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DERIVATIVES AND HEDGING (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Derivative Financial Instruments

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the consolidated statements of condition as of the dates indicated:

						Derivative Assets																		Derivative Liabilities
(Dollars in thousands)						Notional Amount						Location						Fair Value						Notional Amount						Location						Fair Value
September 30, 2023
Derivatives designated as hedging instruments:
Interest rate contracts(1)						$	543,000					Other Assets						$	23,853					$	100,000					Accrued interest and other liabilities						$	2,817
Total derivatives designated as hedging instruments																		$	23,853																	$	2,817
Derivatives not designated as hedging instruments:
Customer loan swaps(1)						$	290,340					Other assets						$	19,785					$	290,340					Accrued interest and other liabilities						$	19,834
Risk participation agreements						28,201						Other assets						—						43,470						Accrued interest and other liabilities						—
Fixed rate mortgage interest rate lock commitments						5,537						Other assets						26						14,159						Accrued interest and other liabilities						154
Forward delivery commitments						10,587						Other assets						198						321						Accrued interest and other liabilities						2
Total derivatives not designated as hedging instruments																		$	20,009																	$	19,990
December 31, 2022
Derivatives designated as hedging instruments:
Interest rate contracts(1)						$	110,000					Other assets						$	13,051					$	133,000					Accrued interest and other liabilities						$	5,515
Total derivatives designated as hedging instruments																		$	13,051																	$	5,515
Derivatives not designated as hedging instruments:
Customer loan swaps(1)						$	260,130					Other assets						$	14,802					$	345,545					Accrued interest and other liabilities						$	14,850
Risk participation agreements						21,818						Other assets						—						53,704						Accrued interest and other liabilities						—
Fixed rate mortgage interest rate lock commitments						4,493						Other assets						31						9,597						Accrued interest and other liabilities						87
Forward delivery commitments						5,259						Other assets						114						—						Accrued interest and other liabilities						—
Total derivatives not designated as hedging instruments																		$	14,947																	$	14,937

(1)    Reported fair values include accrued interest receivable and payable.

The following table shows the carrying amount and associated cumulative basis adjustments related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships:

Location in Consolidated Statements of Condition						Carrying Amount of Hedged Assets/(Liabilities)												Cumulative Fair Value Hedging Adjustment in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)						September 30, 2023						December 31, 2022						September 30, 2023						December 31, 2022
Loans(1)						$	365,905					$	—					$	(9,095)					$	—
Total						$	365,905					$	—					$	(9,095)					$	—

(1)     These amounts include the amortized cost basis of residential real estate loans that were used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period. At September 30, 2023, the amortized cost basis of the residential real estate loans used

in these hedging relationships was $823.8 million and the amount of the designated hedged residential loans was $375.0 million.

Schedule of Cash Flow Hedging Instruments, Location

The table below presents the effect of cash flow hedge accounting, before tax, on AOCI for the periods indicated:

(Dollars in thousands)						Amount of Gain (Loss) Recognized in OCI on Derivative						Amount of Gain (Loss) Recognized in OCI Included Component						Amount of Gain (Loss) Recognized in OCI Excluded Component						Location of Gain (Loss) Recognized from AOCI into Income						Amount of Gain (Loss) Reclassified from AOCI into Income						Amount of Gain (Loss) Reclassified from AOCI into Income Included Component						Amount of Gain (Loss) Reclassified from AOCI into Income Excluded Component
For the Three Months Ended September 30, 2023
Interest rate contracts						$	(130)					$	(130)					$	—					Interest and fees on loans						$	(909)					$	(909)					$	—
Interest rate contracts						2,033						2,033						—						Interest on borrowings						650						650						—
Interest rate contracts						2,013						2,013						—						Interest on junior subordinated debentures						222						222						—
Total						$	3,916					$	3,916					$	—											$	(37)					$	(37)					$	—
For the Nine Months Ended September 30, 2023
Interest rate contracts						$	(812)					$	(812)					$	—					Interest and fees on loans						$	(2,488)					$	(2,488)					$	—
Interest rate contracts						(1)						(1)						—						Interest on deposits						306						306						—
Interest rate contracts						2,755						2,755						—						Interest on borrowings						1,674						1,674						—
Interest rate contracts						2,485						2,485						—						Interest on junior subordinated debentures						538						538						—
Total						$	4,427					$	4,427					$	—											$	30					$	30					$	—
For the Three Months Ended September 30, 2022
Interest rate contracts						$	(1,798)					$	(1,798)					$	—					Interest and fees on loans						$	(121)					$	(121)					$	—
Interest rate contracts						146						146						—						Interest on deposits						189						189						—
Interest rate contracts						$	2,544					2,544												Interest on borrowings						185						185
Interest rate contracts						2,489						2,489												Interest on junior subordinated debentures						(133)						(133)
Total						$	3,381					$	3,381					$	—											$	120					$	120					$	—
For the Nine Months Ended September 30, 2022
Interest rate contracts						$	(5,713)					$	(5,713)					$	—					Interest and fees on loans						$	498					$	498					$	—
Interest rate contracts						5,867						5,867						—						Interest on deposits						72						72						—
Interest rate contracts						2,544						2,544						—						Interest on borrowings						185						185						—
Interest rate contracts						7,906						7,906						—						Interest on junior subordinated debentures						(755)						(755)						—
Total						$	10,604					$	10,604					$	—											$	—					$	—					$	—

