Loans Receivable

12 Months Ended

Sep. 30, 2018

Receivables [Abstract]

Loans Receivable

LOANS RECEIVABLE

The following table is a summary of loans receivable.

	September 30, 2018				September 30, 2017
	(In thousands)				(In thousands)
Gross loans by category
Single-family residential	$	5,798,966	45.1	%	$	5,711,004	46.8	%
Construction	1,890,668		14.7		1,597,996		13.1
Construction - custom	624,479		4.9		602,631		4.9
Land - acquisition & development	155,204		1.2		124,308		1.0
Land - consumer lot loans	102,036		0.8		104,405		0.9
Multi-family	1,385,125		10.8		1,303,148		10.7
Commercial real estate	1,452,168		11.3		1,434,610		11.8
Commercial & industrial	1,140,874		8.9		1,093,360		9.0
HELOC	130,852		1.0		144,850		1.2
Consumer	173,306		1.3		85,075		0.7
Total gross loans	12,853,678		100	%	12,201,387		100	%
Less:
Allowance for probable losses	129,257				123,073
Loans in process	1,195,506				1,149,934
Net deferred fees, costs and discounts	51,834				45,758
Total loan contra accounts	1,376,597				1,318,765
Net loans	$	11,477,081			$	10,882,622

The following summary breaks down the Company's fixed rate and adjustable rate loans by time to maturity or to rate adjustment.

September 30, 2018
Fixed-Rate					Adjustable-Rate
Term To Maturity	Gross Loans		% of Gross Loans		Term To Rate Adjustment	Gross Loans		% of Gross Loans
	(In thousands)					(In thousands)
Within 1 year	$	90,107	0.7	%	Less than 1 year	$	3,003,472	23.4	%
1 to 3 years	205,442		1.6		1 to 3 years	873,078		6.8
3 to 5 years	280,760		2.2		3 to 5 years	669,331		5.2
5 to 10 years	1,069,783		8.3		5 to 10 years	395,157		3.1
10 to 20 years	1,137,196		8.8		10 to 20 years	45,603		0.4
Over 20 years	5,061,088		39.4		Over 20 years	22,661		0.2
	$	7,844,376	61.0	%		$	5,009,302	39.0	%

The following tables provide information regarding loans receivable by loan category and geography.

September 30, 2018	Single - family residential		Multi- family		Land - A & D		Land - lot loans		Construction - custom		Construction		Commercial real estate		Commercial and industrial		Consumer		HELOC		Total
	(In thousands)
Washington	$	3,090,079	$	341,695	$	63,706	$	63,268	$	353,475	$	593,536	$	414,817	$	483,288	$	122,653	$	76,276	$	5,602,793
Oregon	678,072		376,679		31,143		13,773		68,897		390,169		283,945		251,028		1,622		12,156		2,107,484
Arizona	581,099		367,192		12,083		10,662		73,476		205,420		259,280		65,638		180		12,842		1,587,872
Utah	523,402		40,678		156		4,208		62,414		301,747		30,622		37,271		15		8,710		1,009,223
Texas	176,887		58,618		6,858		413		6,297		290,064		117,160		98,961		464		—		755,722
New Mexico	197,107		131,290		20,920		2,312		28,797		62,818		174,385		19,560		748		11,695		649,632
Idaho	311,613		42,509		20,338		4,429		24,514		42,554		91,202		37,327		103		7,160		581,749
Nevada	198,007		26,260		—		2,895		6,609		—		20,488		17,865		24		1,962		274,110
Other	42,700		204		—		76		—		4,360		60,269		129,936		47,497		51		285,093
	$	5,798,966	$	1,385,125	$	155,204	$	102,036	$	624,479	$	1,890,668	$	1,452,168	$	1,140,874	$	173,306	$	130,852	$	12,853,678

