Derivatives and Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments Designated as Hedging Instruments

At December 31, 2014 and 2013, the notional values or contractual amounts and fair value of the Corporation’s derivatives designated in hedge relationships were as follows:



	Asset Derivatives								Liability Derivatives
	December 31, 2014				December 31, 2013				December 31, 2014				December 31, 2013
(In thousands)	Notional/ Contract Amount		Fair Value ⁽¹⁾		Notional/ Contract Amount		Fair Value ⁽¹⁾		Notional/ Contract Amount		Fair Value ⁽²⁾		Notional/ Contract Amount		Fair Value ⁽²⁾
Interest rate swaps:
Fair value hedges	$	250,000	$	5,256	$	—	$	—	$	93,313	$	6,683	$	126,637	$	11,574

⁽¹⁾ Included in Other Assets on the Consolidated Balance Sheet

⁽²⁾ Included in Other Liabilities on the Consolidated Balance Sheet

Fair Value Hedges. Prior to 2009, the Corporation entered into interest rate swaps with dealer

counterparties to convert certain fixed rate loans to variable rate instruments over the terms of the loans (termed

by the Corporation as the FRAP Program). These interest rate swaps are designated as fair value hedges and meet the criteria to qualify for the short cut method of accounting. Based on this shortcut method of accounting

treatment, no ineffectiveness is assumed. The Corporation discontinued originating interest rate swaps under the

FRAP Program in February 2008.

During the fourth quarter of 2014, the Corporation entered into a $250.0 million interest rate swap simultaneously with its long-term debt issuance for interest rate risk management purposes. This interest rate swap effectively modifies the receipt of fixed-rate interest amounts in exchange for floating-rate interest payments over the life of the swap, without an exchange of the underlying principal amount. This interest rate swap was designated as a fair value hedge, and through application of the “short cut method of accounting”, there is an assumption that the hedge is effective in offsetting changes in the fair value of the long-term debt due to changes in the U.S. LIBOR swap rate (the designated benchmark interest rate).

Derivative Instruments not Designated as Hedging Instruments

As of December 31, 2014 and 2013, the notional values or contractual amounts and fair value of the Corporation’s derivatives not designated in hedge relationships were as follows:



	Asset Derivatives								Liability Derivatives
	December 31, 2014				December 31, 2013				December 31, 2014				December 31, 2013
(In thousands)	Notional/ Contract Amount		Fair Value ⁽¹⁾		Notional/ Contract Amount		Fair Value ⁽¹⁾		Notional/ Contract Amount		Fair Value ⁽²⁾		Notional/ Contract Amount		Fair Value ⁽²⁾
Interest rate swaps	$	1,673,012	$	48,366	$	1,622,525	$	46,577	$	1,673,012	$	48,366	$	1,622,531	$	46,577
Mortgage loan commitments	102,523		1,408		90,541		891		—		—		—		—
Forward sales contracts	47,657		—		40,906		384		—		272		—		—
Credit contracts	10,001		—		—		—		69,227		—		49,914		—
Foreign exchange	22,406		167		6,478		50		6,580		118		6,893		50
Equity swap	—		—		—		—		75,138		—		63,813		—
Total	$	1,855,599	$	49,941	$	1,760,450	$	47,902	$	1,823,957	$	48,756	$	1,743,151	$	46,627

(1) Included in Other Assets on the Consolidated Balance Sheet

(2) Included in Other Liabilities on the Consolidated Balance Sheet

Derivative Instruments, Gain (Loss)

Gains and losses recognized in income on nondesignated hedging instruments for the years ended December 31, 2014, 2013 and 2012, are as follows:



(In thousands)
Derivatives not designated as hedging instruments	Location of Gain/(Loss) Recognized in Income on Derivative	Amount of Gain / (Loss) Recognized in Income on Derivatives
		Year Ended December 31,
		2014			2013			2012
Mortgage loan commitments	Other operating income	$	517		$	(3,509	)	$	(559	)
Forward sales contracts	Other operating income	(656		)	446			1,737
Foreign exchange contracts	Other operating income	(193		)	(116		)	189
Other	Other operating expense	—			—			—
Total		$	(332	)	$	(3,179	)	$	1,367

