Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amount and fair value of derivative instruments

The following table reflects the notional amount and fair value of derivative instruments included on the Company’s Unaudited Condensed Consolidated Balance Sheets on a gross basis.

	September 30, 2020						December 31, 2019
			Fair Value						Fair Value
	Notional Amount		Derivative Assets (1)		Derivative Liabilities (2)		Notional Amount		Derivative Assets (1)		Derivative Liabilities (2)
	(In Thousands)
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate swaps related to long-term debt	$	3,496,086	$	12,408	$	837	$	3,623,950	$	10,633	$	354
Total fair value hedges			12,408		837				10,633		354
Cash flow hedges:
Interest rate contracts:
Swaps related to commercial loans	10,000,000		—		—		10,000,000		—		—
Swaps related to FHLB advances	120,000		—		3,000		120,000		—		2,864
Foreign currency contracts:
Forwards related to currency fluctuations	1,178		—		87		2,597		102		—
Total cash flow hedges			—		3,087				102		2,864
Total derivatives designated as hedging instruments			$	12,408	$	3,924			$	10,735	$	3,218
Free-standing derivatives not designated as hedging instruments:
Interest rate contracts:
Forward contracts related to held for sale mortgages	$	794,989	$	638	$	1,993	$	289,990	$	148	$	514
Option contracts related to mortgage servicing rights	—		—		—		60,000		38		—
Interest rate lock commitments	636,349		16,305		—		146,941		3,088		—
Equity contracts:
Purchased equity option related to equity-linked CDs	50,831		774		—		152,130		4,460		—
Written equity option related to equity-linked CDs	41,065		—		625		128,620		—		3,765
Foreign exchange contracts:
Forwards and swaps related to commercial loans	385,230		2,678		1,883		443,493		167		3,872
Spots related to commercial loans	336		—		1		48,626		7		68
Swap associated with sale of Visa, Inc. Class B shares	172,368		—		6,435		161,904		—		5,904
Futures contracts (3)	2,240,000		—		—		2,110,000		—		—
Trading account assets and liabilities:
Interest rate contracts for customers	40,169,859		711,389		155,542		35,503,973		313,573		97,881
Foreign exchange contracts for customers	1,400,345		37,928		35,640		1,039,507		22,766		20,678
Total trading account assets and liabilities			749,317		191,182				336,339		118,559
Total free-standing derivative instruments not designated as hedging instruments			$	769,712	$	202,119			$	344,247	$	132,682

(1) Derivative assets, except for trading account assets that are recorded as a component of trading account assets on the Company's Unaudited Condensed Consolidated Balance Sheets, are recorded in other assets on the Company’s Unaudited Condensed Consolidated Balance Sheets.

(2) Derivative liabilities are recorded in accrued expenses and other liabilities on the Company’s Unaudited Condensed Consolidated Balance Sheets.

(3) Changes in fair value are cash settled daily; therefore, there is no ending balance at any given reporting period.

Schedule of hedging derivative instruments

The following table presents the effect of hedging derivative instruments on the Company’s Unaudited Condensed Consolidated Statements of Income.

	Interest Income			Interest Expense
	Interest and fees on loans			Interest on FHLB and other borrowings
	(In Thousands)
Three Months Ended September 30, 2020
Total amounts presented in the unaudited condensed consolidated statements of income	$	644,643		$	14,644
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements and amortization on derivatives	$	—		$	12,247
Recognized on derivatives	—			(12,407		)
Recognized on hedged items	—			12,058
Net income (expense) recognized on fair value hedges	$	—		$	11,898
Gain (losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	43,671		$	(832	)
Net income (expense) recognized on cash flow hedges	$	43,671		$	(832	)
Three Months Ended September 30, 2019
Total amounts presented in the unaudited condensed consolidated statements of income	$	771,245		$	32,975
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements and amortization on derivatives	$	—		$	(136	)
Recognized on derivatives	—			9,369
Recognized on hedged items	—			(8,999		)
Net income (expense) recognized on fair value hedges	$	—		$	234
Gain (losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized losses reclassified from AOCI into net income (2)	$	(295	)	$	(254	)
Net income (expense) recognized on cash flow hedges	$	(295	)	$	(254	)

(1) See Note 10, Comprehensive Income, for gain or loss recognized for cash flow hedges in accumulated other comprehensive income.

