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Financial Instruments | 12 Months Ended
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Dec. 31, 2023
Investments, All Other Investments [Abstract] |
Financial Instruments | FINANCIAL INSTRUMENTS The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments and are classified as Level 1 in the fair value hierarchy. The carrying value of bank debt approximates fair value, as the interest rate on the bank debt is variable and approximates current market rates. As a result, the fair value measurement of our bank debt is classified as Level 2 in the fair value hierarchy. Concentrations of Credit Risk - Financial instruments that may subject us to concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with highly-rated financial institutions, limiting the amount of credit exposure with any one financial institution. Our client base consists of large numbers of geographically diverse customers dispersed throughout the United States; thus, concentration of credit risk with respect to accounts receivable is not significant. Available-For-Sale Debt Securities - Available-for-sale debt securities consist primarily of corporate and municipal bonds. The net par values of these securities total $40.0 million and $44.4 million at December 31, 2023 and 2022, respectively. The bonds have maturity dates or callable dates ranging from January 2024 through December 2025, and are included in “Funds held for clients — current” in the accompanying Consolidated Balance Sheets based on our intent and ability to sell these investments at any time under favorable conditions. At December 31, 2023 and December 31, 2022, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments. The following table summarizes our bond activity for the years ended December 31, 2023 and 2022 (in thousands):
| 2023 |  | 2022
Fair value at January 1 | $ | 43,485 |  |  | $ | 38,670 |
Purchases | 14,122 |  |  | 19,771 |
Redemptions | (3,310) |  |  | (5,630) |
Maturities | (15,155) |  |  | (6,770) |
Change in bond premium | (1,099) |  |  | (645) |
Fair market value adjustment | 1,416 |  |  | (1,911) |
Fair value at December 31 | $ | 39,459 |  |  | $ | 43,485 |
In addition to the available-for-sale securities discussed above, we also held other depository assets in the amount of $1.0 million and $0.9 million at December 31, 2023 and December 31, 2022, respectively. Those depository assets are classified as Level 1 in the fair value hierarchy. Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2022 credit facility, or the forecasted acquisition of such liability. To mitigate counterparty credit risk, we only enter into contracts with selected major financial institutions with investment grade ratings and continually assess their creditworthiness. There are no credit risk-related contingent features in our interest rate swaps nor do the swaps contain provisions under which we would be required to post collateral. We do not purchase or hold any derivative instruments for trading or speculative purposes. The designation of a derivative instrument as a hedge and its ability to meet the hedge accounting criteria determine how we reflect the change in fair value of the derivative instrument. A derivative qualifies for hedge accounting treatment if, at inception, it meets defined correlation and effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging instrument substantially offset those of the position being hedged. We had no fair value hedging instruments at December 31, 2023 or 2022. Our interest rate swaps are designated as cash flow hedges. Accordingly, the interest rate swaps are recorded as either an asset or liability in the accompanying Consolidated Balance Sheets at fair value. The mark-to-market gains or losses on the swaps are deferred and included as a component of accumulated other comprehensive income (“AOCI”), net of tax, to the extent the hedge is determined to be effective, and reclassified to interest expense in the same period during which the hedged transaction affects earnings. The interest rate swaps are assessed for effectiveness and continued qualification for hedge accounting on a quarterly basis. For the years ended December 31, 2023 and 2022, the interest rate swaps were deemed to be effective. As a result of the 2022 credit facility, CBIZ amended the interest rate swap agreements with respect to the existing swaps. Effective May 16, 2022, the scheduled reset date, the interest rate of the swaps are set to one-month term SOFR to align the swaps to term SOFR in the 2022 credit facility as a result of reference rate reform. No other terms under the swap agreements were amended. As of December 31, 2023, we have five interest rate swaps outstanding. Under the terms of the interest rate swaps, we pay interest at a fixed rate of interest plus applicable margin as stated in the amended agreements, and receive interest that varies with the one-month term SOFR. The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Consolidated Balance Sheets at December 31, 2023 and 2022 (in thousands). Refer to Note 7, Fair Value Measurements, to the accompanying consolidated financial statements for additional disclosures regarding fair value measurements.
| December 31, 2023
| Notional Amount |  | Fixed Rate |  | Expiration |  | Fair Value |  | Balance Sheet Location
Interest rate swap | $ | 50,000 |  |  | 0.834 | % |  | 4/14/2025 |  | $ | 2,282 |  |  | Other non-current asset
Interest rate swap | $ | 30,000 |  |  | 1.186 | % |  | 12/14/2026 |  | $ | 2,125 |  |  | Other non-current asset
Interest rate swap | $ | 20,000 |  |  | 2.450 | % |  | 8/14/2027 |  | $ | 784 |  |  | Other non-current asset
Interest rate swap (1) | $ | 25,000 |  |  | 3.669 | % |  | 4/14/2028 |  | $ | (129) |  |  | Other non-current liability
Interest rate swap (2) | $ | 25,000 |  |  | 4.488 | % |  | 10/14/2028 |  | $ | (1,063) |  |  | Other non-current liability
(1) Entered into during the first quarter of 2023. (2) Entered into during the fourth quarter of 2023.
| December 31, 2022
| Notional Amount |  | Fixed Rate |  | Expiration |  | Fair Value |  | Balance Sheet Location
Interest rate swap (3) | $ | 15,000 |  |  | 2.571 | % |  | 6/1/2023 |  | $ | 133 |  |  | Other current asset
Interest rate swap | $ | 50,000 |  |  | 0.834 | % |  | 4/14/2025 |  | $ | 3,726 |  |  | Other non-current asset
Interest rate swap | $ | 30,000 |  |  | 1.186 | % |  | 12/14/2026 |  | $ | 2,871 |  |  | Other non-current asset
Interest rate swap | $ | 20,000 |  |  | 2.450 | % |  | 8/14/2027 |  | $ | 1,079 |  |  | Other non-current asset
(3) Expired during the second quarter of 2023. During the next twelve months, the amount of the December 31, 2023 AOCI balance that will be reclassified to earnings is expected to be immaterial. The following table summarizes the effects of the interest rate swap on our accompanying Consolidated Statements of Comprehensive Income for the years ended December 31, 2023 and 2022 (in thousands):
| Gain recognized in AOCI, net of tax |  | Gain reclassified from AOCI into expense |  |
| Twelve Months Ended December 31, |  | Twelve Months Ended December 31, |  | Location
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
Interest rate swaps | $ | 393 |  |  | $ | 6,255 |  |  | $ | 4,285 |  |  | $ | 357 |  |  | Interest expense

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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