Percentage by geographic area
September 30, 2018	Single - family residential		Multi- family		Land - A & D		Land - lot loans		Construction - custom		Construction		Commercial real estate		Commercial and industrial		Consumer		HELOC		Total
	As % of total gross loans
Washington	24.1	%	2.7	%	0.4	%	0.6	%	2.8	%	4.7	%	3.2	%	3.7	%	0.9	%	0.5	%	43.6	%
Oregon	5.3		2.9		0.2		0.1		0.5		3.0		2.2		2.0		—		0.1		16.3
Arizona	4.5		2.9		0.1		0.1		0.6		1.6		2.0		0.5		—		0.1		12.4
Utah	4.1		0.3		—		—		0.5		2.3		0.2		0.3		—		0.1		7.8
Texas	1.4		0.5		0.1		—		—		2.3		0.9		0.8		—		—		6.0
New Mexico	1.5		1.0		0.2		—		0.2		0.5		1.4		0.2		—		0.1		5.1
Idaho	2.4		0.3		0.2		—		0.2		0.3		0.7		0.3		—		0.1		4.5
Nevada	1.5		0.2		—		—		0.1		—		0.2		0.1		—		—		2.1
Other	0.3		—		—		—		—		—		0.5		1.0		0.4		—		2.2
	45.1	%	10.8	%	1.2	%	0.8	%	4.9	%	14.7	%	11.3	%	8.9	%	1.3	%	1.0	%	100	%

Percentage by geographic area as a % of each loan type
September 30, 2018	Single - family residential		Multi- family		Land - A & D		Land - lot loans		Construction - custom		Construction		Commercial real estate		Commercial and industrial		Consumer		HELOC
	As % of total gross loans
Washington	53.3	%	24.7	%	41.0	%	62.0	%	56.6	%	31.4	%	28.6	%	42.4	%	70.8	%	58.3	%
Oregon	11.7		27.2		20.1		13.5		11.0		20.6		19.6		22.0		0.9		9.3
Arizona	10.0		26.5		7.8		10.4		11.8		10.9		17.9		5.8		0.1		9.8
Utah	9.0		2.9		0.1		4.1		10.0		16.0		2.1		3.3		—		6.7
Texas	3.1		4.2		4.4		0.4		1.0		15.3		8.1		8.7		0.3		—
New Mexico	3.4		9.5		13.5		2.3		4.6		3.3		12.0		1.7		0.4		8.9
Idaho	5.4		3.1		13.1		4.3		3.9		2.3		6.3		3.3		0.1		5.5
Nevada	3.4		1.9		—		2.8		1.1		—		1.4		1.6		—		1.5
Other	0.7		—		—		0.1		—		0.2		4.2		11.4		27.4		—
	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%	100	%

The Company has granted loans to officers and directors of the Company and related interests. These loans are made on the same terms,

including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans, including unfunded commitments to lend, was $70,012,000 and $84,166,000 at September 30, 2018 and 2017, respectively. As of September 30, 2018, all of these loans were performing in accordance with contractual terms.

The following table provides additional information on impaired loans, loan commitments and loans serviced for others.

	September 30, 2018		September 30, 2017
	(In thousands)
Recorded investment in impaired loans	$	199,545	$	251,274
TDRs included in impaired loans	156,858		207,377
Specific reserves on impaired loans	517		126
Average balance of impaired loans for year ended	228,398		274,530
Interest income from impaired loans for year ended	10,232		11,736
Outstanding fixed-rate origination commitments	400,426		425,130
Gross loans serviced for others	77,958		77,119

The following table sets forth information regarding non-accrual loans.

	September 30, 2018					September 30, 2017
	(In thousands)					(In thousands)
Non-accrual loans:
Single-family residential	$	27,643		49.6	%	$	27,930		56.3	%
Construction	2,427			4.4		—			—
Construction - custom	—			—		91			0.2
Land - acquisition & development	920			1.7		296			0.6
Land - consumer lot loans	787			1.4		605			1.2
Multi-family	—			—		139			0.3
Commercial real estate	8,971			16.1		11,815			23.8
Commercial & industrial	14,394			25.8		8,082			16.3
HELOC	523			0.9		531			1.1
Consumer	21			—		91			0.2
Total non-accrual loans	$	55,686		100	%	$	49,580		100	%
Non-accrual loans as % of total loans	0.49		%			0.46		%

The following tables break down delinquent loans by loan category and delinquency bucket.

September 30, 2018	Amount of Loans		Days Delinquent Based on $ Amount of Loans										% based on $
Loan type	Net of Loans in Process		Current		30		60		90		Total
	(In thousands)
Single-family residential	$	5,798,353	$	5,768,253	$	7,983	$	3,562	$	18,555	$	30,100	0.52	%
Construction	1,062,855		1,060,428		—		—		2,427		2,427		0.23
Construction - custom	289,192		289,192		—		—		—		—		—
Land - acquisition & development	123,560		122,620		—		270		670		940		0.76
Land - consumer lot loans	101,908		101,294		144		117		353		614		0.60
Multi-family	1,385,103		1,385,103		—		—		—		—		—
Commercial real estate	1,452,169		1,448,946		316		1,767		1,140		3,223		0.22
Commercial & industrial	1,140,874		1,130,836		—		—		10,038		10,038		0.88
HELOC	130,852		129,510		567		469		306		1,342		1.03
Consumer	173,306		172,777		172		328		29		529		0.31
Total Loans	$	11,658,172	$	11,608,959	$	9,182	$	6,513	$	33,518	$	49,213	0.42	%
Delinquency %			99.58%		0.08%		0.06%		0.29%		0.42%

