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Fair Value Measurements (Tables)
 6 Months Ended
Mar. 31, 2014
Fair Value Disclosures [Abstract]  
Fair Value of Assets Measured on Recurring Basis
The following tables present the balance of assets measured at fair value on a recurring basis at March 31, 2014 and September 30, 2013:
 
Fair Value at March 31, 2014
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Available-for-sale securities
 
 
 
 
 
 
 
Equity securities
$
101,496

 
$
—

 
$
—

 
$
101,496

Obligations of U.S. government
—

 
782,257

 
—

 
782,257

Obligations of states and political subdivisions
—

 
22,912

 
—

 
22,912

Corporate debt securities
—

 
434,570

 
—

 
434,570

Mortgage-backed securities
 
 
 
 
—

 
 
Agency pass-through certificates
—

 
1,709,873

 
—

 
1,709,873

       Other Commercial MBS
—

 
59,467

 
—

 
59,467

Balance at end of period
$
101,496

 
$
3,009,079

 
$
—

 
$
3,110,575


There were no transfers between, into and/or out of Levels 1, 2 or 3 during the quarter ended March 31, 2014.
 
Fair Value at September 30, 2013
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Available-for-sale securities
 
 
 
 
 
 
 
Equity securities
$
101,237

 
$
—

 
$
—

 
$
101,237

Obligations of U.S. government
—

 
533,975

 
—

 
533,975

Obligations of states and political subdivisions
—

 
22,545

 
—

 
22,545

Corporate debt securities
—

 
452,015

 
—

 
452,015

Mortgage-backed securities
 
 
 
 
 
 
 
Agency pass-through certificates
—

 
1,251,176

 
—

 
1,251,176

Balance at end of period
$
101,237

 
$
2,259,711

 
$
—

 
$
2,360,948
Aggregated Balance of Assets Measured at Estimated Fair Value on a Nonrecurring Basis and Total Losses Resulting from Those Fair Value Adjustments
The following tables present the aggregated balance of assets measured at estimated fair value on a nonrecurring basis through the six months ended March 31, 2014 and March 31, 2013, and the total losses (gains) resulting from those fair value adjustments for the quarters and six months ended March 31, 2014 and March 31, 2013. These estimated fair values are shown gross of estimated selling costs.
 
 
Six Months Ended March 31, 2014
 
Quarter
Ended
March 31, 2014
 
Six Months
Ended March 31, 2014
 
Level 1
 
Level  2
 
Level  3
 
Total
 
Total Losses (Gains)
 
(In thousands)
 
 
Impaired loans (1)
$
—

 
$
—

 
$
7,066

 
$
7,066

 
$
269

 
$
(536
)
Covered REO (2)
—

 
—

 
2,760

 
2,760

 
64

 
129

Real estate held for sale (2)
—

 
—

 
26,725

 
26,725

 
2,657

 
6,382

Balance at end of period
$
—

 
$
—

 
$
36,551

 
$
36,551

 
$
2,990

 
$
5,975





 
Six Months Ended March 31, 2013
 
Quarter
Ended
March 31, 2013
 
Six Months
Ended March 31, 2013
 
Level 1
 
Level  2
 
Level  3
 
Total
 
Total Losses
 
(In thousands)
 
 
Impaired loans (1)
$
—

 
$
—

 
$
45,966

 
$
45,966

 
$
1,225

 
$
11,038

Covered REO (2)
—

 
—

 
13,988

 
13,988

 
281

 
372

Real estate held for sale (2)
—

 
—

 
54,069

 
54,069

 
6,488

 
14,024

Balance at end of period
$
—

 
$
—

 
$
114,023

 
$
114,023

 
$
7,994

 
$
25,434




 ___________________
(1)
The losses represents remeasurements of collateral-dependent loans.
(2)
The losses represents aggregate writedowns and charge-offs on real estate held for sale.
Fair Value of Financial Instruments by Balance Sheet Grouping
Although management is not aware of any factors that would materially affect the estimated fair value amounts presented below, such amounts have not been comprehensively revalued for purposes of these financial statements since the dates shown, and therefore, estimates of fair value subsequent to those dates may differ significantly from the amounts presented below. 
 
