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Derivative Instruments
 6 Months Ended
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
(In Thousands)
The Company uses certain derivative instruments to meet the needs of customers as well as to manage the interest rate risk associated with certain transactions.
Non-hedge derivatives
The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures.
The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors.
The following table provides a summary of the Company’s derivatives not designated as hedging instruments as of the dates presented:
 Balance SheetJune 30, 2021December 31, 2020
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:
  Interest rate contractsOther Assets$204,113 $6,450 $222,933 $9,884 
  Interest rate lock commitmentsOther Assets517,860 10,448 589,701 19,824 
Forward commitmentsOther Assets73,000 68 — — 
Totals$794,973 $16,966 $812,634 $29,708 
Derivative liabilities:
  Interest rate contractsOther Liabilities$204,113 $6,450 $222,933 $9,884 
Interest rate lock commitmentsOther Liabilities10,908 28 — — 
  Forward commitmentsOther Liabilities723,000 1,878 716,000 5,090 
Totals$938,021 $8,356 $938,933 $14,974 
Gains and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the dates presented:
Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Interest rate contracts:
Included in interest income on loans$836 $523 $1,206 $1,259 
Interest rate lock commitments:
Included in mortgage banking income(1,082)2,924 (9,404)24,745 
Forward commitments
Included in mortgage banking income(15,523)11,321 3,280 (4,149)
Total$(15,769)$14,768 $(4,918)$21,855 
Derivatives designated as cash flow hedges
Cash flow hedge relationships mitigate exposure to the variability of future cash flow or other forecasted transactions. The Company uses interest rate swap contracts in an effort to manage future interest rate exposure on borrowings. The hedging strategy converts the LIBOR-based variable interest rate on the forecasted borrowings to a fixed interest rate. As of June 30, 2021, the Company is hedging its exposure to the variability of future cash flows through 2030 and a portion of these hedges are forward starting.
The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates presented:
 Balance SheetJune 30, 2021December 31, 2020
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative assets:
  Interest rate swapsOther Assets$200,000 $10,504 $175,000 $3,866 
Derivative liabilities:
  Interest rate swapsOther Liabilities$62,000 $4,062 $87,000 $5,924 
Changes in fair value of the cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. The ineffective portions of the changes in fair value of the hedging instruments are immediately recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method. There were no ineffective portions for the six months ended June 30, 2021 or 2020. The impact on other comprehensive income for the six months ended June 30, 2021 and 2020 is discussed in Note 13, “Other Comprehensive Income (Loss).”
Derivatives designated as fair value hedges
Fair value hedges protect against changes in the fair value of an asset, liability, or firm commitment. The Company enters into interest rate swap agreements to manage interest rate exposure on certain of the Company’s fixed-rate subordinated notes. The agreements convert the fixed interest rates to LIBOR-based variable interest rates.
The following table provides a summary of the Company's derivatives designated as fair value hedges as of the dates presented:
 Balance SheetJune 30, 2021December 31, 2020
 LocationNotional AmountFair ValueNotional AmountFair Value
Derivative liabilities:
  Interest rate swapsOther Liabilities$100,000 $4,386 $100,000 $209 
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the periods presented:
 Amount of Gain (Loss) Recognized in Income
Income StatementThree Months Ended June 30,Six Months Ended June 30,
 Location2021202020212020
Derivative liabilities:
  Interest rate swaps - subordinated notesInterest Expense$3,264 $— $(4,177)$— 
Derivative liabilities - hedged items:
  Interest rate swaps - subordinated notesInterest Expense$(3,264)$— $4,177 $— 
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:
Carrying Amount of the Hedged LiabilityCumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet LocationJune 30, 2021December 31, 2020June 30, 2021December 31, 2020
Long-term debt$94,024 $98,114 $4,386 $209 
Offsetting

Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of offset” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments in the Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement:
Offsetting Derivative AssetsOffsetting Derivative Liabilities
June 30,
2021		December 31, 2020June 30,
2021		December 31, 2020
Gross amounts recognized$10,643 $3,866 $16,705 $21,107 
Gross amounts offset in the Consolidated Balance Sheets— — — — 
Net amounts presented in the Consolidated Balance Sheets10,643 3,866 16,705 21,107 
Gross amounts not offset in the Consolidated Balance Sheets
Financial instruments5,987 3,866 5,987 3,866 
Financial collateral pledged— — 9,092 14,042 
Net amounts$4,656 $— $1,626 $3,199