The notional amounts of the Company’s derivative instruments are shown in the table below. These contractual amounts, along with other terms of the derivative, are used to determine amounts to be exchanged between counterparties and are not a measure of loss exposure. The Company's derivatives are not accounted for as accounting hedges except for the interest rate floors, as discussed below.


	December 31
(In thousands)	2023		2022
Interest rate swaps	$	2,166,393	$	1,981,821
Interest rate floors	2,000,000		1,000,000
Interest rate caps	336,682		152,784
Credit risk participation agreements	653,887		579,925
Foreign exchange contracts	30,401		27,991
Mortgage loan commitments	3,004		—
Mortgage loan forward sale contracts	1,349		—
Forward TBA contracts	3,000		—
Total notional amount	$	5,194,716	$	3,742,521

The largest group of notional amounts relate to interest rate swap contracts sold to commercial customers who wish to modify their interest rate sensitivity. Those customers are engaged in a variety of businesses, including real estate, manufacturing, retail product distribution, education, and retirement communities. These interest rate swap contracts with customers are offset by matching interest rate swap contracts purchased by the Company from other financial institutions (dealers). Contracts with dealers that require central clearing are novated to a clearing agency who becomes the Company's counterparty. Because of the matching terms of the offsetting contracts, in addition to collateral provisions which mitigate the impact of non-performance risk, changes in fair value subsequent to initial recognition have a minimal effect on earnings.

Many of the Company’s interest rate swap contracts with large financial institutions contain contingent features relating to debt ratings or capitalization levels. Under these provisions, if the Company’s debt rating falls below investment grade or if the Company ceases to be “well-capitalized” under risk-based capital guidelines, certain counterparties can require immediate and ongoing collateralization on interest rate swaps in net liability positions or instant settlement of the contracts. The Company maintains debt ratings and capital well above those minimum requirements.

As of December 31, 2023, the Company held four interest rate floors indexed to 1-month SOFR to hedge the risk of declining interest rates on certain floating rate commercial loans. The floors have a combined notional value of $2.0 billion and are forward-starting. Each of the four interest rate floors has a six-year term and a notional amount of $500 million. In the event that the index rate falls below zero, the maximum rate that the Company can earn on the notional amount of each floor is limited to the strike rate. Information about the floors is provided in the table below.

The premium paid for the floors totaled $90.2 million, which includes $54.4 million paid during 2023. At December 31, 2023, the maximum length of time over which the Company is hedging its exposure to lower rates is approximately 7 years. These interest rate floors qualified and were designated as cash flow hedges and were assessed for effectiveness using regression analysis. The change in the fair value of these interest rate floors is recorded in AOCI, net of the amortization of the premiums paid, which is recorded against interest and fees on loans in the consolidated statements of income. As of December 31, 2023, net deferred losses on the interest rate floors totaled $1.7 million (pre-tax) and were recorded in AOCI in the consolidated balance sheet. As of December 31, 2023, it is expected that $10.8 million (pre-tax) interest rate floor premium amortization will be reclassified from AOCI into earnings over the next 12 months for the outstanding interest rate floors.

During the year ended December 31, 2020, the Company monetized three interest rate floors that were previously classified as cash flow hedges with a combined notional balance of $1.5 billion and an asset fair value of $163.2 million. As of December 31, 2023, the total realized gains on the monetized cash flow hedges remaining in AOCI was $51.3 million (pre-tax), which will be reclassified into interest income over the next 3.0 years. The estimated amount of net gains remaining in AOCI related to the monetized cash flow hedges at December 31, 2023 that is expected to be reclassified into income within the next 12 months is $22.2 million.

The Company also contracts with other financial institutions, as a guarantor or beneficiary, to share credit risk associated with certain interest rate swaps through risk participation agreements. The Company’s risks and responsibilities as guarantor are further discussed in Note 21 on Commitments, Contingencies and Guarantees. In addition, the Company enters into foreign exchange contracts, which are mainly comprised of contracts with customers to purchase or deliver specific foreign currencies at specific future dates.

Under its program to sell residential mortgage loans in the secondary market, the Company designates certain newly-originated residential mortgage loans as held for sale. Derivative instruments arising from this activity include mortgage loan commitments and forward loan sale contracts. Changes in the fair values of the loan commitments and funded loans prior to sale that are due to changes in interest rates are economically hedged with forward contracts to sell residential mortgage-backed securities in the to-be-announced (TBA) market. These forward TBA contracts are also considered to be derivatives and are settled in cash at the security settlement date. In late 2022, the Company temporarily paused sales of these loans and halted entering into the forward contracts, as lower demand for mortgage loans coupled with volatility in the TBA market made it difficult to effectively hedge the Company's mortgage loan production. The Company resumed sales during the first quarter of 2023.

The fair values of the Company’s derivative instruments, whose notional amounts are listed above, are shown in the table below. Information about the valuation methods used to determine fair value is provided in Note 17 on Fair Value Measurements. As stated in the summary of significant accounting policies, derivative instruments and their related gains and losses are presented as operating cash flows in the consolidated statement of cash flows.

The Company's policy is to present its derivative assets and derivative liabilities on a gross basis in its consolidated balance sheets, and these are reported in other assets and other liabilities. Certain collateral posted to and from the Company's clearing counterparty has been applied to the fair values of the cleared swaps, such that in the table below, the positive fair values of cleared swaps were reduced by $27.8 million at December 31, 2022. There was no reduction to negative fair values of cleared swaps at December 31, 2022. There was no reduction to positive or negative fair values of cleared swaps at December 31, 2023.


