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Derivative Instruments
 3 Months Ended
Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments

Derivative instruments, recognized at fair value within other assets or other liabilities on the Consolidated Statements of Financial Condition, were as follows:
 
At March 31, 2020
 
 
 
Fair Value
(In thousands)
Notional Amount(1)
 
Derivative Assets
 
Derivative Liabilities
Derivatives designated as hedging instruments
 
 
 
 
 
Interest rate contract
$
150,000

 
$
—

 
$
3

Forward foreign exchange contracts
167,488

 
5,938

 
—

Total derivatives designated as hedging instruments


 
$
5,938

 
$
3

Derivatives not designated as hedging instruments
 
 
 
 
 
Interest rate contracts
$
5,875,131

 
$
283,410

 
$
15,967

Risk participation agreements
398,579

 
22

 
118

Forward foreign exchange contracts
239,076

 
3,250

 
2,200

Interest rate lock commitments
452,544

 
13,134

 
4

Forward loan sales commitments
539,741

 
26

 
8,819

Power Equity CDs
27,726

 
509

 
509

Swap agreement
12,652

 
—

 
286

Total derivatives not designated as hedging instruments


 
$
300,351

 
$
27,903

Total derivatives before netting


 
306,289

 
27,906

Netting(2)
 
 
(11,433
)
 
(4,731
)
Total derivatives, net
 
 
$
294,856

 
$
23,175

(1)
Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Condition.
(2)
Includes netting of derivative asset and liability balances and related cash collateral, where counterparty netting agreements are in place.

 
At December 31, 2019
 
 
 
Fair Value
(In thousands)
Notional Amount(1)
 
Derivative Assets
 
Derivative Liabilities
Derivatives designated as hedging instruments
 
 
 
 
 
Interest rate contract
$
150,000

 
$
—

 
$
168

Forward foreign exchange contracts
177,593

 
—

 
3,251

Total derivatives designated as hedging instruments


 
$
—

 
$
3,419

Derivatives not designated as hedging instruments
 
 
 
 
 
Interest rate contracts
$
5,095,969

 
$
102,893

 
$
5,872

Risk participation agreements
316,353

 
202

 
354

Forward foreign exchange contracts
262,656

 
—

 
3,268

Interest rate lock commitments
158,111

 
2,772

 
20

Forward loan sales commitments
174,013

 
41

 
289

Power Equity CD
29,009

 
734

 
734

Swap agreement
12,652

 
—

 
356

Total derivatives not designated as hedging instruments


 
$
106,642

 
$
10,893

Total derivatives before netting


 
$
106,642

 
$
14,312

Netting(2)
 
 
(540
)
 
(5,109
)
Total derivatives, net
 
 
$
106,102

 
$
9,203

(1)
Notional or contract amounts, which represent the extent of involvement in the derivatives market, are used to determine the contractual cash flows required in accordance with the terms of the agreement. These amounts are typically not exchanged, significantly exceed amounts subject to credit or market risk and are not reflected in the Consolidated Statements of Financial Condition.
(2)
Includes netting of derivative asset and liability balances and related cash collateral, where counterparty netting agreements are in place.

Derivative instruments may be subject to master netting arrangements and collateral arrangements and qualify for offset in the Consolidated Statements of Financial Condition. A master netting arrangement with a counterparty creates a right of offset for amounts due to and from that same counterparty that is enforceable in the event of a default or bankruptcy. Derivative instruments subject to master netting arrangements and collateral arrangements are recognized on a net basis in the Consolidated Statements of Financial Condition. The gross amounts recognized, gross amounts offset and net amount presented of derivative instruments were as follows:
 
At March 31, 2020
(In thousands)
Gross Amounts Recognized
 
Gross Amounts
 Offset(1)
 
Net Amount Presented
Derivative assets
 
 
 
 
 
Interest rate contracts
$
283,410

 
$
(2,215
)
 
$
281,195

Risk participation agreements
22

 
—

 
22

Forward foreign exchange contracts
9,188

 
(9,188
)
 
—

Interest rate lock commitments
13,134

 
(4
)
 
13,130

Forward loan sales commitments
26

 
(26
)
 
—

Power Equity CDs
509

 
—

 
509

Total derivative assets
$
306,289

 
$
(11,433
)
 
$
294,856

Derivative liabilities
 
 
 
 
 
Interest rate contracts
$
15,970

 
$
(2,215
)
 
$
13,755

Risk participation agreements
118

 
—

 
118

Forward foreign exchange contracts
2,200

 
(2,200
)
 
—

Interest rate lock commitments
4

 
(4
)
 
—

Forward loan sales commitments
8,819

 
(26
)
 
8,793

Power Equity CDs
509

 
—

 
509

Swap agreement
286

 
(286
)
 
—

Total derivative liabilities
$
27,906

 
$
(4,731
)
 
$
23,175

(1)
Includes the amounts with counterparties subject to enforceable master netting arrangements that have been offset in the Consolidated Statements of Financial Condition.

