$	5,224	$	981,842	$	987,066

Past Due Status of Loans Receivable

The following table presents an analysis of loans by aging category and portfolio segment at September 30, 2022 (dollars in thousands):


	30-59 Days Past Due		60-89 Days Past Due		Non- Accrual(1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
Mortgage loans:
One- to four-family	$	—	$	—	$	388	$	—	$	388	$	175,728	$	176,116
Multi-family	—		—		—		—		—		95,025		95,025
Commercial	—		—		657		—		657		535,993		536,650
Construction – custom and owner/ builder	—		—		—		—		—		67,091		67,091
Construction – speculative one- to four-family	—		—		—		—		—		8,364		8,364
Construction – commercial	—		—		—		—		—		29,059		29,059
Construction – multi-family	—		—		—		—		—		34,354		34,354
Construction – land development	—		—		—		—		—		13,582		13,582
Land	—		—		450		—		450		26,404		26,854
Consumer loans:
Home equity and second mortgage	37		—		252		—		289		34,898		35,187
Other	—		—		3		—		3		2,125		2,128
Commercial business loans	—		—		309		—		309		124,730		125,039
SBA PPP loans	—		—		—		—		—		1,001		1,001
Total	$	37	$	—	$	2,059	$	—	$	2,096	$	1,148,354	$	1,150,450

__________________

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

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


	30-59 Days Past Due		60-89 Days Past Due		Non- Accrual(1)		Past Due 90 Days or More and Still Accruing		Total Past Due		Current		Total Loans
Mortgage loans:
One- to four-family	$	—	$	180	$	407	$	—	$	587	$	119,348	$	119,935
Multi-family	—		—		—		—		—		87,563		87,563
Commercial	—		—		773		—		773		469,877		470,650
Construction – custom and owner/ builder	—		—		—		—		—		61,003		61,003
Construction – speculative one- to four-family	—		—		—		—		—		9,657		9,657
Construction – commercial	—		—		—		—		—		38,931		38,931
Construction – multi-family	—		—		—		—		—		22,888		22,888
Construction – land development	—		—		—		—		—		5,502		5,502
Land	—		—		683		—		683		19,253		19,936
Consumer loans:
Home equity and second mortgage	—		—		516		—		516		32,472		32,988
Other	—		—		17		—		17		2,495		2,512
Commercial business loans	5		—		458		—		463		74,116		74,579
SBA PPP loans	—		—		—		—		—		40,922		40,922
Total	$	5	$	180	$	2,854	$	—	$	3,039	$	984,027	$	987,066

___________________

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

Financing Receivable Credit Quality Indicators

The following table presents an analysis of loans by credit quality indicator and portfolio segment at September 30, 2022 (dollars in thousands):


	Loan Grades
	Pass		Watch		Special Mention		Substandard		Total
Mortgage loans:
One- to four-family	$	175,687	$	38	$	—	$	391	$	176,116
Multi-family	95,025		—		—		—		95,025
Commercial	522,741		7,940		237		5,732		536,650
Construction – custom and owner / builder	65,249		1,842		—		—		67,091
Construction – speculative one- to four-family	8,364		—		—		—		8,364
Construction – commercial	29,059		—		—		—		29,059
Construction – multi-family	34,354		—		—		—		34,354
Construction – land development	13,557		—		—		25		13,582
Land	25,882		522		—		450		26,854
Consumer loans:
Home equity and second mortgage	34,709		19		—		459		35,187
Other	2,063		62		—		3		2,128
Commercial business loans	124,712		—		—		327		125,039
SBA PPP loans	1,001		—		—		—		1,001
Total	$	1,132,403	$	10,423	$	237	$	7,387	$	1,150,450

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


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

Impaired Financing Receivables

The following table is a summary of information related to impaired loans by portfolio segment as of and for the year ended September 30, 2022 (dollars in thousands):


	September 30, 2022						For the Year Ended September 30, 2022
	Recorded Investment		Unpaid Principal Balance (Loan Balance Plus Charge Off)		Related Allowance		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Income Recognized
With no related allowance recorded:
Mortgage loans:
One- to four-family	$	388	$	432	$	—	$	470	$	31	$	31

Commercial	2,988		2,988		—		3,041		152		123




Land	450		450		—		492		—		—
Consumer loans:
Home equity and second mortgage	394		394		—		436		6		5
Other	3		3		—		7		—		—
Commercial business loans	59		108		—		121		—		—
Subtotal	4,282		4,375		—		4,567		189		159
With an allowance recorded:









Consumer loans:
Home equity and second mortgage	—		—		—		145		—		—

Commercial business loans	250		250		127		268		—		—
Subtotal	250		250		127		413		—		—
Total:
Mortgage loans:
One- to four-family	388		432		—		470		31		31

Commercial	2,988		2,988		—		3,041		152		123




Land	450		450		—		492		—		—
Consumer loans:
Home equity and second mortgage	394		394		—		581		6		5
Other	3		3		—		7		—		—
Commercial business loans	309		358		127		389		—		—
Total	$	4,532	$	4,625	$	127	$	4,980	$	189	$	159

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


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

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




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






Land	362		362		76		72		—		—
Consumer loans:


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

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




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

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


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

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





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






Land	—		—		—		110		—		—
Consumer loans:

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

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





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

Schedule Of COVID Loan Modifications

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


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












Total COVID-19 modifications	1	$	323	100.0	%

Schedule of Troubled Debt Restructuring Loans by Interest Accrual Status

The following tables set forth information with respect to the Company’s TDRs by interest accrual status as of September 30, 2022 and 2021 (dollars in thousands):


	2022
	Accruing		Non-Accrual		Total
Mortgage loans:


Commercial	$	2,330	$	—	$	2,330
Land	—		88		88
Consumer loans:
Home equity and second mortgage	142		55		197

Total	$	2,472	$	143	$	2,615


	2021
	Accruing		Non-Accrual		Total
Mortgage loans:


Commercial	$	2,371	$	—	$	2,371


Land	—		119		119
Consumer loans:
Home equity and second mortgage	—		63		63

Total	$	2,371	$	182	$	2,553

Troubled Debt Restructurings on Financing Receivables

The following table sets forth information with respect to the Company's TDRs, by portfolio segment, added during the year ended September 30, 2022:


2022	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		End of Period Balance
Home equity and second mortgage loans (1)	1	$	136	$	145	$	142

Total	1	$	136	$	145	$	142

(1) Modification resulted in an extension of maturity and deferral of accrued interest.