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Fair Value Measurements (Tables)
 9 Months Ended
Jun. 30, 2018
Fair Value Disclosures [Abstract]  
Fair Value of Assets Measured on Recurring Basis
The following tables present the balance of assets and liabilities measured at fair value on a recurring basis.
 
June 30, 2018
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Financial Assets
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Equity securities
$
491

 
$
—

 
$
—

 
$
491

U.S. government and agency securities
—

 
216,009

 
—

 
216,009

Municipal bonds
—

 
22,755

 
—

 
22,755

Corporate debt securities
—

 
184,232

 
—

 
184,232

Mortgage-backed securities
 
 
 
 
 
 
 
Agency pass-through certificates
—

 
828,449

 
—

 
828,449

Commercial MBS
—

 
3,465

 
—

 
3,465

Total available-for-sale securities
491

 
1,254,910

 
—

 
1,255,401

Interest rate contracts
—

 
10,141

 
—

 
10,141

Commercial loan hedges
—

 
3,005

 
—

 
3,005

Borrowings hedges
—

 
19,193

 
—

 
19,193

Total financial assets
$
491

 
$
1,287,249

 
$
—

 
$
1,287,740

 
 
 
 
 
 
 
 
Financial Liabilities
 
 
 
 
 
 
 
Interest rate contracts
$
—

 
$
10,141

 
$
—

 
$
10,141

Total financial liabilities
$
—

 
$
10,141

 
$
—

 
$
10,141


There were no transfers between, into and/or out of Levels 1, 2 or 3 during the nine months ended June 30, 2018.
 
September 30, 2017
 
Level 1
 
Level 2
 
Level 3
 
Total
 
(In thousands)
Financial Assets
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
Equity securities
$
522

 
$
—

 
$
—

 
$
522

U.S. government and agency securities
—

 
211,077

 
—

 
211,077

Municipal bonds
—

 
26,624

 
—

 
26,624

Corporate debt securities
—

 
185,298

 
—

 
185,298

Mortgage-backed securities
 
 
 
 
 
 
 
Agency pass-through certificates
—

 
834,297

 
—

 
834,297

Commercial MBS
—

 
8,391

 
—

 
8,391

Total available-for-sale securities
522

 
1,265,687

 
—

 
1,266,209

Interest rate contracts
—

 
1,139

 
—

 
1,139

Total financial assets
$
522

 
$
1,266,826

 
$
—

 
$
1,267,348

 
 
 
 
 
 
 
 
Financial Liabilities
 
 
 
 
 
 
 
Interest rate contracts
$
—

 
$
1,139

 
$
—

 
$
1,139

Commercial loan hedges
—

 
174

 
—

 
174

Borrowings hedges
—

 
1,693

 
—

 
1,693

Total financial liabilities
$
—

 
$
3,006

 
$
—

 
$
3,006
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 that were measured at fair value on a nonrecurring basis at June 30, 2018 and June 30, 2017, and the total gains (losses) resulting from those fair value adjustments for the three and nine months ended June 30, 2018 and June 30, 2017. The estimated fair value measurements are shown gross of estimated selling costs.
 
 
June 30, 2018
 
Three Months Ended June 30, 2018
 
Nine Months Ended June 30, 2018
 
Level 1
 
Level  2
 
Level  3
 
Total
 
Total Gains (Losses)
 
(In thousands)
 
(In thousands)
Impaired loans (1)
$
—

 
$
—

 
$
15,125

 
$
15,125

 
$
(3,120
)
 
$
(4,094
)
Real estate owned (2)
—

 
—

 
6,354

 
6,354

 
(97
)
 
(656
)
Balance at end of period
$
—

 
$
—

 
$
21,479

 
$
21,479

 
$
(3,217
)
 
$
(4,750
)

(1)
The gains (losses) represent remeasurements of collateral-dependent loans.
(2)
The gains (losses) represent aggregate writedowns and charge-offs on REO.

 
June 30, 2017
 
Three Months Ended June 30, 2017
 
Nine Months Ended June 30, 2017
 
Level 1
 
Level  2
 
Level  3
 
Total
 
Total Gains (Losses)
 
(In thousands)
 
(In thousands)
Impaired loans (1)
$
—

 
$
—

 
$
7,807

 
$
7,807

 
$
(305
)
 
$
(1,666
)
Real estate owned (2)
—

 
—

 
9,777

 
9,777

 
(467
)
 
(1,087
)
Balance at end of period
$
—

 
$
—

 
$
17,584

 
$
17,584

 
$
(772
)
 
$
(2,753
)

(1)
The gains (losses) represent remeasurements of collateral-dependent loans.
(2)
The gains (losses) represent aggregate writedowns and charge-offs on REO.
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. 
 
