Derivative Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Derivative instruments, recognized at fair value within other assets or accrued expenses and other liabilities on the Consolidated Statements of Financial Condition, were as follows:

 

	At December 31, 2020
			Fair Value
(In thousands)	Notional Amount(1)		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contract	$	150,000	$	59	$	—
Forward foreign exchange contracts	207,515		—		1,521
Total derivatives designated as hedging instruments			59		1,521
Derivatives not designated as hedging instruments:
Interest rate contracts	6,140,464		248,208		14,681
Risk participation agreements	470,670		62		125
Forward foreign exchange contracts	90,647		11		865
Interest rate lock commitments	447,278		14,565		4
Forward loan sales commitments	535,244		37		3,411
Power Equity CDs	16,752		459		459
Swap agreement	12,652		—		66
Total derivatives not designated as hedging instruments			263,342		19,611
Total derivatives before netting			263,401		21,132
Netting(2)			(52)		(1,876)
Total derivatives, net			$	263,349	$	19,256

(1)Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Condition.

(2)Includes netting of derivative asset and liability balances and related cash collateral, where counterparty netting agreements are in place.

	At December 31, 2019
			Fair Value
(In thousands)	Notional Amount(1)		Derivative Assets		Derivative Liabilities
Derivatives designated as hedging instruments:
Interest rate contract	$	150,000	$	—	$	168
Forward foreign exchange contracts	177,593		—		3,251
Total derivatives designated as hedging instruments			—		3,419
Derivatives not designated as hedging instruments:
Interest rate contracts	5,095,969		102,893		5,872
Risk participation agreements	316,353		202		354
Forward foreign exchange contracts	262,656		—		3,268
Interest rate lock commitments	158,111		2,772		20
Forward loan sales commitments	174,013		41		289
Power Equity CDs	29,009		734		734
Swap agreement	12,652		—		356
Total derivatives not designated as hedging instruments			106,642		10,893
Total derivatives before netting			106,642		14,312
Netting(2)			(540)		(5,109)
Total derivatives, net			$	106,102	$	9,203

(1)Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Condition.

(2)Includes netting of derivative asset and liability balances and related cash collateral, where counterparty netting agreements are in place.

Derivative instruments may be subject to master netting arrangements and collateral arrangements and qualify for offset in the Consolidated Statements of Financial Condition. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Derivative instruments subject to master netting arrangements and collateral arrangements are recognized on a net basis in the Consolidated Statements of Financial Condition. The gross amounts recognized, gross amounts offset and net amount presented of derivative instruments were as follows:

	At December 31, 2020
(In thousands)	Gross Amounts Recognized		Gross Amounts  Offset(1)		Net Amount Presented
Derivative assets
Interest rate contracts	$	248,267	$	—	$	248,267
Risk participation agreements	62		—		62
Forward foreign exchange contracts	11		(11)		—
Interest rate lock commitments	14,565		(4)		14,561
Forward loan sales commitments	37		(37)		—
Power Equity CDs	459		—		459
Total derivative assets	$	263,401	$	(52)	$	263,349
Derivative liabilities
Interest rate contracts	$	14,681	$	—	$	14,681
Risk participation agreements	125		—		125
Forward foreign exchange contracts	2,386		(1,769)		617
Interest rate lock commitments	4		(4)		—
Forward loan sales commitments	3,411		(37)		3,374
Power Equity CDs	459		—		459
Swap agreement	66		(66)		—
Total derivative liabilities	$	21,132	$	(1,876)	$	19,256

	At December 31, 2019
(In thousands)	Gross Amounts Recognized		Gross Amounts Offset(1)		Net Amount Presented
Derivative assets
Interest rate contracts	$	102,893	$	(492)	$	102,401
Risk participation agreements	202		—		202
Interest rate lock commitments	2,772		(7)		2,765
Forward loan sales commitments	41		(41)		—
Power Equity CDs	734		—		734
Total derivative assets	$	106,642	$	(540)	$	106,102
Derivative liabilities
Interest rate contracts	$	6,040	$	(491)	$	5,549
Risk participation agreements	354		—		354
Forward foreign exchange contracts	6,519		(4,214)		2,305
Interest rate lock commitments	20		(7)		13
Forward loan sales commitments	289		(41)		248
Power Equity CDs	734		—		734
Swap agreement	356		(356)		—
Total derivative liabilities	$	14,312	$	(5,109)	$	9,203

(1)Includes the amounts with counterparties subject to enforceable master netting arrangements that have been offset in the Consolidated Statements of Financial Condition.

