| Derivative Financial Instruments |
Derivative Financial Instruments The following table summarizes the total fair value, including interest accruals, and outstanding notional amounts of derivative instruments as of June 30, 2026 and June 30, 2025 (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | June 30, 2025 | | Notional Amount | | Derivative Assets | | Derivative Liabilities | | Notional Amount | | Derivative Assets | | Derivative Liabilities | | Derivatives designated as cash flow hedges | | Interest rate contracts | $ | 1,000,000 | | | $ | 840 | | | $ | 4 | | | $ | 100,000 | | | $ | 86 | | | $ | — | | | Derivatives not designated as hedges | | Interest rate contracts | 626,978 | | | 3,009 | | | 61 | | | 405,074 | | | 2,558 | | | 15 | | | Risk sharing arrangements | 4,209,585 | | | 30,301 | | | — | | | 8,561,709 | | | 43,179 | | | 90 | | | Total gross derivative assets/liabilities | $ | 5,836,564 | | | $ | 34,150 | | | $ | 65 | | | $ | 9,066,783 | | | $ | 45,823 | | | $ | 105 | |
The following table summarizes the impact of the cash flow hedges on Accumulated Other Comprehensive Income (Loss) (“AOCI”) (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | Year ended June 30, | | | 2026 | | 2025 | | 2024 | | Balance at beginning of period | | $ | (1,419) | | | $ | 1,407 | | | $ | 751 | | | Changes in fair value | | 5,050 | | | (2,312) | | | 2,000 | | Amounts reclassified into earnings (1) | | 397 | | | (514) | | | (1,344) | | Balance at end of period (2) | | $ | 4,028 | | | $ | (1,419) | | | $ | 1,407 | |
(1)The amounts reclassified into earnings are presented in the consolidated statements of income (loss) within funding costs. (2)As of June 30, 2026, we estimated that $1.5 million of net derivative gains included in AOCI are expected to be reclassified into earnings within the next 12 months.
The following table summarizes the recognized gains and losses related to the derivative instruments and indicates where within the consolidated statements of operations and comprehensive income (loss) such gain or loss is reported (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | Year ended June 30, | | Location of gains (losses) where the effects of derivatives are recorded | | 2026 | | 2025 | | 2024 | | The effects of cash flow hedging | | Interest rate contracts | Funding costs | | (397) | | | 514 | | | 1,344 | | | The effects of derivatives not designated as hedging instruments | | Interest rate contracts | Other income, net | | 129 | | | (4,319) | | | 4,479 | | | Risk sharing arrangements | Gain on sales of loans | | 26,952 | | | 29,658 | | | 32,966 | |
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