Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2014

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 December 31, 2014 and September 30, 2014:



	Fair Value at December 31, 2014
	Level 1		Level 2		Level 3		Total
	(In thousands)
Available-for-sale securities
Equity securities	$	101,636	$	—	$	—	$	101,636
Obligations of U.S. government	—		620,018		—		620,018
Obligations of states and political subdivisions	—		24,068		—		24,068
Corporate debt securities	—		527,938		—		527,938
Mortgage-backed securities
Agency pass-through certificates	—		1,527,810		—		1,527,810
Other commercial MBS	—		93,586		—		93,586
Balance at end of period	$	101,636	$	2,793,420	$	—	$	2,895,056

There were no transfers between, into and/or out of Levels 1, 2 or 3 during the quarter ended December 31, 2014.



	Fair Value at September 30, 2014
	Level 1		Level 2		Level 3		Total
	(In thousands)
Available-for-sale securities
Equity securities	$	101,387	$	—	$	—	$	101,387
Obligations of U.S. government	—		731,943		—		731,943
Obligations of states and political subdivisions	—		23,681		—		23,681
Corporate debt securities	—		509,007		—		509,007
Mortgage-backed securities
Agency pass-through certificates	—		1,584,508		—		1,584,508
Other commercial MBS	—		98,916		—		98,916
Balance at end of period	$	101,387	$	2,948,055	$	—	$	3,049,442

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 three months ended December 31, 2014 and December 31, 2013, and the total losses (gains) resulting from those fair value adjustments for the quarters ended December 31, 2014 and December 31, 2013. These estimated fair values are shown gross of estimated selling costs.



	Through December 31, 2014								Quarter Ended December 31, 2014
	Level 1		Level 2		Level 3		Total		Total Losses (Gains)
	(In thousands)
Impaired loans (1)	$	—	$	—	$	146	$	146	$	64
Covered REO (1)	—		—		1,041		1,041		75
Real estate held for sale (2)	—		—		36,901		36,901		(8,312		)
Balance at end of period	$	—	$	—	$	38,088	$	38,088	$	(8,173	)


(1)	The losses represent remeasurements of collateral-dependent loans.


(2)	The gains in this period include a one-time correction of $8.2 million (see Note A for description).



	Through December 31, 2013								Quarter Ended December 31, 2013
	Level 1		Level 2		Level 3		Total		Total Losses (Gains)
	(In thousands)
Impaired loans (1)	$	—	$	—	$	5,580	$	5,580	$	(805	)
Covered REO (2)	—		—		1,286		1,286		65
Real estate held for sale (2)	—		—		10,342		10,342		3,725
Balance at end of period	$	—	$	—	$	17,208	$	17,208	$	2,985


(1)	The gains represent remeasurements of collateral-dependent loans.


(2)	The losses represent 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.



		December 31, 2014					September 30, 2014
	Level in Fair Value Hierarchy	Carrying Amount		Estimated Fair Value			Carrying Amount		Estimated Fair Value
		(In thousands)
Financial assets
Cash and cash equivalents	1	$	542,769	$	542,769		$	781,843	$	781,843
Available-for-sale securities
Equity securities	1	101,636		101,636			101,387		101,387
Obligations of U.S. government	2	620,018		620,018			731,943		731,943
Obligations of states and political subdivisions	2	24,068		24,068			23,681		23,681
Corporate debt securities	2	527,938		527,938			509,007		509,007
Mortgage-backed securities
Agency pass-through certificates	2	1,527,810		1,527,810			1,584,508		1,584,508
Other commercial MBS	2	93,586		93,586			98,916		98,916
Total available-for-sale securities		2,895,056		2,895,056			3,049,442		3,049,442
Held-to-maturity securities
Mortgage-backed securities
Agency pass-through certificates	2	1,516,219		1,503,781			1,548,265		1,499,218
Total held-to-maturity securities		1,516,219		1,503,781			1,548,265		1,499,218

Loans receivable, net	3	8,253,917		8,816,245			8,148,322		8,667,771
Covered loans, net	3	161,478		167,129			176,476		176,761
FDIC indemnification asset	3	30,356		29,559			36,860		35,976
FHLB and FRB stock	2	154,870		154,870			158,839		158,839

Financial liabilities
Customer accounts	2	10,578,853		9,936,221			10,716,928		9,946,586
FHLB advances	2	1,830,000		1,953,751			1,930,000		2,054,437