Derivatives Designated as Hedging Instruments

Interest rate contract The carrying amount of the hedged subordinated debt, including the cumulative basis adjustment related to the application of fair value hedge accounting, is recorded in long-term borrowings on the Consolidated Statements of Financial Condition and was as follows:

	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
	At December 31,				At December 31,
(In thousands)	2020		2019		2020		2019
Subordinated bank note - 2025	$	159,888	$	151,454	$	10,975	$	2,773

The following table summarizes the effect of fair value hedge accounting on the Consolidated Statements of Income for the years ended December 31, 2020, 2019 and 2018.

	Year Ended December 31,
(In thousands)	2020		2019		2018
Statement of income line where the gain (loss) on the fair value hedge was recorded:
Interest expense on borrowings	$	60,275	$	72,072	$	43,144
Gain (loss) on interest rate contract (fair value hedge)
Hedged item	(8,203)		(6,937)		2,163
Derivative designated as a hedging instrument	8,274		6,986		(2,275)
Net income (expense) recognized on fair value hedge in interest expense on borrowings	$	71	$	49	$	(112)

Forward Foreign Exchange Contracts The effect of net investment hedges on accumulated other comprehensive income was as follows:

	Year Ended December 31,
(In thousands)	2020		2019		2018
Forward foreign exchange contracts	$	(5,452)	$	(7,001)	$	13,762

Derivatives Not Designated as Hedging Instruments Certain other interest rate contracts, forward foreign exchange contracts, interest rate lock commitments and other contracts have not been designated as hedging instruments. The effect of these derivatives on the Consolidated Statements of Income was as follows:

		Year Ended December 31,
(In thousands)	Location of Gain (Loss)	2020		2019		2018
Interest rate contracts(1)	Other noninterest income	$	5,682	$	(18,240)	$	(440)
Risk participation agreements	Other noninterest expense	(387)		123		31
Forward foreign exchange contracts	Other noninterest expense	2,520		(10,209)		23,707
Interest rate lock commitments	Net gains on sales of loans and leases	12,582		(573)		806
Forward loan sales commitments	Net gains on sales of loans and leases	(3,126)		(172)		—
Swap agreement	Other noninterest income	(1)		(69)		(274)
Net gain (loss) recognized		$	17,270	$	(29,140)	$	23,830

(1)Included in the year ended December 31, 2019 is a loss of $17.3 million related to the termination of $1.1 billion of interest rate swaps.

The Corporation executes all of its forward foreign exchange contracts in the over-the-counter market with large financial institutions pursuant to International Swaps and Derivatives Association, Inc. agreements. These agreements include credit risk-related features that enhance the creditworthiness of these instruments, as compared with other obligations of the respective counterparty with whom the Corporation has transacted, by requiring that additional collateral be posted under certain circumstances. The amount of collateral required depends on the contract and is determined daily based on market and currency exchange rate conditions.

At December 31, 2020 and 2019, credit risk-related contingent features existed on forward foreign exchange contracts with a notional value of $35.0 million and $23.1 million, respectively. In the event the Corporation is rated less than BB- by Standard and Poor's, the contracts could be terminated or the Corporation may be required to provide approximately $699 thousand and $462 thousand in additional collateral at December 31, 2020 and 2019 respectively. There were no forward foreign exchange contracts containing credit risk-related features in a liability position at both December 31, 2020 and December 31, 2019.

At December 31, 2020, the Corporation had posted $43.6 million and $2.4 million of cash collateral related to its interest rate contracts and forward foreign exchange contracts, respectively.