At December 31, 2021 and 2020, the Company’s derivative financial instruments consist of interest rate swaps. The Company’s interest rate swaps are used for three purposes: 1) to mitigate the Company’s exposure to rising interest rates on certain fixed rate loans totaling $299.6 million and $316.1 million at December 31, 2021 and December 31, 2020, respectively; 2) to facilitate risk management strategies for our loan customers with $228.0 million of swaps outstanding, which include $114.0 million with customers and $114.0 million with bank counterparties at December 31, 2021 and $125.6 million of swaps outstanding, which include $62.8 million with customers and $62.8 million with bank counterparties at December 31, 2020; and 3) to mitigate exposure to rising interest rates on certain short-term advances and brokered CDs totaling $996.5 million and $1,021.5 million at December 31, 2021 and December 31, 2020, respectively. Additionally, at December 31, 2020, the Company had swaps outstanding to mitigate the Company’s exposure to rising interest rates on a portion ($18.0 million) of its floating rate junior subordinated debentures that have a contractual value of $61.9 million. These swaps were terminated during the year ended December 31, 2021, realizing a loss of $4.7 million upon termination.

The Company’s derivative instruments are carried at fair value in the Company’s financial statements as part of Other assets for derivatives with positive fair values and Other liabilities for derivatives with negative fair values. The accounting for changes in the fair value of a derivative instrument is dependent upon whether or not it qualifies and has been designated as a hedge for accounting purposes, and further, by the type of hedging relationship.

At December 31, 2021 and 2020, we held derivatives designated as cash flow hedges, fair value hedges and certain derivatives not designated as hedges.

At December 31, 2021 and 2020, derivatives with a combined notional amount of $228.0 million and $143.6 million, respectively, were not designated as hedges. At December 31, 2021 and 2020, derivatives with a combined notional amount of $299.6 million and $316.1 million were designated as fair value hedges. At December 31, 2021 and 2020, derivatives with a combined notional amount of $996.5 million and $1,021.5 million, respectively, were designated as cash flow hedges.

For cash flow hedges, the changes in the fair value of the derivative is reported in accumulated other comprehensive income (loss), net of tax. Amounts in accumulated other comprehensive income (loss) are reclassified into earnings in the same period during which the hedged forecasted transaction effects earnings. During the year ended December 31, 2021, $10.6 million was reclassified from accumulated other comprehensive income (loss) to interest expense. The estimated amount to be reclassified in next 12 months out of accumulated other comprehensive income (loss) into earnings is $10.6 million.

Changes in the fair value of interest rate swaps not designated as hedges are reflected in “Net loss from fair value adjustments” in the Consolidated Statements of Income.

The following table sets forth information regarding the Company’s derivative financial instruments at the periods indicated:

(1)	Derivatives in a net positive position are recorded as “Other assets” and derivatives in a net negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition.

The following table sets forth the effect of derivative instruments on the Consolidated Statements of Income for the periods indicated:


		For the years ended
		December 31,
(In thousands)	Affected Line Item in the Statement Where Net income is Presented	2021		2020		2019
Financial Derivatives:
	Other interest expense	$	(305)	$	(434)	$	(140)
	Net gain (loss) from fair value adjustments		978		(2,325)		(2,981)
Interest rate swaps (non-hedge)			673		(2,759)		(3,121)

Interest rate swaps (fair value hedge)	Interest and fees on loans		(3,481)		(5,226)		(837)

Interest rate swaps (cash flow hedge)	Other interest (expense) income		(10,693)		(6,703)		1,232

Net loss		$	(13,501)	$	(14,688)	$	(2,726)

The Company’s interest rate swaps are subject to master netting arrangements between the Company and its three designated counterparties. The Company has not made a policy election to offset its derivative positions.

The following tables present the effect of the master netting arrangements on the presentation of the derivative assets and liabilities in the Consolidated Statements of Condition as of the dates indicated:

December 31, 2021

Gross Amounts Not Offset in the

Consolidated Statement of

Gross Amount Offset in

Net Amount of Assets

Condition

Gross Amount of

the Statement of

Presented in the Statement of

Financial

Cash Collateral

(In thousands)

Recognized Assets

Condition

Instruments

Received

Net Amount

Interest rate swaps

10,683

—

10,683

—

10,683

Gross Amounts Not Offset in the

Consolidated Statement of

Gross Amount of

Gross Amount Offset in

Net Amount of Liabilities

Condition

Recognized

the Statement of

Presented in the Statement of

Financial

Cash Collateral

(In thousands)

Liabilities

Condition

Instruments

Pledged

Net Amount

Interest rate swaps

25,071

—

25,071

—

21,527

3,544

December 31, 2020

Gross Amounts Not Offset in the

Consolidated Statement of

Gross Amount Offset in

Net Amount of Assets

Condition

Gross Amount of

the Statement of

Presented in the Statement of

Financial

Cash Collateral

(In thousands)

Recognized Assets

Condition

Instruments

Received

Net Amount

Interest rate swaps

1,319

—

1,319

—

1,319

Gross Amounts Not Offset in the

Consolidated Statement of

Gross Amount of

Gross Amount Offset in

Net Amount of Liabilities

Condition

Recognized

the Statement of

Presented in the Statement of

Financial

Cash Collateral

(In thousands)

Liabilities

Condition

Instruments

Pledged

Net Amount

Interest rate swaps

60,987

—

60,987

63,517

(2,629)