Off balance sheet - interest rate swaps	2	—		(4,517		)	—		(170		)

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 December 31, 2014 and September 30, 2014:



	December 31, 2014
	Amortized Cost		Gross Unrealized					Fair Value		Yield
	Amortized Cost		Gains		Losses			Fair Value		Yield
	(In thousands)
Available-for-sale securities
U.S. government and agency securities due
1 to 5 years	$	120,467	$	2,396	$	(426	)	$	122,437	1.47
5 to 10 years	153,525		64		(5		)	153,584		1.12
Over 10 years	344,088		336		(427		)	343,997		1.26
Equity Securities
Within 1 year	500		16		—			516		1.80
1 to 5 years	100,000		1,120		—			101,120		1.90
5 to 10 years	—		—		—			—		—
Corporate bonds due
Within 1 year	15,000		67		—			15,067		1.00
1 to 5 years	302,627		1,524		(6		)	304,145		0.71
5 to 10 years	158,236		1,787		(1,297		)	158,726		1.42
Over 10 years	50,000		—		—			50,000		3.00
Municipal bonds due
Over 10 years	20,397		3,671		—			24,068		6.45
Mortgage-backed securities
Agency pass-through certificates	1,495,114		34,386		(1,690		)	1,527,810		2.57
Other commercial MBS	93,533		53		—			93,586		1.51
	2,853,487		45,420		(3,851		)	2,895,056		1.99
Held-to-maturity securities
Mortgage-backed securities
Agency pass-through certificates	1,516,219		9,084		(21,522		)	1,503,781		3.13
	$	4,369,706	$	54,504	$	(25,373	)	$	4,398,837	2.39	%



	September 30, 2014
	Amortized Cost		Gross Unrealized						Fair Value		Yield
	Amortized Cost		Gains		Losses				Fair Value		Yield
	(In thousands)
Available-for-sale securities
U.S. government and agency securities due
1 to 5 years	$	171,154	$	2,585		$	(748	)	$	172,991	1.26
5 to 10 years	203,317		300			(102		)	203,515		1.45
Over 10 years	354,828		1,028			(419		)	355,437		1.25
Equity Securities
1 to 5 years	100,500		887			—			101,387		1.90
5 to 10 years	—		—			—			—		—
Corporate bonds due
Within 1 year	15,000		75			—			15,075		1.00
1 to 5 years	302,540		2,372			—			304,912		0.71
5 to 10 years	138,201		1,789			(970		)	139,020		1.43
Over 10 years	50,000		—			—			50,000		3.00
Municipal bonds due
Over 10 years	20,402		3,279			—			23,681		6.45
Mortgage-backed securities
Agency pass-through certificates	1,561,639		24,893			(2,024		)	1,584,508		2.57
Other commercial MBS	98,851		65			—			98,916		1.49
	3,016,432		37,273			(4,263		)	3,049,442		1.99
Mortgage-backed securities
Agency pass-through certificates	1,548,265		4,855			(53,902		)	1,499,218		3.13
	$	4,564,697	$	42,128		$	(58,165	)	$	4,548,660	2.38	%

Schedule of Unrealized Losses and Fair Value of Securities

The following tables show the unrealized gross losses and fair value of securities at December 31, 2014 and September 30, 2014, by length of time that individual securities in each category have been in a continuous loss position. The decline in fair value is attributable to changes in interest rates. Because the Company does not intend to sell these securities and does not consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be upon maturity, the Company does not consider these investments to be other than temporarily impaired.



December 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	$	(406	)	$	72,688	$	(897	)	$	24,104	$	(1,303	)	$	96,792
U.S. government and agency securities due	(422		)	246,045		(436		)	99,564		(858		)	345,609
Agency pass-through certificates	(421		)	62,689		(22,791		)	1,332,778		(23,212		)	1,395,467
	$	(1,249	)	$	381,422	$	(24,124	)	$	1,456,446	$	(25,373	)	$	1,837,868



September 30, 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	$	(125	)	$	24,875	$	(845	)	$	24,155	$	(970	)	$	49,030
U.S. government and agency securities due	(472		)	316,578		(797		)	109,354		(1,269		)	425,932
Agency pass-through certificates	(215		)	19,212		(55,711		)	1,509,209		(55,926		)	1,528,421
	$	(812	)	$	360,665	$	(57,353	)	$	1,642,718	$	(58,165	)	$	2,003,383

- Definition

Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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