Loans Receivable And Allowance For Loan Losses (Tables)

6 Months Ended

Mar. 31, 2025

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 March 31, 2025 and September 30, 2024 (dollars in thousands):


	March 31, 2025				September 30, 2024
	Amount		Percent		Amount		Percent
Mortgage loans:
One- to four-family (1)	$	315,421	20.8	%	$	299,123	19.7	%
Multi-family	178,590		11.8		177,350		11.7
Commercial real estate	602,248		39.7		599,219		39.6
Construction - custom and owner/builder	114,401		7.5		132,101		8.7
Construction - speculative one- to four-family	9,791		0.6		11,495		0.8
Construction - commercial	22,352		1.5		29,463		1.9
Construction - multi-family	46,602		3.1		28,401		1.9
Construction - land development	15,032		1.0		17,741		1.2
Land	32,301		2.1		29,366		1.9
Total mortgage loans	1,336,738		88.1		1,324,259		87.4

Consumer loans:
Home equity and second mortgage	47,458		3.1		47,913		3.2
Other	2,375		0.2		3,129		0.2
Total consumer loans	49,833		3.3		51,042		3.4

Commercial loans:
Commercial business	131,243		8.6		138,743		9.2
U.S. Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans	156		—		260		—
Total commercial loans	131,399		8.6		139,003		9.2

Total loans receivable	1,517,970		100.0	%	1,514,304		100.0	%
Less:
Undisbursed portion of construction loans in process ("LIP")	75,042				69,878
Deferred loan origination fees, net	5,329				5,425
ACL	17,525				17,478
Subtotal	97,896				92,781
Loans receivable, net	$	1,420,074			$	1,421,523

__________________

(1) Does not include one- to four-family loans held for sale totaling $1.2 million and $0 at March 31, 2025 and September 30, 2024, respectively.

Financing Receivable Gross Charge Offs and Credit Quality Indicators

The following table sets forth the Company's loan portfolio at March 31, 2025 by risk attribute and year of origination as well as current period gross charge-offs (dollars in thousands):


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total Loans Receivable
One-to four-family
Risk Rating
Pass	$	2,866	$	19,918	$	80,240	$	108,811	$	46,423	$	50,451	$	—	$	308,709
Watch	—		—		1,781		—		—		—		—		1,781
Special Mention	—		—		—		4,884		—		—		—		4,884
Substandard	—		—		—		—		—		47		—		47
Total one- to four-family	$	2,866	$	19,918	$	82,021	$	113,695	$	46,423	$	50,498	$	—	$	315,421


Multi-family
Risk Rating
Pass	$	3,253	$	13,132	$	21,521	$	39,369	$	23,076	$	67,320	$	1,169	$	168,840


Substandard	—		—		—		—		9,750		—		—		9,750
Total multi-family	$	3,253	$	13,132	$	21,521	$	39,369	$	32,826	$	67,320	$	1,169	$	178,590


Commercial real estate
Risk Rating
Pass	$	24,398	$	25,722	$	74,690	$	125,256	$	88,705	$	239,554	$	8,117	$	586,442
Watch	—		—		—		243		—		9,696		—		9,939
Special Mention	—		—		—		—		—		5,543		—		5,543
Substandard	—		—		—		—		—		324		—		324
Total commercial real estate	$	24,398	$	25,722	$	74,690	$	125,499	$	88,705	$	255,117	$	8,117	$	602,248




	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total Loans Receivable
Construction-custom & owner/builder (1)
Risk Rating
Pass	$	8,364	$	46,526	$	2,064	$	—	$	—	$	—	$	—	$	56,954
Watch	—		2,469		9,214		2,403		2,425		435		—		16,946


Total construction-custom & owner/builder	$	8,364	$	48,995	$	11,278	$	2,403	$	2,425	$	435	$	—	$	73,900


Construction-speculative one-to four-family (1)
Risk Rating
Pass	$	2,533	$	1,850	$	317	$	—	$	—	$	—	$	—	$	4,700
Watch	—		—		467		—		—		—		—		467


Total construction-speculative one-to four-family	$	2,533	$	1,850	$	784	$	—	$	—	$	—	$	—	$	5,167


