The Company has entered into interest rate swaps, caps and collars designated as cash flow hedges with the objective of limiting the variability of interest payment cash flows. The Company has also entered into interest rate swaps designated as fair value hedges designed to hedge changes in the fair value of outstanding fixed rate instruments caused by fluctuations in the benchmark interest rate. Changes in fair value of derivative instruments designated as cash flow hedges are reported in accumulated other comprehensive income. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings, as is the offsetting gain or loss on the hedged item.

The following table summarizes the Company's derivatives designated as hedging instruments as of the dates indicated (in thousands):


	December 31, 2023						December 31, 2022

	Notional Amount		Fair Value(1)				Notional Amount		Fair Value(1)
			Asset		Liability				Asset		Liability
Derivatives designated as cash flow hedges:
Interest rate swaps	$	3,215,000	$	—	$	(1,048)	$	1,970,000	$	941	$	(1,514)
Interest rate caps purchased	200,000		10,157		—		200,000		15,673		—
Interest rate collar	125,000		84		—		125,000		—		(203)
Derivatives designated as fair value hedges:
Pay-fixed interest rate swaps	100,000		—		—		100,000		—		—
	$	3,640,000	$	10,241	$	(1,048)	$	2,395,000	$	16,614	$	(1,717)

The following table provides information about the amount of gain (loss) related to derivatives designated as cash flow hedges reclassified from AOCI into interest income or expense for the periods indicated (in thousands):


	Years Ended December 31,
		2023		2022		2021
Location of gain (loss) reclassified from AOCI into income:
Interest expense on borrowings		$	44,790	$	(4,224)	$	(51,739)
Interest expense on deposits		23,569		4,357		—
Interest income on loans		(2,620)		(43)		—
		$	65,739	$	90	$	(51,739)

During the years ended December 31, 2023 and 2022, no derivative positions designated as cash flow hedges were discontinued and none of the gains and losses reported in AOCI were reclassified into earnings as a result of the discontinuance of cash flow hedges or because of the early extinguishment of debt. During the year ended December 31, 2021, derivative positions designated as cash flow hedges with a notional amount totaling $401 million were discontinued following the Company's determination that the hedged forecasted transactions were not probable of occurring. A loss of $33.4 million, net of tax, was reclassified from AOCI into earnings as a result of the discontinuance of the cash flow hedges.

As of December 31, 2023, the amount of net gain expected to be reclassified from AOCI into earnings during the next twelve months was $38.4 million, based on the forward curve. See Note 11 to the consolidated financial statements for additional information about the reclassification adjustments from AOCI into earnings.

The amount of gain (loss) related to derivatives designated as fair value hedges recognized in earnings was insignificant for all applicable periods. The following table provides information about the hedged items related to derivatives designated as fair value hedges at the date indicated (in thousands):


	December 31, 2023		December 31, 2022		Location in Consolidated Balance Sheets
Contractual balance outstanding of hedged item (1)	$	100,000	$	100,000	Loans
Cumulative fair value hedging adjustments	$	(1,656)	$	(3,923)	Loans

(1)This amount is included in the amortized cost basis of a closed portfolio of loans used to designate hedging relationships in a portfolio layer method hedge in which the hedged item is anticipated to be outstanding for the designated hedge period. The amortized cost basis of the closed portfolio used in this hedging relationship was $992 million and $1 billion, respectively, at December 31, 2023 and 2022.

The Company enters into interest rate derivative contracts with certain of its commercial borrowers to enable those borrowers to manage their exposure to interest rate fluctuations. To mitigate interest rate risk associated with these derivative contracts, the Company enters into offsetting derivative contract positions with primary dealers. These interest rate derivative contracts are not designated as hedging instruments; therefore, changes in the fair value of these derivatives are recognized immediately in earnings. The impact on earnings related to changes in fair value of these derivatives was $8.7 million, $4.7 million, and $6.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Company may be exposed to credit risk in the event of non-performance by the counterparties to its interest rate derivative agreements. The Company assesses the credit risk of its financial institution counterparties by monitoring publicly available credit rating and financial information. The Company manages dealer credit risk by entering into interest rate derivatives only with primary and highly rated counterparties, the use of ISDA master agreements, central clearing mechanisms and counterparty limits. The agreements contain bilateral collateral arrangements with the amount of collateral to be posted generally governed by the settlement value of outstanding swaps. The Company manages the risk of default by its commercial borrower counterparties through its normal loan underwriting and credit monitoring policies and procedures. The Company does not currently anticipate any significant losses from failure of interest rate derivative counterparties to honor their obligations.

The following table summarizes the Company's derivatives not designated as hedging instruments as of the dates indicated (in thousands):


	December 31, 2023						December 31, 2022

	Notional Amount		Fair Value(1)				Notional Amount		Fair Value(1)
			Asset		Liability				Asset		Liability
Derivatives not designated as hedges:
Pay-fixed interest rate swaps	$	2,166,813	$	76,793	$	(16,702)	$	1,916,719	$	67,942	$	(2,195)
Pay-variable interest rate swaps	2,166,813		16,702		(77,257)		1,916,719		2,195		(120,320)
Interest rate caps purchased	65,610		1,922		—		42,920		1,988		—
Interest rate caps sold	65,610		—		(1,922)		42,920		—		(1,988)
	$	4,464,846	$	95,417	$	(95,881)	$	3,919,278	$	72,125	$	(124,503)

Some of the Company’s ISDA master agreements with financial institution counterparties contain provisions that permit either counterparty to terminate the agreements and require settlement in the event that regulatory capital ratios fall below certain designated thresholds, upon the initiation of other defined regulatory actions or upon suspension or withdrawal of the Bank’s credit rating. Currently, there are no circumstances that would trigger these provisions of the agreements.

The Company does not offset assets and liabilities under master netting agreements for financial reporting purposes. Information on interest rate swaps and caps subject to these agreements is as follows at the dates indicated (in thousands):


	December 31, 2023

			Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized						Derivative Instruments		Collateral Pledged		Net Amount
Derivative assets	$	88,956	$	—	$	88,956	$	(15,154)	$	(73,730)	$	72
Derivative liabilities	(17,750)		—		(17,750)		15,154		2,596		—
	$	71,206	$	—	$	71,206	$	—	$	(71,134)	$	72


	December 31, 2022

			Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized						Derivative Instruments		Collateral Pledged		Net Amount
Derivative assets	$	86,544	$	—	$	86,544	$	(3,912)	$	(79,447)	$	3,185
Derivative liabilities	(3,912)		—		(3,912)		3,912		—		—
	$	82,632	$	—	$	82,632	$	—	$	(79,447)	$	3,185

The difference between the amounts reported for interest rate swaps subject to master netting agreements and the total fair value of interest rate contract derivative financial instruments reported in the consolidated balance sheets is related to interest rate derivative contracts not subject to master netting agreements.

The Company purchases and sells credit protection under RPAs with the objective of sharing with financial institution counterparties some of the credit exposure related to interest rate derivative contracts entered into with commercial borrowers related to participations purchased or sold. The Company will make or receive payments under these agreements if a customer defaults on an obligation to perform under certain interest rate derivative contracts. At December 31, 2023 and 2022, the notional amount of the RPAs was $363 million and $202 million, respectively. The fair value of these derivatives was not material at December 31, 2023 and 2022.