DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2014

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

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

			Weighted					Estimated
	Notional		Average	Weighted Average Rate				Fair Value
December 31, 2014	Amount		Maturity	Received		Contract pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Forward-starting interest rate swaps on FHLBB borrowings	300,000		4.3	—		2.29	%	(3,299		)
Total cash flow hedges	300,000							(3,299		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	12,554		14.9	0.52	%	5.09	%	(2,578		)
Interest rate swaps on loans with commercial loan customers	297,158		6.0	2.23	%	4.54	%	(12,183		)
Reverse interest rate swaps on loans with commercial loan customers	297,158		6.0	4.54	%	2.23	%	12,221
Risk participation agreements with dealer banks	45,842		16.6					(91		)
Forward sale commitments	42,366		0.2					(510		)
Total economic hedges	695,078							(3,141		)
Non-hedging derivatives:
Interest rate lock commitments	39,589		0.2					625
Total non-hedging derivatives	39,589							625
Total	$	1,034,667						$	(5,815	)

Information about interest rate swap agreements and non-hedging derivative asset and liabilities at December 31, 2013 follows:

			Weighted					Estimated
	Notional		Average	Weighted Average Rate				Fair Value
December 31, 2013	Amount		Maturity	Received		Contract pay rate		Asset (Liability)
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on FHLBB borrowings	$	150,000	2.5	0.25	%	2.61	%	$	(3,102	)
Forward-starting interest rate swaps on FHLBB borrowings	260,000		4.5	—		1.88	%	1,015
Interest rate swaps on junior subordinated notes	15,000		0.4	2.09	%	5.54	%	(203		)
Total cash flow hedges	425,000							(2,290		)
Economic hedges:
Interest rate swap on tax advantaged economic development bond	13,095		15.9	0.54	%	5.09	%	(1,889		)
Interest rate swaps on loans with commercial loan customers	206,933		5.4	2.44	%	4.68	%	(6,278		)
Reverse interest rate swaps on loans with commercial loan customers	206,933		5.4	4.68	%	2.44	%	6,286
Forward sale commitments	32,911		0.2					261
Total economic hedges	459,872							(1,620		)
Non-hedging derivatives:
Interest rate lock commitments	20,199		0.2					258
Total non-hedging derivatives	20,199							258
Total	$	905,071						$	(3,652	)

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)	2014			2013
Interest rate swaps on FHLBB borrowings:
Unrealized (loss) gain recognized in accumulated other comprehensive loss	$	(6,405	)	$	11,783
Reclassification of unrealized (loss) from accumulated other comprehensive loss to interest expense	—			(3,620		)
Reclassification of unrealized loss from accumulated other comprehensive loss to other non-interest expense for termination of swaps	8,630			943
Reclassification of unrealized deferred tax (benefit) from accumulated other comprehensive loss to tax expense for terminated swaps	(3,611		)	(489		)
Net tax benefit (expense) on items recognized in accumulated other comprehensive loss	2,583			(3,276		)
Interest rate swaps on junior subordinated notes:
Unrealized (loss) recognized in accumulated other comprehensive loss	(1		)	(18		)
Reclassification of unrealized loss from accumulated other comprehensive loss to interest expense	204			519
Net tax expense on items recognized in accumulated other comprehensive loss	(80		)	(197		)
Other comprehensive income recorded in accumulated other comprehensive loss, net of reclassification adjustments and tax effects	$	1,320		$	5,645
Net interest expense recognized in interest expense on hedged FHLBB borrowings	$	—		$	4,374
Net interest expense recognized in interest expense on junior subordinated notes	$	204		$	519

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

	Years Ended December 31,
(In thousands)	2014			2013
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized (loss) gain recognized in other non-interest income	$	(1,333	)	$	972
Interest rate swaps on loans with commercial loan customers:
Unrealized gain recognized in other non-interest income	(4,514		)	(6,004		)
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized loss recognized in other non-interest income	4,514			6,004
Favorable change in credit valuation adjustment recognized in other non-interest income	20			450
Risk Participation Agreements:
Unrealized loss recognized in other non-interest income	(91		)	—
Forward Commitments:
Unrealized (loss) gain recognized in other non-interest income	(510		)	261
Realized (loss) gain in other non-interest income	(1,494		)	7,501
Non-hedging derivatives
Interest rate lock commitments:
Unrealized gain recognized in other non-interest income	625			258
Realized gain (loss) in other non-interest income	$	3,938		$	(2,467	)

Schedule of assets subject to an enforceable master netting arrangement

Offsetting of Financial Assets and Derivative Assets

					Net Amounts
	Gross		Gross Amounts		of Assets		Gross Amounts Not Offset in the Statements
	Amounts of		Offset in the		Presented in the		of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
As of December 31, 2014
Interest Rate Swap Agreements:
Institutional counterparties	$	23	$	—	$	23	$	—	$	—	$	23
Commercial counterparties	12,270		—		12,270		—		—		12,270
Total	$	12,293	$	—	$	12,293	$	—	$	—	$	12,293

Offsetting of Financial Assets and Derivative Assets

					Net Amounts
	Gross		Gross Amounts		of Assets		Gross Amounts Not Offset in the Statements
	Amounts of		Offset in the		Presented in the		of Condition
	Recognized		Statements of		Statements of		Financial		Cash
(in thousands)	Assets		Condition		Condition		Instruments		Collateral Received		Net Amount
As of December 31, 2013
Interest Rate Swap Agreements:
Institutional counterparties	$	—	$	—	$	—	$	—	$	—	$	—
Commercial counterparties	7,799		—		7,799		—		—		7,799
Total	$	7,799	$	—	$	7,799	$	—	$	—	$	7,799

Schedule of liabilities subject to an enforceable master netting arrangement

Offsetting of Financial Liabilities and Derivative Liaibilities

						Net Amounts
	Gross			Gross Amounts		of Liabilities			Gross Amounts Not Offset in the Statements
	Amounts of			Offset in the		Presented in the			of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
As of December 31, 2014
Interest Rate Swap Agreements:
Institutional counterparties	$	(18,232	)	$	58	$	(18,174	)	$	14,984	$	3,190	$	—
Commercial counterparties	(50		)	—		(50		)	—		—		(50		)
Total	$	(18,282	)	$	58	$	(18,224	)	$	14,984	$	3,190	$	(50	)

Offsetting of Financial Liabilities and Derivative Liaibilities

						Net Amounts
	Gross			Gross Amounts		of Liabilities			Gross Amounts Not Offset in the Statements
	Amounts of			Offset in the		Presented in the			of Condition
	Recognized			Statements of		Statements of			Financial		Cash
(in thousands)	Liabilities			Condition		Condition			Instruments		Collateral Pledged		Net Amount
As of December 31, 2013
Interest Rate Swap Agreements:
Institutional counterparties	$	(13,157	)	$	1,913	$	(11,244	)	$	9,544	$	1,700	$	—
Commercial counterparties	(720		)	—		(720		)	—		—		(720		)
Total	$	(13,877	)	$	1,913	$	(11,964	)	$	9,544	$	1,700	$	(720	)