DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2012

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Schedule of interest rate swap agreements and non-hedging derivative assets and liabilities

Information about interest rate swap agreements and non-hedging derivative assets and liabilities at December 31, 2012, follows:

			Weighted					Estimated
	Notional		Average	Weighted Average Rate				Fair Value
	Amount		Maturity	Received		Paid		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	115,000	1.6	0.35	%	3.47	%	$	(4,608	)
Forward-starting interest rate swaps on FHLBB borrowings	140,000		5.4			2.37	%	(5,810		)
Interest rate swaps on junior subordinated debentures	15,000		1.4	2.16	%	5.54	%	(704		)
Total cash flow hedges	270,000							(11,122		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	13,609		16.9	0.58	%	5.09	%	(3,473		)
Interest rate swaps on loans with commercial loan customers	205,319		5.1	2.54	%	5.28	%	(15,219		)
Reverse interest rate swaps on loans with commercial loan customers	205,319		5.1	5.28	%	0.11	%	14,746
Forward Commitments	335,548		0.1					(1,336		)
Total economic hedges	759,795							(5,282		)
Non-hedging derivatives:
Interest Rate Lock Commitments	282,752		0.2					6,258
Total non-hedging derivatives	282,752							6,258
Total	$	1,312,547						$	(10,146	)

Information about interest rate swap agreements and non-hedging derivative asset and liabilities at year-end 2011 follows:

			Weighted					Estimated
	Notional		Average	Weighted Average Rate				Fair Value
	Amount		Maturity	Received		Paid		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	105,000	1.7	0.49	%	4.00	%	$	(5,888	)
Forward-starting interest rate swaps on FHLBB borrowings	80,000		3.5	—		2.56	%	(2,064		)
Interest rate swaps on junior subordinated debentures	15,000		2.4	2.35	%	5.54	%	(1,055		)
Total cash flow hedges	200,000							(9,007		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	14,096		17.9	0.64	%	5.09	%	(3,505		)
Interest rate swaps on loans with commercial loan customers	160,389		5.6	2.73	%	5.77	%	(14,351		)
Reverse interest rate swaps on loans with commercial loan customers	160,389		5.6	5.77	%	2.73	%	13,871
Forward commitments	21,538		0.2					55
Total economic hedges	356,412							(3,930		)
Non-hedging derivatives:
Interest rate lock commitments	21,538		0.2					(66		)
Total non-hedging derivatives	21,538							(66		)
Total	$	577,950						$	(13,003	)

Schedule of amounts included in the consolidated statements of income and in the other comprehensive income section of the consolidated statements of comprehensive income

	Years Ended December 31,
(In thousands)	2012			2011
Interest rate swaps on FHLBB borrowings:
Unrealized (loss) gain recognized in accumulated other comprehensive loss	$	(2,465	)	$	212
Reclassification of unrealized loss from accumulated other comprehensive loss to non-interest income for hedge ineffectiveness	42			42
Reclassification of realized gain from accumulated other comprehensive loss to other non-interest income for termination of swaps	942			942
Reclassification of unrealized deferred tax benefit from accumulated other comprehensive loss to tax expense for terminated swaps	(324		)	(391		)
Net tax benefit on items recognized in accumulated other comprehensive loss	846			(114		)
Interest rate swaps on junior subordinated debentures:
Unrealized gain recognized in accumulated other comprehensive loss	351			87
Net tax expense on items recognized in accumulated other comprehensive loss	(157		)	(37		)
Other comprehensive (loss) income recorded in accumulated other comprehensive loss, net of reclassification adjustments and tax effects	$	(765	)	$	741
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$	4,476		$	4,870
Net interest expense recognized in interest expense on junior subordinated debentures	$	490		$	516

Schedule of amounts included in the consolidated statements of income related to economic hedges and non-hedging derivatives

	Years Ended December 31,
(In thousands)	2012			2011
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized (loss) recognized in other non-interest income	$	(660	)	$	(727	)
Interest rate swaps on loans with commercial loan customers:
Unrealized gain recognized in other non-interest income	3,053			6,977
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized loss recognized in other non-interest income	(3,053		)	(6,977		)
(Unfavorable) favorable change in credit valuation adjustment recognized in other non-interest income	43			(512		)
Forward Commitments:
Unrealized loss recognized in other non-interest income	(1,336		)	(358		)
Realized loss in other non-interest income	(7,495		)	—
Non-hedging derivatives
Interest rate lock commitments:
Unrealized gain recognized in other non-interest income	6,258			311
Realized gain in other non-interest income	$	14,429		$	—