 
 
 
June 30, 2018
 
September 30, 2017
 
 
Level in Fair Value Hierarchy
 
Carrying
Amount
 
Estimated
Fair Value
 
Carrying
Amount
 
Estimated
Fair Value
 
 
 
 
($ in thousands)
Financial assets
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
1
 
$
345,919

 
$
345,919

 
$
313,070

 
$
313,070

Available-for-sale securities
 
 
 
 
 
 
 
 
 
 
Equity securities
 
1
 
491

 
491

 
522

 
522

U.S. government and agency securities
 
2
 
216,009

 
216,009

 
211,077

 
211,077

Municipal bonds
 
2
 
22,755

 
22,755

 
26,624

 
26,624

Corporate debt securities
 
2
 
184,232

 
184,232

 
185,298

 
185,298

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
 
2
 
828,449

 
828,449

 
834,297

 
834,297

Commercial MBS
 
2
 
3,465

 
3,465

 
8,391

 
8,391

Total available-for-sale securities
 
 
 
1,255,401

 
1,255,401

 
1,266,209

 
1,266,209

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
 
2
 
1,655,450

 
1,595,034

 
1,646,856

 
1,635,913

                           Commercial MBS
 
2
 
15,000

 
15,000

 
—

 
—

Total held-to-maturity securities
 
 
 
1,670,450

 
1,610,034

 
1,646,856

 
1,635,913

 
 
 
 
 
 
 
 
 
 
 
Loans receivable
 
3
 
11,325,971

 
11,492,022

 
10,882,622

 
11,247,586

FDIC indemnification asset
 
3
 
—

 
—

 
8,968

 
8,564

FHLB and FRB stock
 
2
 
128,790

 
128,790

 
122,990

 
122,990

        Other assets - interest rate contracts
 
2
 
10,141

 
10,141

 
1,139

 
1,139

        Other assets - commercial loan hedges
 
2
 
3,005

 
3,005

 
—

 
—

        Other assets - borrowings hedges
 
2
 
19,193

 
19,193

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Financial liabilities
 
 
 
 
 
 
 
 
 
 
Customer accounts
 
2
 
11,287,473

 
10,924,562

 
10,835,008

 
10,411,686

FHLB advances
 
2
 
2,370,000

 
2,365,478

 
2,225,000

 
2,266,791

        Other liabilities - interest rate contracts
 
2
 
10,141

 
10,141

 
1,139

 
1,139

Other liabilities - commercial loan hedges
 
2
 
—

 
—

 
174

 
174

        Other liabilities - borrowings hedges
 
2
 
—

 
—

 
1,693

 
1,693

The following table presents the fair value and balance sheet classification of derivatives at June 30, 2018 and September 30, 2017:
 
 
Asset Derivatives
 
Liability Derivatives
 
 
June 30, 2018
 
September 30, 2017
 
June 30, 2018
 
September 30, 2017
 
 
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
 
$
10,141

 
Other assets
 
$
1,139

 
Other liabilities
 
$
10,141

 
Other liabilities
 
$
1,139

Commercial loan hedges
 
Other assets
 
3,005

 
Other assets
 
—

 
Other liabilities
 
—

 
Other liabilities
 
174

Borrowings hedges
 
Other assets
 
19,193

 
Other assets
 
—

 
Other liabilities
 
—

 
Other liabilities
 
1,693

 
 
 
 
$
32,339

 
 
 
$
1,139

 
 
 
$
10,141

 
 
 
$
3,006
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.
 
June 30, 2018
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Yield
 
Gains
 
Losses
 
 
($ in thousands)
Available-for-sale securities

 
 
 
 
 
 
 
 
U.S. government and agency securities due
 
 
 
 
 
 
 
 
 
5 to 10 years
$
63,986

 
$
—

 
$
(1,678
)
 
$
62,308

 
2.41
%
Over 10 years
153,928

 
122

 
(349
)
 
153,701

 
2.71

Equity securities due
 
 
 
 
 
 
 
 
 
1 to 5 years
500

 
—

 
(9
)
 
491

 
1.80

Corporate debt securities due
 
 
 
 
 
 
 
 
 
1 to 5 years
113,727

 
1,687

 
(273
)
 
115,141

 
3.60

5 to 10 years
69,964

 
—

 
(873
)
 
69,091

 
3.23

Municipal bonds due
 
 
 
