DERIVATIVES AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2024

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, all of which are economic hedges, are included in other assets or accounts payable and other liabilities on the consolidated balance sheets, consist of the following:


	At December 31, 2024
	Notional amount		Fair value derivatives
(in thousands)			Asset		Liability

Forward sale commitments	$	87,912	$	237	$	(402)

Interest rate lock commitments	16,757		175		(49)
Interest rate swaps	222,917		10,250		(10,250)
Futures	5,200		1		—
Options	5,800		3		—
Total derivatives before netting	$	338,586	10,666		(10,701)
Netting adjustment/Cash collateral (1)			(10,388)		219
Carrying value on consolidated balance sheet			$	278	$	(10,482)


	At December 31, 2023
	Notional amount		Fair value derivatives
(in thousands)			Asset		Liability

Forward sale commitments	$	87,509	$	151	$	(288)

Interest rate lock commitments	21,790		411		—
Interest rate swaps	235,521		10,489		(10,492)
Futures	12,200		—		(3)
Options	9,300		132		—
Total derivatives before netting	$	366,320	11,183		(10,783)
Netting adjustment/Cash collateral (1)			(10,119)		195
Carrying value on consolidated balance sheet			$	1,064	$	(10,588)

(1) Includes net cash collateral received of $10.2 million and $9.9 million at December 31, 2024 and 2023, 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 for derivative instruments:



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





At December 31, 2024
Derivative assets	$	10,666	$	(10,388)	$	278




Derivative liabilities	(10,701)		219		(10,482)
At December 31, 2023
Derivative assets	$	11,183	$	(10,119)	$	1,064
Derivative liabilities	(10,783)		195		(10,588)

(1) Includes net cash collateral received of $10.2 million and $9.9 million at December 31, 2024 and 2023, 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 are included in other assets. Payables related to cash collateral that has been received from counterparties are included in accounts payable and other liabilities. Interest is owed on amounts received from counterparties and we earn interest on cash paid to counterparties. Any securities pledged to counterparties as collateral remain on the consolidated balance sheets. At December 31, 2024 and 2023, the Company had liabilities of $10.4 million and $10.1 million, respectively, in cash collateral received from counterparties and receivables of $195 thousand and $218 thousand, 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)	2024		2023

Recognized in noninterest income:
Net gain (loss) on loan origination and sale activities (1)	$	224	$	804
Loan servicing income (loss) (2)	(1,230)		(1,255)
Other (3)	3		(3)

(1)Comprised of forward contracts used as an economic hedge of loans held for sale and interest rate lock commitments ("IRLCs") to customers.

(2)Comprised of 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 and broker dealer counterparties.

The notional amount of open interest rate swap agreements executed with commercial banking customers and broker dealer counterparties at December 31, 2024 and 2023 were $223 million and $236 million, respectively.