	Asset Derivatives				Liability Derivatives
	December 31				December 31
	2023		2022		2023		2022
(In thousands)	Fair Value				Fair Value
Derivatives designated as hedging instruments:
Interest rate floors	$	78,960	$	33,371	$	—	$	—
Total derivatives designated as hedging instruments	$	78,960	$	33,371	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate swaps	$	35,816	$	23,894	$	(35,816)	$	(51,742)
Interest rate caps	1,391		2,705		(1,391)		(2,705)
Credit risk participation agreements	77		34		(194)		(119)
Foreign exchange contracts	534		488		(479)		(418)
Mortgage loan commitments	89		—		(1)		—
Mortgage loan forward sale contracts	8		—		—		—
Forward TBA contracts	1		—		(18)		—
Total derivatives not designated as hedging instruments	$	37,916	$	27,121	$	(37,899)	$	(54,984)
Total	$	116,876	$	60,492	$	(37,899)	$	(54,984)

The Company made an election to exclude the initial premiums paid on the interest rate floors from the hedge effectiveness measurement. Those initial premiums are amortized over the periods between the premium payment month and the contract maturity month. The pre-tax effects of the gains and losses (both the included and excluded amounts for hedge effectiveness assessment) recognized in the other comprehensive income from the cash flow hedging instruments and the amounts reclassified from accumulated other comprehensive income into income (both included and excluded amounts for hedge effectiveness measurement) are shown in the table below.


	Amount of Gain or (Loss) Recognized in OCI						Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from AOCI into Income
(In thousands)	Total		Included Component		Excluded Component		(In thousands)	Total		Included Component		Excluded Component
For the Year Ended December 31, 2023
Derivatives in cash flow hedging relationships:
Interest rate floors	$	(8,860)	$	3,122	$	(11,982)	Interest and fees on loans	$	15,209	$	29,731	$	(14,522)
Total	$	(8,860)	$	3,122	$	(11,982)	Total	$	15,209	$	29,731	$	(14,522)
For the Year Ended December 31, 2022
Derivatives in cash flow hedging relationships:
Interest rate floors	$	(2,428)	$	—	$	(2,428)	Interest and fees on loans	$	23,355	$	30,679	$	(7,324)
Total	$	(2,428)	$	—	$	(2,428)	Total	$	23,355	$	30,679	$	(7,324)
For the Year Ended December 31, 2021
Derivatives in cash flow hedging relationships:
Interest rate floors	$	—	$	—	$	—	Interest and fees on loans	$	24,160	$	30,310	$	(6,150)
Total	$	—	$	—	$	—	Total	$	24,160	$	30,310	$	(6,150)


	Location of Gain/(Loss) Recognized in the Consolidated Statements of Income	Amount of Gain/(Loss) Recognized in Income on Derivative
		For the Years Ended December 31
(In thousands)		2023		2022		2021



Derivative instruments:
Interest rate swaps	Other non-interest income	$	3,642	$	2,472	$	3,170
Interest rate caps	Other non-interest income	86		16		15
Credit risk participation agreements	Other non-interest income	60		172		(187)
Foreign exchange contracts	Other non-interest income	(14)		38		78
Mortgage loan commitments	Loan fees and sales	87		(763)		(2,463)
Mortgage loan forward sale contracts	Loan fees and sales	8		(4)		4
Forward TBA contracts	Loan fees and sales	53		1,773		1,777
Total		$	3,922	$	3,704	$	2,394

The following table shows the extent to which assets and liabilities relating to derivative instruments have been offset in the consolidated balance sheets. It also provides information about these instruments which are subject to an enforceable master netting arrangement, irrespective of whether they are offset, and the extent to which the instruments could potentially be offset. Also shown is collateral received or pledged in the form of other financial instruments, which is generally cash or marketable securities. The collateral amounts in this table are limited to the outstanding balances of the related asset or liability (after netting is applied); thus amounts of excess collateral are not shown. Most of the derivatives in the following table were transacted under master netting arrangements that contain a conditional right of offset, such as close-out netting, upon default.

While the Company is party to master netting arrangements with most of its swap counterparties, the Company does not offset derivative assets and liabilities under these arrangements on its consolidated balance sheets. Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums, and usually consist of marketable securities. By contract, this collateral may be sold or re-pledged by the secured party until recalled at a subsequent valuation date by the pledging party. For those swap transactions requiring central clearing, the Company posts cash or securities to its clearing agent. Collateral positions are valued daily, and adjustments to amounts received and pledged by the Company are made as appropriate to maintain proper collateralization for these transactions. Swap derivative transactions with customers are generally secured by rights to non-financial collateral, such as real and personal property, which is not shown in the table below.


							Gross Amounts Not Offset in the Balance Sheet
(In thousands)	Gross Amount Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments Available for Offset		Collateral Received/Pledged		Net Amount
December 31, 2023
Assets:
Derivatives subject to master netting agreements	$	116,702	$	—	$	116,702	$	(3,930)	$	(107,492)	$	5,280
Derivatives not subject to master netting agreements	174		—		174
Total derivatives	$	116,876	$	—	$	116,876
Liabilities:
Derivatives subject to master netting agreements	$	37,300	$	—	$	37,300	$	(3,930)	$	—	$	33,370
Derivatives not subject to master netting agreements	599		—		599
Total derivatives	$	37,899	$	—	$	37,899
December 31, 2022
Assets:
Derivatives subject to master netting agreements	$	60,270	$	—	$	60,270	$	(1,007)	$	(56,816)	$	2,447
Derivatives not subject to master netting agreements	222		—		222
Total derivatives	$	60,492	$	—	$	60,492
Liabilities:
Derivatives subject to master netting agreements	$	54,609	$	—	$	54,609	$	(1,007)	$	—	$	53,602
Derivatives not subject to master netting agreements	375		—		375
Total derivatives	$	54,984	$	—	$	54,984