Construction-commercial (1)
Risk Rating
Pass	$	3,981	$	2,498	$	9,283	$	—	$	—	$	—	$	—	$	15,762



Total construction-commercial	$	3,981	$	2,498	$	9,283	$	—	$	—	$	—	$	—	$	15,762


Construction-multi-family (1)
Risk Rating
Pass	$	1,648	$	4,513	$	18,606	$	—	$	—	$	—	$	—	$	24,767



Total construction-multi-family	$	1,648	$	4,513	$	18,606	$	—	$	—	$	—	$	—	$	24,767


Construction-land development (1)
Risk Rating
Pass	$	—	$	522	$	1,469	$	—	$	—	$	—	$	—	$	1,991


Substandard	—		—		—		11,549		—		—		—		11,549
Total construction-land development	$	—	$	522	$	1,469	$	11,549	$	—	$	—	$	—	$	13,540


Land
Risk Rating
Pass	$	5,754	$	9,758	$	4,128	$	6,092	$	3,020	$	2,530	$	251	$	31,533
Watch	—		—		—		299		—		469		—		768


Total land	$	5,754	$	9,758	$	4,128	$	6,391	$	3,020	$	2,999	$	251	$	32,301


Home equity and second mortgage
Risk Rating
Pass	$	1,014	$	5,444	$	4,079	$	1,753	$	246	$	2,441	$	31,807	$	46,784
Watch	—		—		—		—		—		11		29		40

Substandard	—		—		—		—		—		59		575		634
Total home equity and second mortgage	$	1,014	$	5,444	$	4,079	$	1,753	$	246	$	2,511	$	32,411	$	47,458




	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total Loans Receivable
Other consumer
Risk Rating
Pass	$	942	$	300	$	414	$	90	$	48	$	473	$	76	$	2,343
Watch	—		—		—		—		—		9		—		9

Substandard	—		—		—		—		—		—		23		$	23
Total other consumer	$	942	$	300	$	414	$	90	$	48	$	482	$	99	$	2,375
Current period gross write-offs	$	2	$	1	$	—	$	—	$	—	$	—	$	1	$	4

Commercial business
Risk Rating
Pass	$	4,090	$	14,288	$	18,849	$	31,589	$	7,323	$	14,785	$	38,148	$	129,072
Watch	—		—		—		—		22		—		—		22
Special Mention	—		—		—		211		327		226		—		764
Substandard	—		—		159		153		—		617		254		1,183
Doubtful	—		202		—		—		—		—		—		202
Total commercial business	$	4,090	$	14,490	$	19,008	$	31,953	$	7,672	$	15,628	$	38,402	$	131,243
Current period gross write-offs	$	—	$	—	$	—	$	241	$	—	$	—	$	—	$	241

SBA PPP
Risk Rating
Pass	$	—	$	—	$	—	$	—	$	143	$	13	$	—	$	156



Total SBA PPP	$	—	$	—	$	—	$	—	$	143	$	13	$	—	$	156


Total loans receivable, gross (1)
Risk Rating
Pass	$	58,843	$	144,471	$	235,660	$	312,960	$	168,984	$	377,567	$	79,568	$	1,378,053
Watch	—		2,469		11,462		2,945		2,447		10,620		29		29,972
Special Mention	—		—		—		5,095		327		5,769		—		11,191
Substandard	—		—		159		11,702		9,750		1,047		852		23,510
Doubtful	—		202		—		—		—		—		—		202
Total loans receivable	$	58,843	$	147,142	$	247,281	$	332,702	$	181,508	$	395,003	$	80,449	$	1,442,928
Current period gross charge-off	$	2	$	1	$	—	$	241	$	—	$	—	$	1	$	245

_____________________

(1) Net of construction LIP

The following table sets forth the Company's loan portfolio at September 30, 2024 by risk attribute and year of origination as well

as gross charges offs in the year ending September 30, 2024:


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
One-to four-family
Risk Rating
Pass	$	12,941	$	66,671	$	113,834	$	48,120	$	19,053	$	36,659	$	—	$	297,278
Watch	—		1,796		—		—		—		—		—		1,796

Substandard	—		—		—		—		—		49		—		49
Total one- to four-family	$	12,941	$	68,467	$	113,834	$	48,120	$	19,053	$	36,708	$	—	$	299,123