Offsetting disclosure for derivatives contracts

Derivative assets and liabilities are recorded at fair value on the balance sheet and do not take into account the effects of master netting agreements the Corporation has with its financial institution counterparties. These master netting agreements allow the Corporation to settle all derivative contracts held with a single financial institution counterparty on a net basis, and to offset net derivative positions with related collateral, where applicable. Collateral, usually in the form of investment securities, is posted by the counterparty with net liability position in accordance with contract thresholds. The following tables illustrate the potential effect of the Corporation’s derivative master netting arrangements, by type of financial instrument, on the Corporation’s statement of financial position as of December 31, 2014 and 2013. The swap agreements the Corporation has in place with its commercial customers are not subject to enforceable master netting arrangements, and, therefore, are excluded from these tables.



	As of December 31, 2014
	Gross amounts recognized		Gross amounts offset in the consolidated balance sheet		Net amounts presented in the consolidated balance sheet		Gross amounts not offset in the consolidated balance sheet						Net amount
(In thousands)	Gross amounts recognized		Gross amounts offset in the consolidated balance sheet		Net amounts presented in the consolidated balance sheet		Financial instruments ⁽¹⁾			Collateral ⁽²⁾			Net amount
Derivative Assets
Interest rate swaps - designated	$	5,256	$	—	$	5,256	$	—		$	—		$	5,256
Interest rate swaps - nondesignated	352		—		352		(352		)	—			—
Total derivative assets	$	5,608	$	—	$	5,608	$	(352	)	$	—		$	5,256
	Gross amounts of recognized liabilities		Gross amounts offset in the statement of financial position		Net amounts of liabilities presented in the statement of financial position		Gross amounts of financial instruments not offset in the statement of financial position						Net amount
	Gross amounts of recognized liabilities		Gross amounts offset in the statement of financial position				Netting adjustment per applicable master netting agreements			Fair value of financial collateral			Net amount
Derivative Liabilities
Interest rate swaps - designated	$	6,683	$	—	$	6,683	$	—		$	(6,683	)	$	—
Interest rate swaps - nondesignated	48,014		—		48,014		(352		)	(47,662		)	—
Total derivative liabilities	$	54,697	$	—	$	54,697	$	(352	)	$	(54,345	)	$	—



	As of December 31, 2013
	Gross amounts recognized		Gross amounts offset in the consolidated balance sheet		Net amounts presented in the consolidated balance sheet		Gross amounts not offset in the consolidated balance sheet						Net amount
(In thousands)	Gross amounts recognized		Gross amounts offset in the consolidated balance sheet		Net amounts presented in the consolidated balance sheet		Financial instruments ⁽¹⁾			Collateral ⁽²⁾			Net amount
Derivative Assets
Interest rate swaps - nondesignated	$	4,791	$	—	$	4,791	$	(4,791	)	$	—		$	—
Foreign exchange	4		—		4		(46		)	42			—
Total derivative assets	$	4,795	$	—	$	4,795	$	(4,837	)	$	42		$	—
	Gross amounts of recognized liabilities		Gross amounts offset in the statement of financial position		Net amounts of liabilities presented in the statement of financial position		Gross amounts of financial instruments not offset in the statement of financial position						Net amount
	Gross amounts of recognized liabilities		Gross amounts offset in the statement of financial position				Netting adjustment per applicable master netting agreements			Fair value of financial collateral			Net amount
Derivative Liabilities
Interest rate swaps - designated	$	11,574	$	—	$	11,574	$	—		$	(11,574	)	$	—
Interest rate swaps - nondesignated	41,787		—		41,787		(4,791		)	(36,996		)	—
Foreign exchange	46		—		46		(46		)	—			—
Total derivative liabilities	$	53,407	$	—	$	53,407	$	(4,837	)	$	(48,570	)	$	—

(1) For derivative assets, this includes any derivative liability fair values that could be offset in the event of counterparty default. For derivative liabilities, this includes any derivative asset fair values that could be offset in the event of counterparty default.

(2) For derivate assets, this includes the fair value of collateral received by the Corporation from the counterparty. Securities received as collateral are not included in the Consolidated Balance Sheet unless the counterparty defaults. For derivative liabilities, this includes the fair value of securities pledged by the Corporation to the counterparty. These securities are included in the Consolidated Balance Sheet unless the Corporation defaults.