The table below presents the effect of fair value and cash flow hedge accounting on the consolidated statements of income for the periods indicated:

						Location and Amount of Gain (Loss) Recognized in Income
						Three Months Ended September 30,
						2023																								2022
(Dollars in thousands)						Interest and fees on loans						Interest on deposits						Interest on borrowings						Interest on junior subordinated debentures						Interest and fees on loans						Interest on deposits						Interest on borrowings						Interest on junior subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded						$	50,115					$	20,969					$	3,577					$	539					$	37,568					$	5,442					$	787					$	539
Gain (loss) on fair value hedging relationships
Interest rate contracts:
Hedged items						$	(2,992)					$	—					$	—					$	—					$	—					$	—					$	—					$	—
Derivatives designated as hedging instruments						$	4,404					$	—					$	—					$	—					$	—					$	—					$	—					$	—
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income						$	(909)					$	—					$	650					$	222					$	(121)					$	189					$	185					$	(133)
Amount of gain (loss) reclassified from AOCI into income - included component						$	(909)					$	—					$	650					$	222					$	(121)					$	189					$	185					$	(133)
Amount of gain (loss) reclassified from AOCI into income - excluded component						$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—

						Location and Amount of Gain (Loss) Recognized in Income
						Nine Months Ended September 30,
						2023																								2022
(Dollars in thousands)						Interest and fees on loans						Interest on deposits						Interest on borrowings						Interest on junior subordinated debentures						Interest and fees on loans						Interest on deposits						Interest on borrowings						Interest on junior subordinated debentures
Total presented on the consolidated statements of income in which the effects of cash flow hedges are recorded						$	144,092					$	56,046					$	9,249					$	1,600					$	102,724					$	9,785					$	1,372					$	1,600
Gain (loss) on fair value hedging relationships
Interest rate contracts:
Hedged items						$	(9,095)					$	—					$	—					$	—					$	—					$	—					$	—					$	—
Derivatives designated as hedging instruments						$	12,190					$	—					$	—					$	—					$	—					$	—					$	—					$	—
Gain (loss) on cash flow hedging relationships
Interest rate contracts:
Amount of gain (loss) reclassified from AOCI into income						$	2,488					$	306					$	1,674					$	538					$	498					$	72					$	185					$	(755)
Amount of gain (loss) reclassified from AOCI into income - included component						$	2,488					$	306					$	1,674					$	538					$	498					$	72					$	185					$	(755)
Amount of gain (loss) reclassified from AOCI into income - excluded component						$	—					$	—					$	—					$	—					$	—					$	—					$	—					$	—

Schedule of Derivatives Not Designated as Hedging Instruments

The table below presents the effect of the Company's derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income for the periods indicated:

						Location of Gain (Loss) Recognized in Income						Amount of Gain (Loss) Recognized in Income
												Three Months Ended September 30,												Nine Months Ended September 30,
(Dollars in thousands)												2023						2022						2023						2022
Customer loan swaps						Other expense						$	(12)					$	28					$	(1)					$	166
Fixed rate mortgage interest rate lock commitments						Mortgage banking income, net						(76)						(473)						(72)						(664)
Forward delivery commitments						Mortgage banking income, net						62						227						82						238
Total												$	(26)					$	(218)					$	9					$	(260)

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