Multi-family
Risk Rating
Pass	$	13,136	$	19,440	$	39,673	$	33,144	$	27,029	$	43,759	$	1,169	$	177,350



Total multi-family	$	13,136	$	19,440	$	39,673	$	33,144	$	27,029	$	43,759	$	1,169	$	177,350


Commercial real estate
Risk Rating
Pass	$	23,758	$	73,005	$	126,939	$	91,035	$	55,498	$	194,273	$	8,799	$	573,307
Watch	—		944		—		—		4,201		10,548		—		15,693
Special Mention	—		—		—		—		—		4,401		—		4,401
Substandard	—		—		—		—		—		5,818		—		5,818
Total commercial real estate	$	23,758	$	73,949	$	126,939	$	91,035	$	59,699	$	215,040	$	8,799	$	599,219


Construction-custom & owner/builder (1)
Risk Rating
Pass	$	38,303	$	29,159	$	778	$	—	$	—	$	—	$	—	$	68,240
Watch	221		3,239		5,848		2,861		429		436		—		13,034


Total construction-custom & owner/builder	$	38,524	$	32,398	$	6,626	$	2,861	$	429	$	436	$	—	$	81,274


Construction-speculative one-to four-family (1)
Risk Rating
Pass	$	5,039	$	2,412	$	—	$	—	$	—	$	—	$	—	$	7,451



Total construction-speculative one-to four-family	$	5,039	$	2,412	$	—	$	—	$	—	$	—	$	—	$	7,451


Construction-commercial (1)
Risk Rating
Pass	$	6,006	$	16,349	$	1,457	$	—	$	—	$	—	$	—	$	23,812



Total construction-commercial	$	6,006	$	16,349	$	1,457	$	—	$	—	$	—	$	—	$	23,812


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
Construction-multi-family (1)
Risk Rating
Pass	$	588	$	20,169	$	—	$	—	$	—	$	—	$	—	$	20,757



Total construction-multi-family	$	588	$	20,169	$	—	$	—	$	—	$	—	$	—	$	20,757


Construction-land development (1)
Risk Rating
Pass	$	1,673	$	2,807	$	—	$	—	$	—	$	—	$	—	$	4,480
Watch	—		—		11,549		—		—		—		—		11,549


Total construction-land development	$	1,673	$	2,807	$	11,549	$	—	$	—	$	—	$	—	$	16,029



Land
Risk Rating
Pass	$	10,287	$	4,828	$	6,588	$	4,004	$	766	$	1,954	$	458	$	28,885
Watch	—		—		—		—		—		481		—		481


Total land	$	10,287	$	4,828	$	6,588	$	4,004	$	766	$	2,435	$	458	$	29,366


Home equity and second mortgage
Risk Rating
Pass	$	5,820	$	4,716	$	1,990	$	252	$	573	$	2,097	$	31,766	$	47,214


Substandard	—		—		—		—		—		81		618		699
Total home equity and second mortgage	$	5,820	$	4,716	$	1,990	$	252	$	573	$	2,178	$	32,384	$	47,913


Other consumer
Risk Rating
Pass	$	1,744	$	441	$	241	$	57	$	8	$	501	$	71	$	3,063
Watch	—		—		—		—		—		65		1		66


Total other consumer	$	1,744	$	441	$	241	$	57	$	8	$	566	$	72	$	3,129
Current period gross write-offs	$	6	$	1	$	—	$	—	$	—	$	—	$	2	$	9
Commercial business
Risk Rating
Pass	$	16,129	$	19,910	$	35,117	$	8,588	$	7,589	$	4,775	$	43,444	$	135,552
Watch	—		—		202		36		696		6		180		1,120

Substandard	—		1,352		—		—		—		517		—		1,869
Doubtful	—		202		—		—		—		—		—		202
Total commercial business	$	16,129	$	21,464	$	35,319	$	8,624	$	8,285	$	5,298	$	43,624	$	138,743
Current period gross write-offs	$	—	$	79	$	—	$	—	$	—	$	13	$	—	$	92

