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Derivative and Hedging Activities | 6 Months Ended
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Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative and Hedging Activities | Derivative and Hedging Activities Derivative financial instruments are recorded at fair value in Other assets and Other liabilities on the Condensed Consolidated Statements of Condition. The Company's policy is to present our derivative assets and derivative liabilities on the Condensed Consolidated Statements of Condition on a gross basis, even when provisions allowing for set-off are in place. However, for derivative contracts cleared through certain central clearing parties, variation margin payments are recognized as settlements. We are exposed to non-performance risk by the counterparties to our various derivative financial instruments. A majority of our derivatives are centrally cleared through a Central Counterparty Clearing House or consist of residential mortgage interest rate lock commitments further limiting our exposure to non-performance risk. We may exchange cash collateral with derivative counterparties for initial margin or to cover the prior day's fair value of open positions. We believe that the non-performance risk inherent in our remaining derivative contracts is minimal based on credit standards and the collateral provisions of the derivative agreements. Derivatives not designated as hedging instruments. We maintain a derivative portfolio of interest rate swaps, foreign currency swaps, futures, swaptions and forward commitments used to manage exposure to changes in interest rates and MSR asset values and to meet the needs of customers. We also enter into interest rate lock commitments, which are commitments to originate mortgage loans whereby the interest rate on the loan is determined prior to funding and the customers have locked into that interest rate. Market risk on interest rate lock commitments and mortgage loans held for sale is managed using corresponding forward sale commitments and U.S. Treasury futures. Changes in the fair value of derivatives not designated as hedging instruments are recognized in current period earnings on the Condensed Consolidated Statements of (Loss) Income. Derivatives designated as hedging instruments. We have historically designated certain interest rate swaps as cash flow hedges on overnight SOFR-based variable interest payments on FHLB advances. Beginning in the three months ended June 30, 2025, we have designated certain interest rate caps as cash flow hedges on overnight SOFR-based variable interest payments on FHLB advances. Changes in the fair value of derivatives designated as cash flow hedges are recorded in AOCL on the Condensed Consolidated Statements of Condition and reclassified into Interest expense - Borrowed funds on the Condensed Consolidated Statements of (Loss) Income in the same period in which the hedged transaction is recognized in e arnings. Premiums paid on certain hedging instruments are accounted for separately from the hedge’s fair value and are amortized over the life of the derivative. We have historically designated certain fixed-rate to variable-rate interest rate swaps as fair value hedges to hedge the changes in fair value of certain of our pools of fixed-rate assets. Beginning in the three months ended March 31, 2025, we designated certain fixed-rate to variable-rate interest rate swaps as fair value hedges to hedge the changes in fair value of certain debt securities available for sale. Changes in the fair value of derivatives designated as fair value hedges and the hedged item are recognized in Interest income within Loans and leases or Securities and money market investments on the Condensed Consolidated Statements of (Loss) Income. The fair value basis adjustments remaining from discontinued hedges are recognized in Interest income - Loans and leases on the Condensed Consolidated Statements of (Loss) Income over the remaining life of the hedged items. The following tables set forth information regarding our derivative financial instruments:
| June 30, 2025 |  | December 31, 2024
|  |  | Fair Value |  |  |  |  |  | Fair Value |  |
| Notional Amount |  | Other Assets |  | Other Liabilities |  | Expiration Dates |  | Notional Amount |  | Other Assets |  | Other Liabilities |  | Expiration Dates
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps (fair value hedge) | $ | 2,993 |  |  | $ | — |  |  | $ | — |  |  | 2028-2029 |  | — |  | — |  | — |  |