(2) Pre-tax

	Interest Income			Interest Expense
	Interest and fees on loans			Interest on FHLB and other borrowings
	(In Thousands)
Nine Months Ended September 30, 2020
Total amounts presented in the unaudited condensed consolidated statements of income	$	2,029,886		$	57,756
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements and amortization on derivatives	$	—		$	21,906
Recognized on derivatives	—			100,598
Recognized on hedged items	—			(95,575		)
Net income (expense) recognized on fair value hedges	$	—		$	26,929
Gain (losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	82,963		$	(1,841	)
Net income (expense) recognized on cash flow hedges	$	82,963		$	(1,841	)
Nine Months Ended September 30, 2019
Total amounts presented in the unaudited condensed consolidated statements of income	$	2,359,500		$	104,901
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements and amortization on derivatives	$	—		$	(4,192	)
Recognized on derivatives	—			76,315
Recognized on hedged items	—			(72,510		)
Net income (expense) recognized on fair value hedges	$	—		$	(387	)
Gain (losses) on cash flow hedging relationships: (1)
Interest rate contracts:
Realized losses reclassified from AOCI into net income (2)	$	(2,765	)	$	(584	)
Net income (expense) recognized on cash flow hedges	$	(2,765	)	$	(584	)

(1) See Note 10, Comprehensive Income, for gain or loss recognized for cash flow hedges in accumulated other comprehensive income.

(2) Pre-tax

Schedule of fair value hedging instruments

The following table presents the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities on the Company's Unaudited Condensed Consolidated Balance Sheets in fair value hedging relationships.

			Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Liabilities
	Carrying Amount of Hedged Liabilities		Hedged Items Currently Designated		Hedged Items No Longer Designated
	(In Thousands)
September 30, 2020
FHLB and other borrowings	$	3,259,422	$	120,610	$	1,224
December 31, 2019
FHLB and other borrowings	$	3,483,177	$	25,092	$	1,883

Schedule of other derivatives not designated as hedging instruments

The net gains and losses recorded in the Company's Unaudited Condensed Consolidated Statements of Income from free-standing derivative instruments not designated as hedging instruments are summarized in the following table.

		Gain (Loss) for the
	Condensed Consolidated	Three Months Ended September 30,						Nine Months Ended September 30,
	Statements of Income Caption	2020			2019			2020			2019
		(In Thousands)
Futures contracts	Mortgage banking income  and corporate and correspondent investment sales	$	(12	)	$	14		$	(764	)	$	(1,365	)
Interest rate contracts:
Interest rate lock commitments	Mortgage banking income	(4,438		)	191			13,217			2,026
Option contracts related to mortgage servicing rights	Mortgage banking income	—			285			1,528			1,313
Forward contracts related to residential mortgage loans held for sale	Mortgage banking income	2,115			530			(989		)	481
Interest rate contracts for customers	Corporate and correspondent investment sales	(62		)	7,398			18,762			13,490
Equity contracts:
Purchased equity option related to equity-linked CDs	Other expense	(1,094		)	(2,187		)	(3,686		)	(7,196		)
Written equity option related to equity-linked CDs	Other expense	930			1,942			3,140			6,469
Foreign currency contracts:
Forward and swap contracts related to commercial loans	Other income	(15,885		)	13,787			(4,694		)	15,484
Spot contracts related to commercial loans	Other income	2,076			(1,263		)	4,900			(1,065		)
Foreign currency exchange contracts for customers	Corporate and correspondent investment sales	3,400			4,085			12,024			11,547

Schedule of assets subject to enforceable master netting arrangements

The following table represents the Company’s total gross derivative instrument assets and liabilities subject to an enforceable master netting arrangement. The derivative instruments the Company has with its customers are not subject to an enforceable master netting arrangement.