SBA PPP
Risk Rating
Pass	$	—	$	—	$	—	$	224	$	36	$	—	$	—	$	260



Total SBA PPP	$	—	$	—	$	—	$	224	$	36	$	—	$	—	$	260


	Term Loans Amortized Cost Basis by Origination Fiscal Year
Type	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total Loans Receivable
Total loans receivable, gross (1)
Risk Rating
Pass	$	135,424	$	259,907	$	326,617	$	185,424	$	110,552	$	284,018	$	85,707	$	1,387,649
Watch	221		5,979		17,599		2,897		5,326		11,536		181		43,739
Special Mention	—		—		—		—		—		4,401		—		4,401
Substandard	—		1,352		—		—		—		6,465		618		8,435
Doubtful	—		202		—		—		—		—		—		202
Total loans receivable	$	135,645	$	267,440	$	344,216	$	188,321	$	115,878	$	306,420	$	86,506	$	1,444,426
Current period gross charge-off	$	6	$	80	$	—	$	—	$	—	$	13	$	2	$	101

Schedule of Allowance for Loan Losses

The following tables set forth information for the three and six months ended March 31, 2025 and 2024 regarding activity in the ACL by portfolio segment (dollars in thousands):


	Three Months Ended March 31, 2025
	Beginning Allowance		Provision for (Recapture of) Credit Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	2,699	$	101	$	—	$	—	$	2,800
Multi-family	1,311		4		—		—		1,315
Commercial real estate	6,892		91		—		—		6,983
Construction – custom and owner/builder	1,261		(44)		—		—		1,217
Construction – speculative one- to four-family	82		7		—		—		89
Construction – commercial	329		29		—		—		358
Construction – multi-family	527		16		—		—		543
Construction – land development	292		83		—		—		375
Land	802		50		—		—		852
Consumer loans:
Home equity and second mortgage	353		(8)		—		—		345
Other	34		1		(2)		—		33
Commercial business loans	2,706		(93)		—		2		2,615

Total	$	17,288	$	237	$	(2)	$	2	$	17,525


	Six Months Ended March 31, 2025
	Beginning Allowance		Provision for (Recapture of) Credit Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	2,632	$	168	$	—	$	—	$	2,800
Multi-family	1,308		7		—		—		1,315
Commercial real estate	6,934		49		—		—		6,983
Construction – custom and owner/builder	1,328		(111)		—		—		1,217
Construction – speculative one- to four-family	128		(39)		—		—		89
Construction – commercial	537		(179)		—		—		358
Construction – multi-family	456		87		—		—		543
Construction – land development	335		40		—		—		375
Land	793		59		—		—		852
Consumer loans:
Home equity and second mortgage	348		(3)		—		—		345
Other	39		(2)		(4)		—		33
Commercial business loans	2,640		213		(241)		3		2,615

Total	$	17,478	$	289	$	(245)	$	3	$	17,525


	Three Months Ended March 31, 2024
	Beginning Allowance		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One- to four-family	$	2,096	$	89	$	—	$	—	$	2,185
Multi-family	1,200		158		—		—		1,358
Commercial real estate	6,822		132		—		—		6,954
Construction – custom and owner/builder	1,234		(19)		—		—		1,215
Construction – speculative one- to four-family	132		10		—		—		142
Construction – commercial	430		21		—		—		451
Construction – multi-family	735		(257)		—		—		478
Construction – land development	298		(43)		—		—		255
Land	757		83		—		—		840
Consumer loans:
Home equity and second mortgage	286		19		—		—		305
Other	46		3		(4)		—		45
Commercial business loans	2,619		(30)		—		1		2,590

Total	$	16,655	$	166	$	(4)	$	1	$	16,818


	Six Months Ended March 31, 2024
	Beginning Allowance		Impact of Adopting CECL (ASU 2016-13)		Provision for (Recapture of) Loan Losses		Charge- offs		Recoveries		Ending Allowance
Mortgage loans:
One-to four-family	$	2,417	$	(408)	$	176	$	—	$	—	$	2,185
Multi-family	1,156		(120)		322		—		—		1,358
Commercial real estate	7,209		(494)		239		—		—		6,954
Construction – custom and owner/builder	750		542		(77)		—		—		1,215
Construction – speculative one-to four-family	148		(16)		10		—		—		142
Construction – commercial	316		176		(41)		—		—		451
Construction – multi-family	602		204		(328)		—		—		478
Construction – land development	274		25		(44)		—		—		255
Land	406		318		116		—		—		840
Consumer loans:
Home equity and second mortgage	519		(243)		29		—		—		305
Other	53		(7)		5		(6)		—		45
Commercial business loans	1,967		484		138		—		1		2,590

Total	$	15,817	$	461	$	545	$	(6)	$	1	$	16,818

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of March 31, 2025 (in thousands):


	Recorded Investment		Related ACL
Mortgage loans:
One- to four-family	$	47	$	—
Commercial real estate	324		—

Consumer loans:
Home equity and second mortgage	575		—
Commercial business loans	1,381		423
Total	$	2,327	$	423

The following table is a summary of the amortized cost of collateral dependent non-accrual loans as of September 30, 2024 (in thousands):


	Recorded Investment		Related ACL
Mortgage loans:
One- to four-family	$	49	$	—
Commercial real estate	1,158		—

Consumer loans:
Home equity and second mortgage	618		—
Commercial business loans	2,060		506
Total	$	3,885	$	506

Past Due Status of Loans Receivable

The following tables present an analysis of loans by aging category and portfolio segment at March 31, 2025 and September 30, 2024 (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
March 31, 2025
Mortgage loans:
One- to four-family	$	—	$	—	$	47	$	—	$	47	$	315,374	$	315,421
Multi-family	—		—		—		—		—		178,590		178,590
Commercial real estate	976		—		324		—		1,300		600,948		602,248
Construction – custom and owner/builder (2)	—		—		—		—		—		73,900		73,900
Construction – speculative one- to four-family (2)	—		—		—		—		—		5,167		5,167
Construction – commercial (2)	—		—		—		—		—		15,762		15,762
Construction – multi-family (2)	—		—		—		—		—		24,767		24,767
Construction – land development (2)	—		—		—		—		—		13,540		13,540
Land	—		—		—		—		—		32,301		32,301
Consumer loans:
Home equity and second mortgage	—		—		575		—		575		46,883		47,458
Other	—		—		—		—		—		2,375		2,375
Commercial business loans	20		—		1,381		—		1,401		129,842		131,243
SBA PPP loans	—		—		—		—		—		156		156
Total	$	996	$	—	$	2,327	$	—	$	3,323	$	1,439,605	$	1,442,928

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

(2) Net of construction LIP.


	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
September 30, 2024
Mortgage loans:
One- to four-family	$	—	$	—	$	49	$	—	$	49	$	299,074	$	299,123
Multi-family	—		—		—		—		—		177,350		177,350
Commercial real estate	—		—		1,158		—		1,158		598,061		599,219
Construction – custom and owner/builder (2)	—		—		—		—		—		81,274		81,274
Construction – speculative one- to four-family (2)	—		—		—		—		—		7,451		7,451
Construction – commercial (2)	—		—		—		—		—		23,812		23,812
Construction – multi-family (2)	—		—		—		—		—		20,757		20,757
Construction – land development (2)	—		—		—		—		—		16,029		16,029
Land	—		—		—		—		—		29,366		29,366
Consumer loans:
Home equity and second mortgage	—		—		618		—		618		47,295		47,913
Other	—		1		—		—		1		3,128		3,129
Commercial business loans	424		169		2,060		—		2,653		136,090		138,743
SBA PPP loans	—		—		—		—		—		260		260
Total	$	424	$	170	$	3,885	$	—	$	4,479	$	1,439,947	$	1,444,426

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

(2) Net of construction LIP.

Financing Receivable, Modified

The following tables present the amortized cost basis of loans at March 31, 2025 that were both experiencing financial difficulty and modified during the six months ended March 31, 2025, by loan class and modification type (dollars in thousands):

Combination - Term Extension and Collateral Addition

March 31, 2025

Amortized Cost Basis

% of Total Loan Type

Financial Effect

Commercial Business Loan

256

0.20

Loan extended three months and secured a deed of trust on a land parcel

Combination - Term Extension and Payment Modification

March 31, 2025

Amortized Cost Basis

% of Total Loan Type

Financial Effect

Commercial Business Loan

—

Loan extended seven months, monthly payment reduced with principal payments due at time of change in terms and 1.5 months after signing

TIMBERLAND BANCORP INC 10-Q