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Derivative Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivative and Hedging Activities The Corporation enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the values of which are determined by interest and currency rates as well as other economic conditions. The contract or notional amount of a derivative is used to determine, along with the other terms of the derivative, the amounts to be exchanged between the counterparties. The Corporation is exposed to credit risk in the event of nonperformance by counterparties to financial instruments. To mitigate the counterparty risk, contracts generally contain language outlining collateral pledging requirements for each counterparty. For non-centrally cleared derivatives, collateral must be posted when the market value exceeds certain mutually agreed upon threshold limits. Securities and cash are often pledged as collateral. The Corporation pledged $81 million and $93 million of investment securities as collateral at December 31, 2024, and 2023, respectively. Cash is often pledged as collateral for derivatives that are not centrally cleared. The Corporation's required cash collateral was immaterial at December 31, 2024, compared to $5 million at December 31, 2023. See Note 17 for fair value information and disclosures and see Note 1 for the Corporation's accounting policy for derivative and hedging activities. Fair Value Hedges Fair value hedges of interest rate risk: The Corporation is exposed to changes in the fair value of its fixed-rate debt due to changes in benchmark interest rates. The Corporation uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rates. Interest rate swaps designated as fair value hedges involve receiving payment of fixed-rate amounts from a counterparty in exchange for the Corporation paying variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. Fair value hedges of foreign currency exchange rate risk: The Corporation is exposed to changes in the fair value of its foreign currency denominated loans due to changes in foreign currency exchange rates. The Corporation uses foreign currency exchange forward contracts to manage its exposure to changes in fair value on these foreign currency denominated loans. Cash Flow Hedges The Corporation's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Corporation uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve receiving fixed-rate amounts from a counterparty in exchange for the Corporation making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. These items, along with the net interest from the derivative, are reported in the same income statement line as the interest income from the floating-rate assets. Non-Designated Hedges Derivatives to Accommodate Customer Needs Derivatives not designated as hedges may be used to manage the Corporation's exposure to interest or foreign exchange rate movements, or to provide a service to customers, but do not meet the requirements for hedge accounting under U.S. GAAP. Derivatives not designated as hedges are not entered into for speculative purposes. The Corporation executes interest rate swaps or forward currency exchange forwards with commercial lending customers to facilitate their respective risk management strategies. These derivative contracts with customers are simultaneously offset by derivative contracts that the Corporation executes with a third party, such that the Corporation minimizes its net risk exposure resulting from such transactions. As these interest rate swaps and foreign currency exchange forwards do not meet the hedge accounting requirements, changes in the fair value of both the customer swaps and the offsetting swaps are recognized directly in earnings in capital markets, net. The Corporation also enters into credit risk participation agreements with financial institution counterparties for interest rate swaps related to loans as either a participant or a lead bank. The risk participation agreements entered into by the Corporation as a participant bank provide credit protection to the financial institution counterparty should the borrower fail to perform on its interest rate derivative contract with that financial institution. Mortgage Derivatives Interest rate lock commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments, and the fair values of these commitments are recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net on the consolidated statements of income. Interest rate-related instruments for MSRs hedge: The fair value of the Corporation's MSRs asset changes in response to changes in primary mortgage loan rates and other assumptions. To mitigate the earnings volatility caused by changes in the fair value of MSRs, the Corporation designates certain financial instruments as an economic hedge. Changes in the fair value of these instruments are generally expected to partially offset changes in the fair value of MSRs and are recorded in other assets and accrued expenses and other liabilities on the consolidated balance sheets with the changes in fair value recorded as a component of mortgage banking, net on the consolidated statements of income. The following table presents the total notional amounts and gross fair values of the Corporation's derivatives, as well as the balance sheet netting adjustments as of December 31, 2024 and December 31, 2023. The derivative assets and liabilities are presented on a gross basis prior to the application of bilateral collateral and master netting agreements, but after the variation margin payments with central clearing organizations have been applied as settlement, as applicable. Total derivative assets and liabilities are adjusted to take into consideration the effects of legally enforceable master netting agreements and cash collateral received or paid as of December 31, 2024 and December 31, 2023. The resulting net derivative asset and liability fair values are included in other assets and accrued expenses and other liabilities, respectively, on the consolidated balance sheets.