Interest rate caps (cash flow hedge) (1) | $ | 2,000 |  |  | $ | — |  |  | $ | — |  |  | 2028 |  | — |  | — |  | — |  |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Rate lock commitments (2) | $ | 439 |  |  | $ | 4 |  |  | $ | 3 |  |  | 2025 |  | $ | 563 |  |  | $ | 3 |  |  | $ | 3 |  |  | 2025
Mortgage-backed securities forwards (2) | 269 |  |  | — |  |  | 5 |  |  | 2025 |  | 344 |  |  | 7 |  |  | 2 |  |  | 2025
Interest rate swaps (3) | 3,229 |  |  | 17 |  |  | 22 |  |  | 2025-2041 |  | 3,323 |  |  | 15 |  |  | 30 |  |  | 2024-2041
(1)Refer to Note 3 - Accumulated Other Comprehensive Loss for additional information related to the change in fair value and the amount recognized in income. (2)During the three months ended June 30, 2025 and 2024, the amount recorded in Net gain on loan sales and securitizations in the Condensed Consolidated Statement of Income was immaterial. During the six months ended June 30, 2025 and 2024, the amount recorded in Net gain on loan sales and securitizations in the Condensed Consolidated Statement of Income was $(9) million and $23 million, respectively. (3)During the three and six months ended June 30, 2025 and during the three and six months ended June 30, 2024, the amount recorded in Fee income in the Condensed Consolidated Statement of Income was immaterial. The following amounts were recorded in the Condensed Consolidated Statements of Condition related to items designated and qualifying as hedges items in a fair value hedging relationship:
| June 30, 2025 |  | December 31, 2024
| Carrying Amount of Hedged Items |  | Cumulative Amount of Fair Value Hedging Adjustments |  | Carrying Amount of Hedged Items |  | Cumulative Amount of Fair Value Hedging Adjustments
U.S. treasury obligations | $ | 1,013 |  |  | $ | 14 |  |  | $ | — |  |  | $ | — |
GSE CMOs | 1,999 |  |  | 10 |  |  | — |  |  | — |
GSE debentures | 1,262 |  |  | 7 |  |  | — |  |  | — |
Debt securities available-for-sale(1) | $ | 4,274 |  |  | $ | 31 |  |  | $ | — |  |  | $ | — |
Loans and leases held-for-investment(2) | $ | 3,401 |  |  | $ | (9) |  |  | $ | 5,861 |  |  | $ | (18) |
(1)During the three and six months ended June 30, 2025 and 2024, the amount recorded in Interest income - Securities and money market investments in the Condensed Consolidated Statement of Income was immaterial. (2)Relates to discontinued hedges on multi-family loans. During the three months ended June 30, 2025 and 2024, the amount recorded to Interest income - Loans and leases in the Condensed Consolidated Statement of Income was immaterial. During the six months ended June 30, 2025 and 2024, the amount recorded to Interest income - Loans and leases was $7 million and $17 million, respectively. The tables below present the gross derivative assets and liabilities, and the related cash pledged as collateral at June 30, 2025 and December 31, 2024. No amounts were netted in the Condensed Consolidated Statements of Condition.
|  | June 30, 2025
|  | Gross Amounts Not Offset in the Statements of Condition |  | Cash Collateral Pledged (Received)
Derivatives designated as hedging instruments: |  |  |  |
Interest rate swaps (fair value hedge) |  | $ | — |  |  | $ | 66 |
Interest rate caps (cash flow hedge) |  | — |  |  | — |
Derivatives not designated as hedging instruments: |  |  |  |
Assets |  |  |  |
Interest rate swaptions |  | $ | 17 |  |  | $ | (1) |
Total derivative assets |  | $ | 17 |  |  | $ | (1) |
Liabilities |  |  |  |
Mortgage-backed securities forwards |  | $ | 5 |  |  | $ | 1 |
Interest rate swaps |  | 22 |  |  | 38 |
Total derivative liabilities |  | $ | 27 |  |  | $ | 39 |
|  | December 31, 2024
|  | Gross Amounts Not Offset in the Statements of Condition |  | Cash Collateral Pledged (Received)
Derivatives not designated as hedging instruments: |  |  |  |
Assets |  |  |  |
Mortgage-backed securities forwards |  | $ | 7 |  |  | $ | (2) |
Interest rate swaptions |  | 15 |  |  | (3) |
Total derivative assets |  | $ | 22 |  |  | $ | (5) |
Liabilities |  |  |  |
Mortgage-backed securities forwards |  | $ | 2 |  |  | $ | 10 |
Interest rate swaps |  | 30 |  |  | 47 |
Total derivative liabilities |  | $ | 32 |  |  | $ | 57 |
The following table provides a reconciliation of cash, cash equivalents and restricted cash within the Condensed Consolidated Statements of Condition that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:
| June 30, 2025
Cash and cash equivalents | $ | 8,094 |
Restricted cash included in other assets | 77 |
Total | $ | 8,171 |

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