Reverse Repurchase Agreements

Effective January 1, 2015, we adopted the guidance in Accounting Standards Update, or ASU, 2014-11, “Transfers and Servicing (Topic 860) — Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures,” which applies to all entities that enter into repurchase-to-maturity transactions or repurchase financings (reverse repurchase agreements or securities sold under agreements to repurchase). The amendments in this update changed the accounting for repurchase-to-maturity transactions and linked repurchase financings (a transfer of a financial asset executed contemporaneously with a repurchase agreement with the same counterparty) to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. All of our repurchase agreements (reverse repurchase agreements) are accounted for as secured borrowings. Therefore, our adoption of this guidance did not have an impact on our financial condition or results of operations. In addition, effective for interim periods beginning after March 15, 2015, the amendments in this update require an entity to disclose information on transfers accounted for as sales in transactions that are economically similar to repurchase agreements, which for us is not applicable as we have no such transfers. The amendments in this guidance also require, effective for interim periods beginning after March 15, 2015, the following disclosures to increase transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.

The following table details the remaining contractual maturities of our reverse repurchase agreements at September 30, 2015.



Year		Amount
	(In Thousands)
2018		$	200,000	(1	)
2019		600,000		(1	)
2020		300,000		(2	)
Total		$	1,100,000


(1)	Callable in 2015.


(2)	Includes $100.0 million of borrowings which are callable in 2015, $100.0 million of borrowings which are callable in 2016 and $100.0 million of borrowings which are callable in 2017.

The outstanding reverse repurchase agreements at September 30, 2015 were fixed rate and collateralized by GSE securities, of which 83% were residential mortgage-backed securities and 17% were obligations of GSEs. Securities collateralizing these agreements are classified as encumbered securities in the consolidated statements of financial condition. The amount of excess collateral required is governed by each individual contract. The primary risk associated with these secured borrowings is the requirement to pledge a market value based balance of collateral in excess of the borrowed amount. The excess collateral pledged represents an unsecured exposure to the lending counterparty. As the market value of the collateral changes, both through changes in discount rates and spreads as well as related cash flows, additional collateral may need to be pledged. In accordance with our policies, eligible counterparties are defined and monitored to minimize our exposure.