|  | December 31, 2024 | December 31, 2023
|  | Asset | Liability | Asset | Liability
($ in thousands) |  | Notional Amount | Fair Value | Notional Amount | Fair Value | Notional Amount | Fair Value | Notional Amount | Fair Value
Designated as hedging instruments: |  |  |  |  |  |  |  |  |
Interest rate-related instruments(a) |  | $ | 1,950,000 |  | $ | 2,960 |  | $ | 1,150,000 |  | $ | 2,976 |  | $ | 2,300,000 |  | $ | 8,075 |  | $ | 550,000 |  | $ | 930 |
Foreign currency exchange forwards |  | 127,518 |  | 2,457 |  | 216,665 |  | 563 |  | 231,566 |  | 632 |  | 189,212 |  | 2,946 |
Total designated as hedging instruments |  |  | 5,418 |  |  | 3,539 |  |  | 8,707 |  |  | 3,876 |
Not designated as hedging instruments: |  |  |  |  |  |  |  |  |
Interest rate-related and other instruments |  | 3,858,867 |  | 88,541 |  | 6,992,894 |  | 170,928 |  | 3,603,513 |  | 111,623 |  | 6,528,471 |  | 195,662 |
Foreign currency exchange forwards |  | 68,028 |  | 4,315 |  | 74,199 |  | 4,106 |  | 87,526 |  | 2,954 |  | 135,654 |  | 2,746 |
Mortgage banking(b)(c) |  | 28,580 |  | 580 |  | 85,000 |  | — |  | 29,490 |  | 439 |  | 51,500 |  | 673 |
Total not designated as hedging instruments |  |  | 93,436 |  |  | 175,034 |  |  | 115,016 |  |  | 199,082 |
Gross derivatives before netting |  |  | 98,854 |  |  | 178,573 |  |  | 123,723 |  |  | 202,958 |
Less: Legally enforceable master netting agreements | 12,667 |  |  | 12,667 |  |  | 18,234 |  |  | 18,234 |
Less: Cash collateral pledged/received | 35,190 |  |  | 250 |  |  | 35,855 |  |  | — |
Total derivative instruments, after netting | $ | 50,997 |  |  | $ | 165,656 |  |  | $ | 69,634 |  |  | $ | 184,724 |
(a) The notional amounts of the interest rate-related instruments designated as hedging instruments include forward starting interest rate swaps with an effective date ranging from February 1, 2025 to March 1, 2025. The asset notional amount and fair value on such swaps were $100 million and approximately $333,000, respectively. The liability notional amount and fair value on such swaps were $300 million and $1 million, respectively. (b) The notional amount of the mortgage derivative asset includes interest rate lock commitments, while the notional amount of the mortgage derivative liability includes forward commitments. (c) At December 31, 2024, the mortgage derivative asset included approximately $254,000 of forward commitments fair value. The following table presents amounts that were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges:
| Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included
| Carrying Amount of the Hedged Assets/(Liabilities)(a) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities) | Carrying Amount of the Hedged Assets/(Liabilities)(a) | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
($ in thousands) | December 31, 2024 | December 31, 2023
Other long-term funding | $ | (296,004) |  | $ | 3,996 |  | $ | (548,634) |  | $ | 1,366 |
FHLB Advances | (592,256) |  | 7,744 |  | (590,287) |  | 9,713 |
Total | $ | (888,260) |  | $ | 11,740 |  | $ | (1,138,921) |  | $ | 11,079 |
(a) Excludes hedged items where only foreign currency risk is the designated hedged risk. At December 31, 2024 and 2023, the carrying amount excluded for foreign currency denominated loans was $344 million and $421 million, respectively. The Corporation terminated its $500 million fair value hedge during the fourth quarter of 2019. At December 31, 2024, the amortized cost basis of the closed portfolios which had previously been used in the terminated hedging relationship was $219 million and is included in loans on the consolidated balance sheets. This amount includes approximately $839,000 of hedging adjustments on the discontinued hedging relationships, which are not presented in the table above. The tables below identify the effect of fair value and cash flow hedge accounting on the Corporation's consolidated statements of income:
| Location and Amount Recognized on the Consolidated Statements of Income in Fair Value and Cash Flow Hedging Relationships
