At September 30, 2022 and December 31, 2021, the Company’s derivative financial instruments consisted of interest rate swaps. The Company’s interest rate swaps are used for three purposes: 1) to mitigate the Company’s exposure to rising interest rates on certain fixed rate loans totaling $287.1 million and $299.6 million at September 30, 2022 and December 31, 2021, respectively; 2) to facilitate risk management strategies for our loan customers with $222.9 million of swaps

outstanding, which include $111.4 million with customers and $111.4 million with bank counterparties at September 30, 2022 and $228.0 million of swaps outstanding, which include $114.0 million with customers and $114.0 million with bank counterparties at December 31, 2021; and 3) to mitigate exposure to rising interest rates on certain short-term advances and brokered deposits totaling $871.5 million at September 30, 2022, and $996.5 at December 31, 2021.

At September 30, 2022 and December 31, 2021, we held derivatives designated as cash flow hedges, fair value hedges and certain derivatives not designated as hedges.

The Company’s derivative instruments are carried at fair value in the Company’s financial statements as part of Other Assets for derivatives with positive fair values and Other Liabilities for derivatives with negative fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not it qualifies and has been designated as a hedge for accounting purposes, and further, by the type of hedging relationship.

At September 30, 2022 and December 31, 2021, derivatives with a combined notional amount of $222.9 million and $228.0 million, respectively, were not designated as hedges. At September 30, 2022 and December 31, 2021, derivatives with a combined notional amount of $287.1million and $299.6 million, respectively, were designated as fair value hedges. At September 30, 2022 and December 31, 2021, derivatives with a combined notional amount of $871.5 million and $996.5 million, respectively, were designated as cash flow hedges.

For cash flow hedges, the changes in the fair value of the derivative are reported in accumulated other comprehensive income (loss), net of tax. Amounts in accumulated other comprehensive loss are reclassified into earnings in the same period during which the hedged forecasted transaction effects earnings. During the three months ended September 30, 2022 and 2021, $1.0 million and $2.6 million, respectively, was reclassified from accumulated other comprehensive loss to interest expense. The estimated amount to be reclassified in the next 12 months out of accumulated other comprehensive loss is $4.1 million.

Changes in the fair value of interest rate swaps not designated as hedges are reflected in “Net gain (loss) from fair value adjustments” in the Consolidated Statements of Income.

The following table sets forth information regarding the Company’s derivative financial instruments at the periods indicated:

(1)Derivatives in a positive position are recorded as “Other assets” and derivatives in a negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition.

The following table presents information regarding the Company’s fair value hedged items for the periods indicated:


						Cumulative Amount
						of the Fair Hedging Adjustment
Line Item in the Consolidated Statement		Carrying Amount of the				Included in the Carrying Amount of
of Financial Condition in Which		Hedged				the Hedged
the Hedged Item Is Included		Assets/(Liabilities)				Assets/(Liabilities)
(In thousands)		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021
Loans
Multi-family residential	$	92,692	$	113,730	$	(11,412)	$	7,608
Commercial real estate		168,117		192,694		(16,105)		3,477
Commercial business and other		—		6,298		—		122
Total	$	260,809	$	312,722	$	(27,517)	$	11,207

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income for the periods indicated:


		For the three months ended				For the nine months ended
		September 30,				September 30,
(In thousands)	Affected Line Item in the Statements Where Net Income is Presented	2022		2021		2022		2021
Financial Derivatives:
	Other interest expense	$	—	$	(33)	$	—	$	(305)
	Net gain (loss) from fair value adjustments		—		(445)		—		978
Interest rate swaps (non-hedge)			—		(478)		—		673

Interest rate swaps (fair value hedge)	Interest and fees on loans		253		(1,206)		(2,068)		(3,231)

	Other interest expense		64		(2,737)		(3,890)		(7,942)
	Deposit		793		—		842		—
Interest rate swaps (cash flow hedge)			857		(2,737)		(3,048)		(7,942)

Net income (loss)		$	1,110	$	(4,421)	$	(5,116)	$	(10,500)

The Company’s interest rate swaps are subject to master netting arrangements between the Company and its three designated counterparties. The Company has not made a policy election to offset its derivative positions.

The following tables present the effect of the master netting arrangements on the presentation of the derivative assets and liabilities in the Consolidated Statements of Financial Condition as of the dates indicated:

September 30, 2022

Gross Amounts Not Offset in the

Consolidated Statements of

Gross Amount Offset in

Net Amount of Assets

Financial Condition

Gross Amount of

the Statements

Presented in the

Financial

Cash Collateral

(In thousands)

Recognized Assets

of Condition

Statements of Condition

Instruments

Received

Net Amount

Interest rate swaps

83,280

—

83,280

—

50,505

32,775

Gross Amounts Not Offset in the

Consolidated Statements of

Gross Amount of

Gross Amount Offset in

Net Amount of Liabilities

Financial Condition

Recognized

the Statements

Presented in the

Financial

Cash Collateral

(In thousands)

Liabilities

of Condition

Statements of Condition

Instruments

Pledged

Net Amount

Interest rate swaps

18,698

—

18,698

—

18,698

December 31, 2021

Gross Amounts Not Offset in the

Consolidated Statements of

Gross Amount Offset in

Net Amount of Assets

Financial Condition

Gross Amount of

the Statements

Presented in the

Financial

Cash Collateral

(In thousands)

Recognized Assets

of Condition

Statements of Condition

Instruments

Received

Net Amount

Interest rate swaps

10,683

—

10,683

—

10,683

Gross Amounts Not Offset in the

Consolidated Statements of

Gross Amount of

Gross Amount Offset in

Net Amount of Liabilities

Financial Condition

Recognized

the Statements

Presented in the

Financial

Cash Collateral

(In thousands)

Liabilities

of Condition

Statements of Condition

Instruments

Pledged

Net Amount

Interest rate swaps

25,071

—

25,071

—

21,527

3,544