 
At December 31, 2019
(In thousands)
Gross Amounts Recognized
 
Gross Amounts
Offset(1)
 
Net Amount Presented
Derivative assets
 
 
 
 
 
Interest rate contracts
$
102,893

 
$
(492
)
 
$
102,401

Risk participation agreements
202

 
—

 
202

Forward foreign exchange contracts
—

 
—

 
—

Interest rate lock commitments
2,772

 
(7
)
 
2,765

Forward loan sales commitments
41

 
(41
)
 
—

Power Equity CDs
734

 
—

 
734

Total derivative assets
$
106,642

 
$
(540
)
 
$
106,102

Derivative liabilities
 
 
 
 
 
Interest rate contracts
$
6,040

 
$
(491
)
 
$
5,549

Risk participation agreements
354

 
—

 
354

Forward foreign exchange contracts
6,519

 
(4,214
)
 
2,305

Interest rate lock commitments
20

 
(7
)
 
13

Forward loan sales commitments
289

 
(41
)
 
248

Power Equity CD
734

 
—

 
734

Swap agreement
356

 
(356
)
 
—

Total derivative liabilities
$
14,312

 
$
(5,109
)
 
$
9,203


(1)
Includes the amounts with counterparties subject to enforceable master netting arrangements that have been offset in the Consolidated Statements of Financial Condition.

Derivatives Designated as Hedging Instruments

Interest rate contract The carrying amount of the hedged subordinated debt, including the cumulative basis adjustment related to the application of fair value hedge accounting, is recorded in long-term borrowings on the Consolidated Statements of Financial Condition and was as follows:
 
Carrying Amount
 of the Hedged Liability
 
Cumulative Amount of
Fair Value Hedging Adjustments
Included in the Carrying Amount
of the Hedged Liability
(In thousands)
At March 31, 2020
 
At December 31, 2019
 
At March 31, 2020
 
At December 31, 2019
Subordinated bank note - 2025
$
160,340

 
$
151,454

 
$
11,602

 
$
2,773



The following table summarizes the effect of fair value hedge accounting on the Consolidated Statements of Income for the three months ended March 31, 2020 and 2019.
 
Three Months Ended March 31,
(In thousands)
2020
 
2019
Statement of income line where the gain (loss) on the fair value hedge was recorded:
 
 
 
Interest expense on borrowings
$
26,492

 
$
14,857

Gain (loss) on interest rate contract (fair value hedge)
 
 
 
Hedged item
$
(8,830
)
 
$
(2,610
)
Derivative designated as a hedging instrument
8,936

 
2,562

Gain (loss) on interest rate contract recognized in interest expense on borrowings
$
106

 
$
(48
)


Forward foreign exchange contracts The effect of net investment hedges on accumulated other comprehensive income was as follows:
 
Three Months Ended March 31,
(In thousands)
2020
 
2019
Forward foreign exchange contracts
$
13,695

 
$
(3,050
)


Derivatives Not Designated as Hedging Instruments Certain other interest rate contracts, forward foreign exchange contracts, interest rate lock commitments, Power Equity CDs and other contracts have not been designated as hedging instruments. The effect of these derivatives on the Consolidated Statements of Income was as follows:
 
 
Three Months Ended March 31,
(In thousands)
Location of Gain (Loss)
2020
 
2019
Interest rate contracts
Other noninterest income
$
1,662

 
$
(487
)
Risk participation agreements
Other noninterest expense
4,326

 
(321
)
Forward foreign exchange contracts
Other noninterest expense
18,713

 
(4,779
)
Interest rate lock commitments
Net gains on sales of loans and leases
10,378

 
493

Forward loan sales commitments
Net gains on sales of loans and leases
(8,545
)
 
—

Swap agreement
Other noninterest income
(1
)
 
—

Net gain (loss) recognized
 
$
26,533

 
$
(5,094
)


At March 31, 2020 and December 31, 2019, credit risk-related contingent features existed on forward foreign exchange contracts with a notional value of $32.0 million and $23.1 million, respectively. In the event the Corporation is rated less than BB- by Standard and Poor's, the contracts could be terminated or the Corporation may be required to provide approximately $640 thousand and $462 thousand in additional collateral at March 31, 2020 and December 31, 2019, respectively. There were no forward foreign exchange contracts containing credit risk-related features in a liability position at both March 31, 2020 and December 31, 2019.

At March 31, 2020, the Corporation had posted $88.9 million, $1.3 million and $1.7 million of cash collateral related to its interest rate contracts, swap agreements and forward foreign exchange contracts, respectively, and received $10.4 million of cash collateral related to its forward foreign exchange contracts.