| For the Years Ended December 31,
| 2024 | 2023 | 2022
($ in thousands) | Interest Income | Interest Expense | Interest Income | Interest Expense | Loss on Mortgage Portfolio Sale | Interest Income | Interest Expense
Total amounts of income/expense presented on the consolidated statements of income in which the effects of the fair value or cash flow hedges are recorded(a) | $ | (16,695) |  | $ | 19,189 |  | $ | (14,176) |  | $ | 17,536 |  | $ | (125) |  | $ | (263) |  | $ | 334 |
The effects of fair value and cash flow hedging: Impact on fair value hedging relationships in Subtopic 815-20 |  |  |  |  |  |  |
Interest contracts: |  |  |  |  |  |  |
Hedged items | (217) |  | (661) |  | (245) |  | 5,084 |  | (125) |  | (529) |  | (16,163) |
Derivatives designated as hedging instruments(a) | (16,478) |  | 19,850 |  | (13,930) |  | 12,451 |  | — |  | 266 |  | 16,497 |
(a) Includes net settlements on the derivatives.
| Location and Amount Recognized on the Consolidated Statements of Income in Fair Value Hedging Relationships
| For the Years Ended December 31,
| 2024 | 2023 | 2022
($ in thousands) | Capital Markets, Net | Capital Markets, Net | Capital Markets, Net
Total amounts of income/expense presented on the consolidated statements of income in which the effects of fair value hedges are recorded | $ | (3) |  | $ | — |  | $ | (9) |
The effects of fair value hedging: Impact on fair value hedging relationships in Subtopic 815-20 |  |  |
Foreign currency contracts: |  |  |
Hedged items | (31,226) |  | 9,322 |  | (26,686) |
Derivatives designated as hedging instruments | 31,223 |  | (9,322) |  | 26,677 |
The following table presents the effect of cash flow hedge accounting on accumulated other comprehensive income (loss):
| For the Years Ended December 31,
($ in thousands) | 2024 | 2023 | 2022
Interest rate-related instruments designated as cash flow hedging instruments |  |  |
Amount of (loss) income recognized in OCI on cash flow hedge derivative(a) | $ | (21,537) |  | $ | (13,254) |  | $ | 3,626 |
Amount of loss (gain) reclassified from accumulated other comprehensive income (loss) into interest income(a) | 16,478 |  | 13,930 |  | (266) |
(a) The entirety of gains (losses) recognized in OCI as well as those reclassified from accumulated other comprehensive income (loss) into interest income were included components in the assessment of hedge effectiveness. Amounts reported in accumulated other comprehensive income (loss) related to cash flow hedge derivatives are reclassified to interest income as interest payments are made on the hedged variable interest rate assets. The Corporation estimates that $1 million will be reclassified as a decrease to interest income over the next 12 months. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations, or the addition of other hedges subsequent to December 31, 2024. The maximum length of time over which the Corporation is hedging its exposure to the variability in future cash flows is 36 months as of December 31, 2024. The table below identifies the effect of derivatives not designated as hedging instruments on the Corporation's consolidated statements of income:
| Consolidated Statements of Income Category of Gain / (Loss) Recognized in Income | For the Years Ended December 31,
($ in thousands) | 2024 | 2023 | 2022
Derivative Instruments |  |  |  |
Interest rate-related and other instruments — customer and mirror, net | Capital markets, net | $ | (133) |  | $ | 392 |  | $ | 515 |
Interest rate-related instruments — MSRs hedge | Mortgage banking, net | (6,531) |  | (1,096) |  | (12,622) |
Foreign currency exchange forwards | Capital markets, net | (371) |  | 1,670 |  | 203 |
Commodity contracts | Capital markets, net | — |  | — |  | (16) |
Interest rate lock commitments (mortgage) | Mortgage banking, net | (113) |  | 353 |  | (2,531) |
Forward commitments (mortgage) | Mortgage banking, net | 927 |  | (627) |  | (123) |

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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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