	Gross Amounts Recognized		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amount Presented in the Condensed Consolidated Balance Sheets		Financial Instruments Collateral Received/Pledged (1)		Cash Collateral Received/ Pledged (1)		Net Amount
	(In Thousands)
September 30, 2020
Derivative financial assets:
Subject to a master netting arrangement	$	46,217	$	—	$	46,217	$	—	$	3,502	$	42,715
Not subject to a master netting arrangement	735,903		—		735,903		—		—		735,903
Total derivative financial assets	$	782,120	$	—	$	782,120	$	—	$	3,502	$	778,618
Derivative financial liabilities:
Subject to a master netting arrangement	$	174,188	$	—	$	174,188	$	—	$	174,188	$	—
Not subject to a master netting arrangement	31,855		—		31,855		—		—		31,855
Total derivative financial liabilities	$	206,043	$	—	$	206,043	$	—	$	174,188	$	31,855
December 31, 2019
Derivative financial assets:
Subject to a master netting arrangement	$	41,390	$	—	$	41,390	$	—	$	5,860	$	35,530
Not subject to a master netting arrangement	313,592		—		313,592		—		—		313,592
Total derivative financial assets	$	354,982	$	—	$	354,982	$	—	$	5,860	$	349,122
Derivative financial liabilities:
Subject to a master netting arrangement	$	94,979	$	—	$	94,979	$	—	$	94,979	$	—
Not subject to a master netting arrangement	40,921		—		40,921		—		—		40,921
Total derivative financial liabilities	$	135,900	$	—	$	135,900	$	—	$	94,979	$	40,921

(1) The actual amount of collateral received/pledged is limited to the asset/liability balance and does not include excess collateral received/pledged. When excess collateral exists, the collateral shown in the table above has been allocated based on the percentage of the actual amount of collateral posted.

Schedule of liabilities subject to enforceable master netting arrangements

The following table represents the Company’s total gross derivative instrument assets and liabilities subject to an enforceable master netting arrangement. The derivative instruments the Company has with its customers are not subject to an enforceable master netting arrangement.

	Gross Amounts Recognized		Gross Amounts Offset in the Condensed Consolidated Balance Sheets		Net Amount Presented in the Condensed Consolidated Balance Sheets		Financial Instruments Collateral Received/Pledged (1)		Cash Collateral Received/ Pledged (1)		Net Amount
	(In Thousands)
September 30, 2020
Derivative financial assets:
Subject to a master netting arrangement	$	46,217	$	—	$	46,217	$	—	$	3,502	$	42,715
Not subject to a master netting arrangement	735,903		—		735,903		—		—		735,903
Total derivative financial assets	$	782,120	$	—	$	782,120	$	—	$	3,502	$	778,618
Derivative financial liabilities:
Subject to a master netting arrangement	$	174,188	$	—	$	174,188	$	—	$	174,188	$	—
Not subject to a master netting arrangement	31,855		—		31,855		—		—		31,855
Total derivative financial liabilities	$	206,043	$	—	$	206,043	$	—	$	174,188	$	31,855
December 31, 2019
Derivative financial assets:
Subject to a master netting arrangement	$	41,390	$	—	$	41,390	$	—	$	5,860	$	35,530
Not subject to a master netting arrangement	313,592		—		313,592		—		—		313,592
Total derivative financial assets	$	354,982	$	—	$	354,982	$	—	$	5,860	$	349,122
Derivative financial liabilities:
Subject to a master netting arrangement	$	94,979	$	—	$	94,979	$	—	$	94,979	$	—
Not subject to a master netting arrangement	40,921		—		40,921		—		—		40,921
Total derivative financial liabilities	$	135,900	$	—	$	135,900	$	—	$	94,979	$	40,921

(1) The actual amount of collateral received/pledged is limited to the asset/liability balance and does not include excess collateral received/pledged. When excess collateral exists, the collateral shown in the table above has been allocated based on the percentage of the actual amount of collateral posted.