 
 
 
 
 
 
1 to 5 years
1,390

 
—

 
(10
)
 
1,380

 
2.05

Over 10 years
20,328

 
1,047

 
—

 
21,375

 
6.45

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
836,777

 
1,563

 
(9,891
)
 
828,449

 
3.34

Commercial MBS
3,460

 
5

 
—

 
3,465

 
4.27

 
1,264,060

 
4,424

 
(13,083
)
 
1,255,401

 
3.28

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,655,450

 
635

 
(61,051
)
 
1,595,034

 
3.16

Commercial MBS
15,000

 
—

 
—

 
15,000

 
2.94

 
1,670,450

 
635

 
(61,051
)
 
1,610,034

 
3.16

 
$
2,934,510

 
$
5,059

 
$
(74,134
)
 
$
2,865,435

 
3.21
%
 
 
September 30, 2017
 
Amortized
Cost
 
Gross Unrealized
 
Fair
Value
 
Yield
 
Gains
Losses
 
 
($ in thousands)
Available-for-sale securities
 
 
 
 
 
 
 
 
 
U.S. government and agency securities due
 
 
 
 
 
 
 
 
 
Within 1 year
$
9,300

 
$
146

 
$
—

 
$
9,446

 
10.38
%
1 to 5 years
5,688

 
2

 
—

 
5,690

 
1.51

5 to 10 years
69,108

 
—

 
(1,238
)
 
67,870

 
1.93

Over 10 years
127,936

 
353

 
(218
)
 
128,071

 
1.92

Equity securities
 
 
 
 
 
 
 
 
 
1 to 5 years
500

 
22

 
—

 
522

 
1.80

Corporate bonds due
 
 
 
 
 
 
 
 
 
1 to 5 years
63,622

 
2,083

 
—

 
65,705

 
2.96

5 to 10 years
119,960

 
210

 
(577
)
 
119,593

 
2.62

Municipal bonds due
 
 
 
 
 
 
 
 
 
Within 1 year
2,344

 
10

 
—

 
2,354

 
1.23

1 to 5 years
1,367

 
55

 
—

 
1,422

 
2.05

Over 10 years
20,343

 
2,505

 
—

 
22,848

 
6.45

Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
828,069

 
8,402

 
(2,174
)
 
834,297

 
2.96

Commercial MBS
8,350

 
41

 
—

 
8,391

 
3.31

 
1,256,587

 
13,829

 
(4,207
)
 
1,266,209

 
2.86

Held-to-maturity securities
 
 
 
 
 
 
 
 
 
Mortgage-backed securities
 
 
 
 
 
 
 
 
 
Agency pass-through certificates
1,646,856

 
7,143

 
(18,086
)
 
1,635,913

 
3.14

 
1,646,856

 
7,143

 
(18,086
)
 
1,635,913

 
3.14

 
$
2,903,443

 
$
20,972

 
$
(22,293
)
 
$
2,902,122

 
3.02
%
Schedule of Unrealized Losses and Fair Value of Securities
The following tables show the unrealized gross losses and fair value of securities as of June 30, 2018 and September 30, 2017, by length of time that individual securities in each category have been in a continuous loss position. The decline in fair value since purchase 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.
 
June 30, 2018
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 debt securities
$
—

 
$
—

 
$
(1,146
)
 
$
118,818

 
$
(1,146
)
 
118,818

Municipal bonds
(10
)
 
1,380

 
—

 
—

 
(10
)
 
1,380

U.S. government and agency securities
(64
)
 
43,310

 
(1,963
)
 
120,006

 
(2,027
)
 
163,316

Equity securities
(9
)
 
491

 
—

 
—

 
(9
)
 
491

Agency pass-through certificates
(13,696
)
 
706,627

 
(57,246
)
 
1,401,192

 
(70,942
)
 
2,107,819

 
$
(13,779
)
 
$
751,808

 
$
(60,355
)
 
$
1,640,016

 
$
(74,134
)
 
$
2,391,824



September 30, 2017
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 debt securities
$
—

 
$
—

 
$
(577
)
 
$
49,423

 
$
(577
)
 
$
49,423

U.S. government and agency securities
(759
)
 
24,400

 
(697
)
 
96,195

 
(1,456
)
 
120,595

Agency pass-through certificates
(17,683
)
 
1,163,358

 
(2,577
)
 
249,304

 
(20,260
)
 
1,412,662

 
$
(18,442
)
 
$
1,187,758

 
$
(3,851
)
 
$
394,922

 
$
(22,293
)
 
$
1,582,680