XML 35 R21.htm IDEA: XBRL DOCUMENT
v3.23.2

Derivative Instruments and Hedging Activities | 12 Months Ended
--- | ---
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Risk Management Objective of Using Derivatives The Company uses various financial instruments, including derivatives, to manage its exposure to interest rate risk. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to specific wholesale funding positions and assets. Fair Values of Derivative Instruments on the Statement of Financial Condition The tables below present the fair value of the Company’s derivative financial instruments as well as their classification on the Statement of Financial Condition as of June 30, 2023 and 2022:
| June 30, 2023
| Asset Derivatives |  | Liability Derivatives
| Location |  | Fair Value |  | Location |  | Fair Value
| (In Thousands)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Interest rate contracts | Other assets |  | $ | 71,624 |  |  | Other liabilities |  | $ | — |
Total |  |  | $ | 71,624 |  |  |  |  | $ | — |
| June 30, 2022
| Asset Derivatives |  | Liability Derivatives
| Location |  | Fair Value |  | Location |  | Fair Value
| (In Thousands)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |
Interest rate contracts | Other assets |  | $ | 41,223 |  |  | Other liabilities |  | $ | — |
Total |  |  | $ | 41,223 |  |  |  |  | $ | — |
Cash Flow Hedges of Interest Rate Risk The Company uses derivatives to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company has entered into interest rate swaps, interest rate caps and an interest rate floor as part of its interest rate risk management strategy. These interest rate products are designated as cash flow hedges. As of June 30, 2023, the Company had a total of 13 interest rate swaps and caps with a total notional amount of $1.45 billion hedging specific wholesale funding positions and one interest rate floor with a notional amount of $100.0 million hedging floating-rate available for sale securities. For derivatives designated as cash flow hedges, the gain or loss on the derivatives is recorded in other comprehensive income (loss), net of tax, and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. For cash flow hedges on the Company's wholesale funding positions, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s hedged variable rate wholesale funding positions. During the year ended June 30, 2023, the Company reclassified $20.4 million as a reduction in interest expense. During the next 12 months, the Company estimates that $33.8 million will be reclassified as a reduction in interest expense. For cash flow hedges on the Company’s assets, amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest income as interest payments are received on the Company’s hedged variable rate assets. During the year ended June 30, 2023, the Company did not reclassify any amount to interest income. During the next twelve months, the Company estimates that $200,000 will be reclassified as a reduction in interest income. The table below presents the pre-tax effects of the Company’s derivative instruments designated as cash flow hedges on the Consolidated Statements of Income for the years ended June 30, 2023, 2022 and 2021:
| Year Ended June 30,
| 2023 |  | 2022 |  | 2021
| (In Thousands)
Amount of gain recognized in other comprehensive income | $ | 39,002 |  |  | $ | 35,844 |  |  | $ | 10,825 |
Amount of gain (loss) reclassified from accumulated other comprehensive income to interest expense | 20,393 |  |  | (4,273) |  |  | (8,281) |
Fair Value Hedges of Interest Rate Risk The Company is exposed to changes in the fair value of certain of its fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate. Interest rate swaps designated as fair value hedges involve the payment of fixed-rate amounts to a counterparty in exchange for the Company receiving variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Such derivatives are used to hedge the changes in fair value of certain of its pools of fixed rate assets. As of June 30, 2023, the Company had five interest rate swaps with a notional amount of $675.0 million hedging fixed-rate residential mortgage loans. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivatives as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income. The table below presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the year ended June 30, 2023. There were no fair value hedges for the years ended June 30, 2022 and 2021:
| Year Ended June 30,
| 2023 |  |  |  |
| (In Thousands)
Loss on hedged items recorded in interest income on loans | $ | (11,437) |  |  |  |  |
Gain on hedges recorded in interest income on loans | 14,563 |  |  |  |  |
As of June 30, 2023, the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges. There were no fair value hedges at June 30, 2022:
| June 30, 2023 |  |
Loans receivable: |  |  |
Carrying amount of the hedged assets | $ | 663,563 |  |  |
Fair value hedging adjustment included in the carrying amount of the hedged assets | (11,437) |  |  |
________________________________________ (1)This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $1.10 billion. Offsetting Derivatives The tables below present a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives in the Consolidated Statement of Financial Condition as of June 30, 2023 and 2022, respectively. The net amounts presented for derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Consolidated Statement of Financial Condition.
| June 30, 2023
|  |  |  |  |  |  | Gross Amounts Not Offset |  |
| Gross Amount Recognized |  | Gross Amounts Offset |  | Net Amounts Presented |  | Financial Instruments |  | Cash Collateral Received (Posted) |  | Net Amount
| (In Thousands)
Assets: |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | 72,418 |  |  | $ | (794) |  |  | $ | 71,624 |  |  | $ | — |  |  | $ | — |  |  | $ | 71,624 |
Total | $ | 72,418 |  |  | $ | (794) |  |  | $ | 71,624 |  |  | $ | — |  |  | $ | — |  |  | $ | 71,624 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | 794 |  |  | $ | (794) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total | $ | 794 |  |  | $ | (794) |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
| June 30, 2022
|  |  |  |  |  |  | Gross Amounts Not Offset |  |
| Gross Amount Recognized |  | Gross Amounts Offset |  | Net Amounts Presented |  | Financial Instruments |  | Cash Collateral Received (Posted) |  | Net Amount
| (In Thousands)
Assets: |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts | $ | 41,223 |  |  | $ | — |  |  | $ | 41,223 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,223 |
Total | $ | 41,223 |  |  | $ | — |  |  | $ | 41,223 |  |  | $ | — |  |  | $ | — |  |  | $ | 41,223 |
Credit Risk-Related Contingent Features The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations and could be required to terminate its derivative positions with the counterparty. The Company also has agreements with its derivative counterparties that contain a provision where if the Company fails to maintain its status as a well-capitalized institution, then the Company could be required to terminate its derivative positions with the counterparty. As of June 30, 2023, none of the Company’s derivatives were in a net liability position. As required under the enforceable master netting arrangement with its derivatives counterparties, at June 30, 2023 and June 30, 2022, the Company was not required to post financial collateral. In addition to the derivative instruments noted above, the Company’s pipeline of loans held for sale at June 30, 2023 and 2022, included $11.7 million and $20.3 million, respectively, of in process loans whose terms included interest rate locks to borrowers, which are considered free-standing derivative instruments whose fair values are not material to our financial condition or results of operations.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration