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DERIVATIVES

12 Months Ended

Dec. 31, 2022

DERIVATIVES

DERIVATIVES

NOTE 21 – DERIVATIVES

In 2020, the Company entered into an interest rate cap derivative contract (“interest rate cap” or “contract”) as a part of its asset liability management strategy to help manage its interest rate risk position. The interest rate cap had a notional amount of $300.0 million and a contractual maturity of March 1, 2025. The notional amount of the interest rate cap does not represent the amount exchanged by the parties. The amount exchanged was determined by reference to the notional amount and the other terms of the contract. The interest rate subject to the cap was 30-day LIBOR.

The interest rate cap was designated as a cash flow hedge of certain deposit liabilities of the Company. The hedge was determined to be highly effective during 2022 until it was terminated in the third quarter of 2022. The unrecognized value of $12.7 million at termination will be released from Accumulated Other Comprehensive Income and recorded as a credit to Licensing fees expense through March 2025.

The following tables reflect the derivatives recorded on the balance sheet (in thousands):

​	​	​	​	​	​	​
​	​	​	Notional	​	​	Fair
​	​	​	Amount	​	​	Value
At December 31, 2022	​	​	​	​	​	​
Derivatives designated as hedges:	​	​	​	​	​	​
Interest rate caps related to customer deposits	​	$	—	​	$	—
Total included in Other Assets	​	$	—	​	$	—
​	​	​	​	​	​	​
At December 31, 2021	​	​	​	​	​	​
Derivatives designated as hedges:	​	​	​	​	​	​
Interest rate caps related to customer deposits	​	$	300,000	​	$	3,385
Total included in Other Assets	​	$	300,000	​	$	3,385

​

The effect of cash flow hedge accounting on accumulated other comprehensive income is as follows (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	​
​	​	Year ended December 31,
​		2022			2021			2020
Interest rate caps related to customer deposits	​	​	​	​	​	​	​	​	​
Amount of gain (loss) recognized in OCI, net of tax	​	$	8,131	​	$	2,059	​	$	(1,311)
Amount of gain (loss) reclassified from OCI into income	​	$	1,949	​	$	—	​	$	—
Location of gain (loss) reclassified from OCI into income	​		Licensing fees	​		N/A	​		N/A

​

​

X

- References

No definition available.

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- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI https://asc.fasb.org/topic&trid=2229140

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 50
-Paragraph 5
-Subparagraph (f)
-URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008

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