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Derivative Financial Instruments | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments Derivative Positions and Offsetting Derivatives Designated in Hedge Relationships. Interest rate swaps allow the Company to change the fixed or variable nature of an interest rate without the exchange of the underlying notional amount. Certain pay fixed/receive variable interest rate swaps are designated as cash flow hedges to effectively convert variable-rate debt into fixed-rate debt, whereas certain receive fixed/pay variable interest rate swaps are designated as fair value hedges to effectively convert fixed-rate long-term debt into variable-rate debt. Certain purchased options are also designated as cash flow hedges. Purchased options allow the Company to limit the potential adverse impact of variable interest rates by establishing a cap rate or floor rate in exchange for an upfront premium. The purchased options designated as cash flow hedges represent interest rate caps where payment is received from the counterparty if interest rates rise above the cap rate, and interest rate floors where payment is received from the counterparty when interest rates fall below the floor rate. Derivatives Not Designated in Hedge Relationships. The Company also enters into derivative transactions that are not designated in hedge relationships. The Company has a back-to-back swap program, whereby it enters into an interest rate swap with a qualified customer and simultaneously enters into an equal and opposite interest-rate swap with a swap counterparty, to hedge interest rate risk. Derivative assets and derivative liabilities with the same counterparty are presented on a net basis when master netting agreements are in place. The following tables present the notional amounts and fair values, including accrued interest, of derivative positions:
| At December 31, 2024
| Asset Derivatives |  | Liability Derivatives
(In thousands) | Notional Amounts | Fair Value |  | Notional Amounts | Fair Value
Designated as hedging instruments: |  |  |  |  |
Interest rate derivatives (1) | $ | 750,000 |  | $ | 719 |  |  | $ | 4,250,000 |  | $ | 13,169 |
Not designated as hedging instruments: |  |  |  |  |
Interest rate derivatives (1) | 8,693,493 |  | 300,120 |  |  | 8,728,767 |  | 298,296 |
Mortgage banking derivatives (2) | 584 |  | 3 |  |  | — |  | — |
Other (3) | 337,370 |  | 1,300 |  |  | 833,449 |  | 96 |
Total not designated as hedging instruments | 9,031,447 |  | 301,423 |  |  | 9,562,216 |  | 298,392 |
Gross derivative instruments, before netting | $ | 9,781,447 |  | 302,142 |  |  | $ | 13,812,216 |  | 311,561 |
Less: Master netting agreements |  | 31,881 |  |  |  | 31,881 |
Cash collateral pledged |  | 251,212 |  |  |  | 80 |
Total derivative instruments, after netting |  | $ | 19,049 |  |  |  | $ | 279,600 |
| At December 31, 2023
| Asset Derivatives |  | Liability Derivatives
(In thousands) | Notional Amounts | Fair Value |  | Notional Amounts | Fair Value
Designated as hedging instruments: |  |  |  |  |
Interest rate derivatives (1) | $ | 2,750,000 |  | $ | 11,140 |  |  | $ | 2,700,000 |  | $ | 13,679 |
Not designated as hedging instruments: |  |  |  |  |
Interest rate derivatives (1) | 8,284,356 |  | 319,122 |  |  | 8,272,197 |  | 321,064 |
Mortgage banking derivatives (2) | 2,798 |  | 37 |  |  | — |  | — |
Other (3) | 340,553 |  | 337 |  |  | 731,055 |  | 1,067 |
Total not designated as hedging instruments | 8,627,707 |  | 319,496 |  |  | 9,003,252 |  | 322,131 |
Gross derivative instruments, before netting | $ | 11,377,707 |  | 330,636 |  |  | $ | 11,703,252 |  | 335,810 |
Less: Master netting agreements |  | 55,949 |  |  |  | 55,949 |
Cash collateral pledged |  | 232,190 |  |  |  | — |
Total derivative instruments, after netting |  | $ | 42,497 |  |  |  | $ | 279,861 |
(1)Balances related to clearing houses are presented as a single unit of account. In accordance with their rule books, clearing houses legally characterize variation margin payments as settlement of derivatives rather than collateral against derivative positions. Notional amounts of interest rate swaps cleared through clearing houses included $71.1 million and $113.8 million for asset derivatives at December 31, 2024, and 2023, respectively. The related fair values approximate zero. There were no interest rate swaps cleared through clearing houses for liability derivatives at both December 31, 2024, and 2023. (2)Notional amounts related to residential loans exclude approved floating rate commitments of $0.4 million and $1.0 million at December 31, 2024, and 2023, respectively. (3)Other derivatives include foreign currency forward contracts related to lending arrangements, a Visa equity swap transaction, and risk participation agreements. Notional amounts of risk participation agreements include $294.5 million and $299.2 million for asset derivatives and $796.6 million and $682.9 million for liability derivatives at December 31, 2024, and 2023, respectively, which have insignificant related fair values. The following tables represent the offsetting of derivative financial instruments that are subject to master netting agreements:
| At December 31, 2024
