
June 30, 2024	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	$	978,203	$	63,374	Other liabilities	$	978,203	$	64,075
Commercial loan fair value hedges	Other assets	37,042		2,534		Other liabilities	—		—
Mortgage loan fair value hedges	Other assets	2,670,000		59,243		Other liabilities	—		—
Borrowings cash flow hedges	Other assets	1,000,000		151,333		Other liabilities	—		—
		$	4,685,245	$	276,484		$	978,203	$	64,075


September 30, 2023	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	$	806,744	$	78,797	Other liabilities	$	806,744	$	79,668
Commercial loan fair value hedges	Other assets	39,661		3,405		Other liabilities	—		—
Mortgage loan fair value hedges	Other assets	670,000		46,396		Other liabilities	—		—
Borrowings cash flow hedges	Other assets	1,000,000		184,373		Other liabilities	—		—
		$	2,516,405	$	312,971		$	806,744	$	79,668

The Company enters into interest rate swaps to hedge interest rate risk. These arrangements include hedges of individual fixed rate commercial loans and also hedges of a specified portion of pools of prepayable fixed rate mortgage loans under the "portfolio layer" method. These relationships qualify as fair value hedges under FASB ASC 815, Derivatives and Hedging ("ASC 815"), which provides for offsetting of the recognition of gains and losses of the respective interest rate swap and the hedged items. Gains and losses on interest rate swaps designated in these hedge relationships, along with the offsetting gains and losses on the hedged items attributable to the hedged risk, are recognized in current earnings within the same income statement line item.

Upon electing to apply ASC 815 fair value hedge accounting, the carrying value of the hedged item is adjusted to reflect the cumulative impact of changes in fair value attributable to the hedged risk. The hedge basis adjustment remains with the hedged item until the hedged item is de-recognized from the balance sheet. The following tables present the impact of fair value hedge accounting on the carrying value of the hedged items at June 30, 2024 and September 30, 2023.


(In thousands)	June 30, 2024
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)	$	7,385,202	$	(40,379)
	$	7,385,202	$	(40,379)

(1) Includes the amortized cost basis of the closed mortgage loan portfolios used to designate the hedging relationships in which the hedged items are a portfolio layer expected to be remaining at the end of the hedging relationships. At June 30, 2024, the amortized cost basis of the closed loan portfolios used in the hedging relationships was

$7,350,681,000, the cumulative basis adjustment associated with the hedging relationships was $(37,908,000), and the amount of the designated hedged items was $2,670,000,000. During the three and nine months ended June 30, 2024, hedge accounting was discontinued on a $300,000,000 last of layer hedge. A basis adjustment of $1,232,211 associated with the terminated portion of the hedge will be accreted 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 June 30, 2024, the amortized cost basis of the hedged commercial loans was $34,521,000 and the cumulative basis adjustment associated with the hedging relationships was $(2,471,000).


(In thousands)	September 30, 2023
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)	$	1,816,870	$	(48,865)
	$	1,816,870	$	(48,865)

(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, 2023, the amortized cost basis of the closed loan portfolios used in the hedging relationships was $1,780,503,000, the cumulative basis adjustment associated with the hedging relationships was $(45,622,000), and the amount of the designated hedged items was $670,000,000.

(2) Includes the amortized cost basis of commercial loans designated in fair value hedging relationships. At September 30, 2023, the amortized cost basis of the hedged commercial loans was $36,367,000 and the cumulative basis adjustment associated with the hedging relationships was $(3,243,000).

The Company has entered into interest rate swaps to convert certain short-term borrowings to fixed rate payments. The primary purpose of these hedges is to mitigate the risk of changes in future cash flows resulting from increasing interest rates. For qualifying cash flow hedges under ASC 815, gains and losses on the interest rate swaps are recorded in accumulated other comprehensive income ("AOCI") and then reclassified into earnings in the same period the hedged cash flows affect earnings and within the same income statement line item as the hedged cash flows. As of June 30, 2024, the maturities for hedges of adjustable-rate borrowings ranged from four months to six years, with the weighted average being 5 years.


(In thousands)	Three Months Ended June 30,
Amount of gain/(loss) recognized in AOCI on derivatives in cash flow hedging relationships	2024		2023
Interest rate contracts:
Pay fixed/receive floating swaps on borrowings cash flow hedges	$	(3,256)	$	14,757

Total pre-tax gain/(loss) recognized in AOCI	$	(3,256)	$	14,757


(In thousands)	Nine Months Ended June 30,
Amount of gain/(loss) recognized in AOCI on derivatives in cash flow hedging relationships	2024		2023
Interest rate contracts:
Pay fixed/receive floating swaps on borrowings cash flow hedges	$	(33,040)	$	(14,021)

Total pre-tax gain/(loss) recognized in AOCI	$	(33,040)	$	(14,021)


	Three Months Ended June 30, 2024				Three Months Ended June 30, 2023
	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	$	337,118	$	(60,396)	$	232,167	$	(33,718)

Gain/(loss) on fair value hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives	$	13,113			$	4,348
Recognized on derivatives	3,044				13,223
Recognized on hedged items	(1,972)				(13,195)
Net income/(expense) recognized on fair value hedges	$	14,185			$	4,376

Gain/(loss) on cash flow hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives			$	11,718			$	10,639
Amount of derivative gain/(loss) reclassified from AOCI into interest income/expense			—				—
Net income/(expense) recognized on cash flow hedges			$	11,718			$	10,639


	Nine Months Ended June 30, 2024				Nine Months Ended June 30, 2023
	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	$	857,251	$	(142,399)	$	659,070	$	(80,877)

Gain/(loss) on fair value hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives	$	27,123			$	11,753
Recognized on derivatives	(6,937)				3,766
Recognized on hedged items	7,254				(3,367)
Net income/(expense) recognized on fair value hedges	$	27,440			$	12,152

Gain/(loss) on cash flow hedging relationships:
Interest rate contracts
Amounts related to interest settlements on derivatives			$	35,279			$	27,370
Amount of derivative gain/(loss) reclassified from AOCI into interest income/expense			—				—
Net income/(expense) recognized on cash flow hedges			$	35,279			$	27,370

The Company periodically enters into certain interest rate swap agreements in order to provide commercial loan customers the ability to convert from variable to fixed interest rate payments, while the Company retains a variable rate loan. Under these agreements, the Company enters into a variable rate loan agreement and a swap agreement with the client. The swap agreement effectively converts the client’s variable rate loan into a fixed rate. The Company enters into a corresponding swap agreement with a third party in order to offset its exposure on the variable and fixed components of the client's swap agreement. The interest rate swaps are derivatives under ASC 815, with changes in fair value recorded in earnings. The impact to the statement of operations was an increase in other income of $169,000 for the nine months ended June 30, 2024 and a decrease of $900,000 for the nine months ended June 30, 2023.


(In thousands)		Three Months Ended June 30,
Derivative instruments	Classification of gain/(loss) recognized in income on derivative instrument	2024		2023
Interest rate contracts:
Pay fixed/receive floating swap	Other noninterest income	$	(715)	$	12,612
Receive fixed/pay floating swap	Other noninterest income	770		(13,538)
		$	55	$	(926)


(In thousands)		Nine Months Ended June 30,
Derivative instruments	Classification of gain/(loss) recognized in income on derivative instrument	2024		2023
Interest rate contracts:
Pay fixed/receive floating swap	Other noninterest income	$	(18,410)	$	(2,409)
Receive fixed/pay floating swap	Other noninterest income	18,579		1,509
		$	169	$	(900)