 
 
 
March 31, 2014
 
September 30, 2013
 
 
Level in Fair Value Hierarchy
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
 
 
 
 
(In thousands)
Financial assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
1
 
$
608,236

 
$
608,236

 
$
203,563

 
$
203,563

Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
Equity securities
 
1
 
101,496

 
101,496

 
101,237

 
101,237

Obligations of U.S. government
 
2
 
782,257

 
782,257

 
533,975

 
533,975

Obligations of states and political subdivisions
 
2
 
22,912

 
22,912

 
22,545

 
22,545

Corporate debt securities
 
2
 
434,570

 
434,570

 
452,015

 
452,015

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
 
2
 
1,709,873

 
1,709,873

 
1,251,176

 
1,251,176

Other Commercial MBS
 
2
 
59,467

 
59,467

 
—

 
—

Total available-for-sale securities
 
 
 
3,110,575

 
3,110,575

 
2,360,948

 
2,360,948

Held-to-maturity securities
 
2
 
 
 
 
 
 
 
 
Total held-to-maturity securities
 
 
 
1,611,303

 
1,527,531

 
1,654,666

 
1,582,849

 
 
 
 
 
 
 
 
 
 
 
Loans receivable
 
3
 
7,737,109

 
8,205,310

 
7,528,030

 
8,070,279

Covered loans
 
3
 
229,605

 
233,275

 
295,947

 
300,610

FDIC indemnification asset
 
3
 
53,289

 
52,408

 
64,615

 
62,300

FHLB and FRB stock
 
2
 
167,174

 
167,174

 
173,009

 
173,009

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
 
 
 
Customer accounts
 
2
 
10,344,891

 
9,720,995

 
9,090,271

 
8,585,068

FHLB advances and other borrowings
 
2
 
1,930,000

 
2,056,430

 
1,930,000

 
2,064,248

The following table presents the fair value and balance sheet classification of derivatives not designated as hedging instruments at March 31, 2014 and September 30, 2013:
 
 
Asset Derivatives
 
Liability Derivatives
 
 
March 31, 2014
 
September 30, 2013
 
March 31, 2014
 
September 30, 2013
 
 
Balance Sheet
 
 
 
Balance Sheet
 
 
 
Balance Sheet
 
 
 
Balance Sheet
 
 
 
 
Location
 
Fair Value
 
Location
 
Fair Value
 
Location
 
Fair Value
 
Location
 
Fair Value
 
 
(In thousands)
Interest rate contracts
 
Other assets
 
$
322

 
Other assets
 
$
7

 
Other liabilities
 
$
322

 
Other liabilities
 
$
7

Commitments to purchase MBS
 
AFS securities
 
—

 
AFS securities
 
$
3,188

 
N/A
 
N/A
 
N/A
 
N/A
Reconciliation of Amortized Cost to Fair Value of Available-for-Sale and Held-to-Maturity Securities
The following tables provide a reconciliation of amortized cost to fair value of available-for-sale and held-to-maturity securities as of March 31, 2014 and September 30, 2013:
 
March 31, 2014
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Yield
 
Gains
 
Losses
 
 
(In thousands)
Available-for-sale securities
 
 
 
 
 
 
 
 
 
U.S. government and agency securities due
 
 
 
 
 
 
 
 
 
1 to 5 years
$
111,002

 
$
2,933

 
$
(1,035
)
 
$
112,900

 
1.58

5 to 10 years
143,562

 
863

 
(244
)
 
144,181

 
1.55

Over 10 years
524,826

 
1,284

 
(934
)
 
525,176

 
1.51

Equity Securities
 
 
 
 
 
 
 
 
 
Within 1 year
500

 
6

 
—

 
506

 
2.17

1 to 5 years
100,000

 
990

 
—

 
100,990

 
1.80

5 to 10 years
—

 
—

 
—

 
—

 
—

Corporate bonds due
 
 
 
 
 
 
 
 
 
Within 1 year
—

 
—

 
—

 
—

 
—

1 to 5 years
317,365

 
2,785

 
—

 
320,150

 
0.75

5 to 10 years
113,130

 
1,465

 
(175
)
 
114,420

 
1.53

Municipal bonds due
 
 
 
 
 
 
 
 
 