| Gross Amounts of Recognized Assets/Liabilities |  | Gross Amounts Offset in the Statement of Financial Position |  | Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position |  | Gross Amounts Not Offset in the Statement of Financial position |  |
(In thousands) |  |  |  | Financial Instruments |  | Cash Collateral Pledged |  | Net Amount
Asset derivatives | $ | 283,185 |  |  | $ | 31,881 |  |  | $ | 251,304 |  |  | $ | — |  |  | $ | 251,212 |  |  | $ | 92 |
Liability derivatives | 32,218 |  |  | 31,881 |  |  | 337 |  |  | — |  |  | 80 |  |  | 257 |
| At December 31, 2023
| Gross Amounts of Recognized Assets/Liabilities |  | Gross Amounts Offset in the Statement of Financial Position |  | Net Amounts of Assets/Liabilities Presented in the Statement of Financial Position |  | Gross Amounts Not Offset in the Statement of Financial position |  |
(In thousands) |  |  |  | Financial Instruments |  | Cash Collateral Pledged |  | Net Amount
Asset derivatives | $ | 289,778 |  |  | $ | 55,949 |  |  | $ | 233,829 |  |  | $ | — |  |  | $ | 232,190 |  |  | $ | 1,639 |
Liability derivatives | 55,949 |  |  | 55,949 |  |  | — |  |  | — |  |  | — |  |  | — |
Derivative Activity The following table summarizes the income statement effect of derivatives designated as hedging instruments:
| Recognized In | Years ended December 31,
(In thousands) | Net Interest Income | 2024 |  | 2023 |  | 2022
Fair value hedges: |  |  |  |  |  |
Interest rate derivatives | Deposits interest expense | $ | (1,320) |  |  | $ | 3,194 |  |  | $ | — |
Hedged item | Deposits interest expense | — |  |  | (15) |  |  | — |
Net recognized on fair value hedges (1) |  | $ | 1,320 |  |  | $ | (3,179) |  |  | $ | — |
Cash flow hedges: |  |  |  |  |  |
Interest rate derivatives | Long-term debt interest expense | $ | 34 |  |  | $ | 310 |  |  | $ | 306 |
Interest rate derivatives | Interest and fees on loans and leases | (42,005) |  |  | (14,628) |  |  | 1,935 |
Net recognized on cash flow hedges |  | $ | (42,039) |  |  | $ | (14,938) |  |  | $ | 1,629 |
(1)The Company de-designated its fair value hedging relationship on $400.0 million of deposits, which pertained to a portion of Ametros’ member deposits, in 2023. The $1.3 million basis adjustment included in the carrying amount of deposits at December 31, 2023, was amortized into interest expense in January 2024 upon the acquisition of Ametros. Time-value premiums are excluded from the assessment of hedge effectiveness for purchased options designated as cash flow hedges. During the years ended December 31, 2024, 2023, and 2022, $0.5 million, $2.3 million, and $3.6 million of time-value premiums, respectively, for which a straight-line amortization approach was applied, were recognized in interest income. There were no remaining unamortized time-value premiums at December 31, 2024. Over the next twelve months, an estimated $5.2 million related to cash flow hedge gain or loss will be reclassified from AOCL, decreasing interest income as hedge interest payments are made. Additional information regarding cash flow hedge activity impacting AOCL and the related amounts reclassified to net income can be found within Note 13: Accumulated Other Comprehensive (Loss), Net of Tax. The maximum length of time over which forecasted transactions are hedged is 2.2 years. The following table summarizes the income statement effect of derivatives not designated as hedging instruments:
| Recognized In | Years ended December 31,
(In thousands) | Non-interest Income | 2024 |  | 2023 |  | 2022
Interest rate derivatives | Other income | $ | (1,480) |  |  | $ | (6,159) |  |  | $ | 25,092 |
Mortgage banking derivatives | Mortgage banking activities | (34) |  |  | 5 |  |  | (48) |
Other | Other income | 4,246 |  |  | (2,476) |  |  | 3,249 |
Total not designated as hedging instruments | $ | 2,732 |  |  | $ | (8,630) |  |  | $ | 28,293 |
Derivative Exposure. At December 31, 2024, the Company had $256.2 million of cash collateral received and $0.1 million of cash collateral posted included in Cash and due from banks on the accompanying Consolidated Balance Sheets. In addition, the Company had $1.7 million in initial margin posted at clearing houses. The Company regularly evaluates the credit risk of its derivative customers, taking into account the likelihood of default, net exposures, and remaining contractual life, among other related factors. Credit risk exposure is mitigated as transactions with customers are generally secured by the same collateral of the underlying transactions. Current net credit exposure relating to derivatives with the Bank’s customers was $19.0 million at December 31, 2024. In addition, the Company monitors potential future exposure, representing its best estimate of exposure to remaining contractual maturity. The potential future exposure relating to derivatives with the Bank’s customers totaled $109.2 million at December 31, 2024. The Company has incorporated a credit valuation adjustment (contra-liability) to reflect non-performance risk in the fair value measurement of its derivatives, which totaled $7.6 million and $6.2 million at December 31, 2024, and 2023, respectively. Various factors impact changes in the valuation adjustment over time, such as changes in the credit spreads of the contracted parties, and changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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