September 30, 2017	Amount of Loans		Days Delinquent Based on $ Amount of Loans										% based on $
Loan type	Net of Loans in Process		Current		30		60		90		Total
	(In thousands)
Single-family residential	$	5,709,690	$	5,671,933	$	10,925	$	4,810	$	22,022	$	37,757	0.66	%
Construction	793,959		793,959		—		—		—		—		—
Construction - custom	277,599		277,508		—		—		91		91		0.03
Land - acquisition & development	104,856		104,526		—		—		330		330		0.31
Land - consumer lot loans	104,335		103,389		112		680		154		946		0.91
Multi-family	1,303,119		1,302,720		5		255		139		399		0.03
Commercial real estate	1,434,610		1,432,052		507		—		2,051		2,558		0.18
Commercial & industrial	1,093,360		1,092,735		—		51		574		625		0.06
HELOC	144,850		143,974		221		342		313		876		0.60
Consumer	85,075		84,644		245		107		79		431		0.51
Total Loans	$	11,051,453	$	11,007,440	$	12,015	$	6,245	$	25,753	$	44,013	0.40	%
Delinquency %			99.60%		0.11%		0.06%		0.23%		0.40%

The percentage of total delinquent loans was 0.42% as of September 30, 2018, as compared to 0.40% as of September 30, 2017.

Most loans restructured in troubled debt restructurings ("TDRs") are accruing and performing loans where the borrower has proactively approached the Company about modifications due to temporary financial difficulties. Each request is individually evaluated for merit and likelihood of success. The concession for these loans is typically a payment reduction through a rate reduction of 100 to 200 bps for a specific term, usually six to 12 months. Interest-only payments may also be approved during the modification period. Principal forgiveness is not an available option for restructured loans. As of September 30, 2018, the outstanding balance of TDR's was $156,858,000 as compared to $207,377,000 as of September 30, 2017. As of September 30, 2018, 96.1% of the restructured loans were performing. Single-family residential loans comprised 89.1% of TDR loans as of September 30, 2018. The Company reserves for restructured loans within its allowance for loan loss methodology by taking into account the following performance indicators: 1) time since modification; 2) current payment status and 3) geographic area.

The following table provides information related to loans that were modified in a TDR during the periods presented.

	Twelve Months Ended September 30, 2018					Twelve Months Ended September 30, 2017
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded
Troubled Debt Restructurings:	Contracts	Investment		Investment		Contracts	Investment		Investment
		(In thousands)					(In thousands)
Single-family residential	27	$	5,070	$	5,070	38	$	7,115	$	7,115
Land - acquisition & development	1	107		107		—	—		—
Land - consumer lot loans	—	—		—		2	211		211
Commercial real estate	1	120		120		—	—		—
Commercial & industrial	4	7,739		7,739		—	—		—
HELOC	2	95		95		4	552		552
Consumer	1	—		—		—	—		—
	36	$	13,131	$	13,131	44	$	7,878	$	7,878

The following table provides information on payment defaults occurring during the periods presented where the loan had been modified in a TDR within 12 months of the payment default.

	Twelve Months Ended September 30, 2018			Twelve Months Ended September 30, 2017
	Number of	Recorded		Number of	Recorded
TDRs That Subsequently Defaulted:	Contracts	Investment		Contracts	Investment
	(In thousands)			(In thousands)
Single-family residential	4	$	433	24	$	4,214
Commercial real estate	—	—		2	267
HELOC	1	77		—	—
	5	$	510	26	$	4,481

In May 2018, the Bank entered into an agreement with the FDIC to early terminate its remaining FDIC loss share agreements, which related to the Horizon Bank and Home Valley Bank acquisitions. The Bank paid $39,906,000 to settle the FDIC clawback liability and under the termination agreement, all rights and obligations of the Bank and the FDIC have been resolved and completed. As such, future recoveries, gains, losses and expenses related to the previously covered assets will now be recognized entirely by the Bank and the FDIC will no longer share in such gains or losses.