Over 10 years
20,412

 
2,500

 
—

 
22,912

 
6.45

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,703,893

 
10,746

 
(4,766
)
 
1,709,873

 
2.59

Other Commercial MBS
59,300

 
167

 
—

 
59,467

 
1.69

 
3,093,990

 
23,739

 
(7,154
)
 
3,110,575

 
2.09

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,611,303

 
1,619

 
(85,391
)
 
1,527,531

 
3.13

 
$
4,705,293

 
$
25,358

 
$
(92,545
)
 
$
4,638,106

 
2.44
%
 
 
September 30, 2013
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Yield
 
Gains
Losses
 
 
(In thousands)
Available-for-sale securities
 
 
 
 
 
 
 
 
 
U.S. government and agency securities due
 
 
 
 
 
 
 
 
 
1 to 5 years
$
61,002

 
$
3,393

 
$
(252
)
 
$
64,143

 
1.98

5 to 10 years
129,219

 
—

 
(1,547
)
 
127,672

 
0.86

Over 10 years
344,571

 
—

 
(2,411
)
 
342,160

 
0.93

Equity Securities
 
 
 
 
 
 
 
 
 
1 to 5 years
500

 
11

 
—

 
511

 
2.17

5 to 10 years
100,000

 
726

 
—

 
100,726

 
1.80

Corporate bonds due
 
 
 
 
 
 
 
 
 
Within 1 year
19,500

 
3

 
—

 
19,503

 
0.49

1 to 5 years
317,190

 
1,980

 
(130
)
 
319,040

 
0.75

5 to 10 years
113,060

 
1,180

 
(768
)
 
113,472

 
1.53

Municipal bonds due
 
 
 
 
 
 
 
 
 
Over 10 years
20,422

 
2,123

 
—

 
22,545

 
6.45

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,245,400

 
10,270

 
(4,494
)
 
1,251,176

 
2.18

 
2,350,864

 
19,686

 
(9,602
)
 
2,360,948

 
1.70

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,654,666

 
3,387

 
(75,204
)
 
1,582,849

 
3.14

 
$
4,005,530

 
$
23,073

 
$
(84,806
)
 
$
3,943,797

 
2.30
%
Schedule of Unrealized Losses and Fair Value of Securities
The following tables indicate the total unrealized gross losses in the securities portfolio (shown above). The unrealized gross losses and fair value of securities as of March 31, 2014 and September 30, 2013 are also shown by the length of time that individual securities in each category have been in a continuous loss position. Management believes that the declines in fair value of these investments are not an other than temporary impairment.
 
March 31, 2014
Less than 12 months
 
12 months or more
 
Total
 
Unrealized
Gross Losses
 
Fair
Value
 
Unrealized
Gross Losses
 
Fair
Value
 
Unrealized
Gross Losses
 
Fair
Value
 
(In thousands)
 
 
Corporate bonds due
$
(100
)
 
$
49,900

 
$
(76
)
 
$
9,925

 
$
(176
)
 
$
59,825

U.S. government and agency securities due
(2,158
)
 
256,389

 
(55
)
 
12,083

 
(2,213
)
 
268,472

Agency pass-through certificates
(37,918
)
 
1,112,954

 
(52,238
)
 
934,305

 
(90,156
)
 
2,047,259

 
$
(40,176
)
 
$
1,419,243

 
$
(52,369
)
 
$
956,313

 
$
(92,545
)
 
$
2,375,556



September 30, 2013
Less than 12 months
 
12 months or more
 
Total
 
Unrealized
Gross Losses
 
Fair
Value
 
Unrealized
Gross Losses
 
Fair
Value
 
Unrealized
Gross Losses
 
Fair
Value
 
(In thousands)
 
 
Corporate bonds due
$
(660
)
 
$
52,434

 
$
(238
)
 
$
9,763

 
$
(898
)
 
$
62,197

U.S. government and agency securities due
(4,144
)
 
309,109

 
(66
)
 
14,091

 
(4,210
)
 
323,200

Agency pass-through certificates
(78,291
)
 
1,703,948

 
(1,407
)
 
166,503

 
(79,698
)
 
1,870,451

 
$
(83,095
)
 
$
2,065,491

 
$
(1,711
)
 
$
190,357

 
$
(84,806
)
 
$
2,255,848