DERIVATIVES AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES AND HEDGING ACTIVITIES:

To reduce the risk of significant interest rate fluctuations on the value of certain assets and liabilities, such as single family mortgage LHFS and MSRs, the Company utilizes derivatives as economic hedges. The notional amounts and fair values for derivatives, which are included in other assets or accounts payable and other liabilities on the consolidated balance sheets consist of the following:


	At December 31, 2022
	Notional amount		Fair value derivatives
(in thousands)			Asset		Liability

Forward sale commitments	$	51,252	$	293	$	(151)

Interest rate lock commitments	17,463		141		(36)
Interest rate swaps	236,533		13,093		(13,093)
Futures	23,000		18		—
Options	14,000		218		—
Total derivatives before netting	$	342,248	$	13,763	$	(13,280)
Netting adjustment/Cash collateral (1)			(12,870)		101
Carrying value on consolidated balance sheet			$	893	$	(13,179)


	At December 31, 2021
	Notional amount		Fair value derivatives
(in thousands)			Asset		Liability

Forward sale commitments	$	793,208	$	723	$	(640)

Interest rate lock commitments	115,025		2,487		(3)
Interest rate swaps	287,352		4,381		(4,541)
Futures	139,900		334		—
Total derivatives before netting	$	1,335,485	7,925		(5,184)
Netting adjustment/Cash collateral (1)			1,355		3,921
Carrying value on consolidated balance sheet			$	9,280	$	(1,263)

(1) Includes net cash collateral received of $12.8 million and paid of $5.3 million at December 31, 2022 and 2021, respectively.

The Company nets derivative assets and liabilities when a legally enforceable master netting agreement exists between the Company and the derivative counterparty. Derivatives are reported at their respective fair values in the other assets or accounts payable and other liabilities line items on the consolidated balance sheets, with changes in fair value reflected in current period earnings.

The following tables present gross fair value and net carrying value information about derivative instruments:



(in thousands)	Gross fair value		Netting adjustments/Cash collateral (1)		Carrying value





At December 31, 2022
Derivative assets	$	13,763	$	(12,870)	$	893




Derivative liabilities	(13,280)		101		(13,179)
At December 31, 2021
Derivative assets	$	7,925	$	1,355	$	9,280
Derivative liabilities	(5,184)		3,921		(1,263)

(1) Includes net cash collateral received of $12.8 million and paid of $5.3 million at December 31, 2022 and 2021, respectively.

The collateral used under the Company's master netting agreements is typically cash, but securities may be used under agreements with certain counterparties. Receivables related to cash collateral that has been paid to counterparties is included in other assets. Payables related to cash collateral that has been received from counterparties is included in accounts payable and other liabilities. Interest is owed on amounts received from counterparties and we earn interest on amounts paid to counterparties. Any securities pledged to counterparties as collateral remain on the consolidated balance sheets. At December 31, 2022 and 2021, the Company had liabilities of $12.8 million and zero, respectively, in cash collateral received from counterparties and receivables of $0.03 million and $5.3 million, respectively, in cash collateral paid to counterparties.

The following table presents the net gain (loss) recognized on economic hedge derivatives, within the respective line items in the consolidated income statements for the periods indicated:


	Years Ended December 31,
(in thousands)	2022		2021		2020

Recognized in noninterest income:
Net gain (loss) on loan origination and sale activities (1)	$	8,587	$	(6,057)	$	(7,675)
Loan servicing income (loss) (2)	(11,769)		(8,238)		20,820
Other (3)	160		386		(421)

(1)Comprised of interest rate lock commitments (" IRLCs") and forward contracts used as economic hedges of single family mortgage LHFS.

(2)Comprised of interest rate swaps, interest rate swaptions, futures, US Treasury options and forward contracts used as economic hedges of single family MSRs.

(3)Impact of interest rate swap agreements executed with commercial banking customers.

The notional amount of open interest rate swap agreements executed with commercial banking customers at December 31, 2022 and 2021 were $237 million and $287 million, respectively.