XML 49 R14.htm IDEA: XBRL DOCUMENT
v3.22.1

Derivative Instruments | 3 Months Ended
--- | ---
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments As of March 31, 2022 and December 31, 2021, the Company primarily utilizes non-hedging derivative financial instruments with commercial banking customers to facilitate their interest rate management strategies. For these instruments, the Company acts as an intermediary for its customers and has offsetting contracts with financial institution counterparties. Changes in the fair value of these underlying derivative contracts generally offset each other and do not significantly impact the Company's results of operations. The following table summarizes the notional and fair value of these derivative instruments (in thousands):
| March 31, 2022 | December 31, 2021
| Notional Amount | Fair Value | Notional Amount | Fair Value
Non-hedging interest rate derivatives: |  |  |  |
Customer counterparties: |  |  |  |
Loan interest rate swap - assets | $ | 165,655 |  | $ | 3,495 |  | $ | 532,136 |  | $ | 20,614 |
Loan interest rate swap - liabilities | 507,248 |  | 23,743 |  | 138,138 |  | 3,560 |
Non-hedging interest rate derivatives: |  |  |  |
Financial institution counterparties: |  |  |  |
Loan interest rate swap - assets | 519,857 |  | 24,560 |  | 147,644 |  | 3,867 |
Loan interest rate swap - liabilities | 165,655 |  | 3,495 |  | 535,577 |  | 20,679 |
The following table summarizes the change in fair value of these derivative instruments (in thousands):
|  | Three months ended March 31,
|  | 2022 | 2021
Change in Fair Value Non-Hedging Interest Rate Derivatives: |  |  |  |
Other income (expense) - derivative assets |  |  | $ | 3,076 |  | $ | (22,994) |
Other (expense) income - derivative liabilities |  |  | (3,076) |  | 22,994 |
Other income - derivative liabilities |  |  | 577 |  | 385 |
Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements. The Company's derivative transactions with financial institution counterparties are generally executed under International Swaps and Derivative Association ("ISDA") master agreements which include "right of setoff" provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset financial instruments for financial reporting purposes. Pursuant to the Company's agreements with certain of its derivative financial institution counterparties, the Company may receive collateral or post collateral, which may be in the form of cash or securities, based upon mark-to-mark positions. The Company has posted collateral with a value of $32.1 million and $34.8 million as of March 31, 2022 and December 31, 2021, respectively. Loans associated with a customer counterparty loan interest rate swap agreement may be subject to a make whole penalty upon termination of the agreement. The dollar amount of the make whole penalty varies based on the remaining term of the agreement and market rates at that time. The make whole penalty is secured by equity in the specific collateral securing the loan. The Company estimates the make whole penalty when determining if there is sufficient collateral to pay off both the potential make whole penalty and the outstanding loan balance at the origination of the loan. In the event of a customer default, the make whole penalty is capitalized into the existing loan balance; however, no guarantees can be made that the collateral will be sufficient to cover both the make whole provision and the outstanding loan balance at the time of foreclosure. Fair Value Hedges During the year ended December 31, 2020, the Company entered into a series of fair value hedge agreements to reduce the interest rate risk associated with the change in fair value of certain securities. The total notional amount of these agreements was $150 million and the amortized cost of the hedged assets was $346.5 million and $363.6 million as of March 31, 2022 and December 31, 2021, respectively. During the quarters ended March 31, 2022 and 2021, the fair value hedge agreements were effective. The gains or losses on these hedges are recognized in current earnings as fair value changes. The fair value of these hedges was $10.8 million and $4.3 million at March 31, 2022 and December 31, 2021, respectively, and was included within other assets in the Consolidated Balance Sheets. The following table summarizes the financial statement impact of these derivative instruments (in thousands):
|  |  | March 31, 2022 | December 31, 2021
Investment securities available for sale, at fair value |  |  | $ | (10,846) |  | $ | (4,711) |
Other assets |  |  | 10,753 |  | 4,308 |
Cumulative adjustment to Interest and dividends on investment securities |  |  | 93 |  | 403 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI https://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativesAndFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration