Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of fair value of derivative financial instruments

The table below presents the fair value of derivative financial instruments as of the dates indicated as well as their classification on the consolidated balance sheets (in thousands):

	September 30, 2020				December 31, 2019
	Derivative Asset		Derivative Liability		Derivative Asset		Derivative Liability
Derivatives designated as hedging instruments:
Fair value hedge of brokered time deposits	$	—	$	—	$	—	$	880
Cash flow hedge of subordinated debt	2,735		—		—		—
Total	2,735		—		—		880
Derivatives not designated as hedging instruments:
Customer derivative positions	87,978		1		27,277		446
Dealer offsets to customer derivative positions	1		30,260		394		6,425
Risk participations	13		15		—		12
Mortgage banking - loan commitment	12,381		—		1,970		—
Mortgage banking - forward sales commitment	280		776		98		86
Bifurcated embedded derivatives	—		1,938		5,268		—
Dealer offsets to bifurcated embedded derivatives	—		529		—		7,667
Total	100,653		33,519		35,007		14,636
Total derivatives	$	103,388	$	33,519	$	35,007	$	15,516
Total gross derivative instruments	$	103,388	$	33,519	$	35,007	$	15,516
Less: Amounts subject to master netting agreements	(295)		(295)		(401)		(401)
Less: Cash collateral received/pledged	(2,466)		(31,676)		—		(14,933)
Net amount	$	100,627	$	1,548	$	34,606	$	182

Schedule of effect of derivatives in fair value hedging relationships on the consolidated statement of income

The table below presents the effect of derivatives in hedging relationships on the consolidated statement of income for the periods indicated (in thousands). 

	Interest expense
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Total amounts presented in the consolidated statements of income	$	13,319	$	21,277	$	45,561	$	63,531
Gains (losses) on fair value hedging relationships:
Interest rate contracts:
Amounts related to interest settlements on derivatives	24		(97)		51		(300)
Recognized on derivatives	(114)		71		1,068		671
Recognized on hedged items	(5)		(55)		(996)		(668)
Net income (expense) recognized on fair value hedges	(95)		(81)		123		(297)
Gains (losses) on active cash flow hedging relationships (1):
Interest rate contracts:
Realized gains (losses) reclassified from AOCI into net income (2)	$	(130)	$	—	$	(197)	$	—
Net income (expense) recognized on cash flow hedges	$	(130)	$	—	$	(197)	$	—

 (1) Excludes amortization of losses related to de-designated cash flow hedges. See Note 13 for further detail.

(2) Includes $119,000 and $211,000 of premium amortization expense excluded from the assessment of hedge effectiveness for the three and nine months ended September 30, 2020, respectively.

Schedule of carrying amount and cumulative fair value hedging adjustments on hedged liability

The table below presents the carrying amount of hedged fixed-rate brokered time deposits and cumulative fair value hedging adjustments included in the carrying amount of the hedged liability for the periods presented (in thousands).

	September 30, 2020				December 31, 2019
Balance Sheet Location	Carrying amount of Assets (Liabilities)		Hedge Accounting Basis Adjustment		Carrying amount of Assets (Liabilities)		Hedge Accounting Basis Adjustment
Deposits	$	(20,324)	$	(351)	$	(35,880)	$	645

Schedule of gains and losses recognized in income on derivatives not designated as hedging instruments

The table below presents the gains and losses recognized in income on derivatives not designated as hedging instruments for the periods indicated (in thousands). 

	Location of Gain (Loss) Recognized in Income on Derivatives	Amount of Gain (Loss) Recognized in Income on Derivatives
		Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
Customer derivatives, dealer offsets and risk participations	Other noninterest income	$	2,258	$	648	$	4,846	$	2,371
Bifurcated embedded derivatives and dealer offsets	Other noninterest income	65		—		(158)		144
De-designated hedges	Other noninterest income	—		—		—		(193)
Mortgage banking derivatives	Mortgage loan revenue	(2,554)		(49)		(2,454)		(987)
		$	(231)	$	599	$	2,234	$	1,335