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Derivatives and Hedging Activities (Tables)

3 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Fair Value, Notional Amount and Balance Sheet Classification

The following tables present the fair value, notional amount and balance sheet classification of derivative assets and liabilities at December 31, 2021 and September 30, 2021.

December 31, 2021			Derivative Assets												Derivative Liabilities
Interest rate contract purpose			Balance Sheet Location			Notional			Fair Value						Balance Sheet Location			Notional			Fair Value
			(In thousands)												(In thousands)
Client swap program hedges			Other assets			$	633,056		$	5,944					Other liabilities			$	633,056		$	5,944
Commercial loan fair value hedges			Other assets			—			—						Other liabilities			42,209			1,951
Mortgage loan fair value hedges			Other assets			470,000			2,632						Other liabilities			—			—
Borrowings cash flow hedges			Other assets			1,000,000			48,888						Other liabilities			—			—
						$	2,103,056		$	57,464								$	675,265		$	7,895

September 30, 2021			Derivative Assets												Derivative Liabilities
Interest rate contract purpose			Balance Sheet Location			Notional			Fair Value						Balance Sheet Location			Notional			Fair Value
			(In thousands)												(In thousands)
Client swap program hedges			Other assets			$	644,355		$	10,983					Other liabilities			$	644,355		$	10,983
Commercial loan fair value hedges			Other assets			—			—						Other liabilities			44,678			2,177
Mortgage loan fair value hedges			Other assets			—			—						Other liabilities			470,000			1,641
Borrowings cash flow hedges			Other assets			1,000,000			42,442						Other liabilities			—			—
						$	1,644,355		$	53,425								$	1,159,033		$	14,801

Schedule of Fair Value Hedge Accounting on Carrying Value of Hedged Items

The following tables present the impact of fair value hedge accounting on the carrying value of the hedged items at December 31, 2021 and September 30, 2021.

(In thousands)			December 31, 2021
Balance sheet line item in which hedged item is recorded			Carrying value of hedged items			Cumulative gain (loss) fair value hedge adjustment included in carrying amount of hedged items
Loans receivable (1) (2)			$	1,376,402		$	(260)
			$	1,376,402		$	(260)

(1) Includes the amortized cost basis of the closed mortgage loan portfolios used to designate the hedging relationships in which the hedged items are the last layer expected to be remaining at the end of the hedging relationships. At December 31, 2021, the amortized cost basis of the closed loan portfolios used in the hedging relationships was $1,332,154,000, the cumulative basis adjustment associated with the hedging relationships was $(2,357,000), and the amount of the designated hedged items was $470,000,000. During the year ended September 30, 2021, hedge accounting was discontinued on $30,000,000 (30%) of a $100,000,000 last of layer hedge. At December 31, 2021, there is $1,603,000 of remaining unamortized basis adjustment

associated with the terminated portion of the hedge and it will be recognized over the remaining life of the associated pool of loans.

(2) Includes the amortized cost basis of commercial loans designated in fair value hedging relationships. At December 31, 2021, the amortized cost basis of the hedged commercial loans was $44,248,000 and the cumulative basis adjustment associated with the hedging relationships was $2,097,000.

(In thousands)			September 30, 2021
Balance sheet line item in which hedged item is recorded			Carrying value of hedged items			Cumulative gain (loss) fair value hedge adjustment included in carrying amount of hedged items
Loans receivable (1) (2)			$	1,515,487		$	4,215
			$	1,515,487		$	4,215

(1) Includes the amortized cost basis of the closed mortgage loan portfolios used to designate the hedging relationships in which the hedged items are the last layer expected to be remaining at the end of the hedging relationships. At September 30, 2021, the amortized cost basis of the closed loan portfolios used in the hedging relationships was $1,468,517,000, the cumulative basis adjustment associated with the hedging relationships was $1,864,000, and the amount of the designated hedged items was $470,000,000. During the year ended September 30, 2021, hedge accounting was discontinued on $30,000,000 (30%) of a $100,000,000 last of layer hedge.

(2) Includes the amortized cost basis of commercial loans designated in fair value hedging relationships. At September 30, 2021, the amortized cost basis of the hedged commercial loans was $46,970,000 and the cumulative basis adjustment associated with the hedging relationships was $2,351,000. During the year ended September 30, 2021, hedge accounting was discontinued on a $46,240,000 commercial loan hedge.

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The following tables present the gain (loss) on derivative instruments in fair value and cash flow accounting hedging relationships under ASC 815 for the periods presented.

			Three Months Ended December 31, 2021						Three Months Ended December 31, 2020
			Interest income on loans receivable			Interest expense on FHLB advances			Interest income on loans receivable			Interest expense on FHLB advances
			(In thousands)						(In thousands)
Interest income/(expense), including the effects of fair value and cash flow hedges			$	138,509		$	(7,843)		$	133,671		$	(13,198)
Gain/(loss) on fair value hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives			$	(1,371)					$	(1,541)
Recognized on derivatives			4,500						4,587
Recognized on hedged items			(4,475)						(4,456)
Net income/(expense) recognized on fair value hedges			$	(1,346)					$	(1,410)
Gain/(loss) on cash flow hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives						$	2,021					$	3,597
Amount of derivative gain/(loss) reclassified from AOCI into interest income/expense						—						—
Net income/(expense) recognized on cash flow hedges						$	2,021					$	3,597

Schedule of Impact of Derivative Instruments

The following tables present the gain (loss) recognized in AOCI on derivative instruments related to cash flow hedges on borrowings for the periods presented, as well as the effect of reclassification adjustments.

(In thousands)			Three Months Ended December 31,
Amounts recognized in AOCI			2021			2020
Interest rate contracts:
Pay fixed/receive floating swaps on borrowings cash flow hedges			$	6,446		$	20,118
Reclassification adjustment of net (gain)/loss included in net income			—			—
Total pre-tax gain/(loss) recognized in AOCI			$	6,446		$	20,118

The following tables present the impact of derivative instruments (client swap program) that are not designated in accounting hedges under ASC 815 for the periods presented.

(In thousands)						Three Months Ended December 31,
Derivative instruments			Classification of gain/(loss) recognized in income on derivative instrument			2021			2020
Interest rate contracts:
Pay fixed/receive floating swap			Other noninterest income			$	5,039		$	12,376
Receive fixed/pay floating swap			Other noninterest income			(5,039)			(12,376)
						$	—		$	—

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Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments.

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