XML 24 R13.htm IDEA: XBRL DOCUMENT
v3.24.1.u1

Derivative Instruments and Hedging Activities | 3 Months Ended
--- | ---
Mar. 31, 2024
Derivative Instruments and Hedging Activities |
Derivative Instruments and Hedging Activities | Note 6: Derivative Instruments and Hedging Activities The Company uses derivative financial instruments, which consist of interest rate swaps and interest rate caps, to assist in its interest rate risk management. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative financial instruments are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For derivatives not designated as hedges, the gain or loss is recognized in current earnings. ​ Non-hedge Derivatives ​ The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with large U.S. financial institutions in order to minimize the risk to the Company. These swaps are derivatives, but are not designated as hedging instruments. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument contract is negative, the Company owes the client or counterparty and therefore, the Company has no credit risk. The following table presents a summary of the Company’s interest rate swaps to facilitate customer transactions as of March 31, 2024 and December 31, 2023:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024 | ​ | December 31, 2023
​ | ​ | Notional | ​ | Estimated | ​ | Notional | ​ | Estimated
(dollars in thousands) | ​ | Amount | ​ | Fair Value | ​ | Amount | ​ | Fair Value
Interest rate swap agreements: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | $ | 63,380 | ​ | $ | 8,049 | ​ | $ | 63,814 | ​ | $ | 6,981
Liabilities | ​ |  | 63,380 | ​ |  | (8,049) | ​ |  | 63,814 | ​ |  | (6,981)
Total | ​ | $ | 126,760 | ​ | $ | — | ​ | $ | 127,628 | ​ | $ | —
​ Cash Flow Hedging Derivatives ​ For derivative instruments that are designated and qualify as a cash flow hedge, the aggregate fair value of the derivative instrument is recorded in other assets or other liabilities with any gain or loss related to changes in fair value recorded in accumulated other comprehensive income, net of tax. The gain or loss is reclassified into earnings in the same period during which the hedged asset or liability affects earnings and is presented in the same income statement line item as the earnings effect of the hedged asset or liability. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios. During the next 12 months, the Company estimates that $8.1 million will be reclassified to interest expense, as a reduction of the expense. ​ The following table presents a summary of the Company’s interest rate swaps designated as cash flow hedges as of March 31, 2024 and December 31, 2023:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(dollars in thousands) |  | March 31, 2024 |  | December 31, 2023 | ​
Notional Amount | ​ | $ | 183,000 | ​ | $ | 183,000 | ​
Weighted Average Pay Rate | ​ | ​ | 2.00 | % | ​ | 2.00 | %
Weighted Average Receive Rate | ​ | ​ | 5.48 | % | ​ | 5.48 | %
Weighted Average Maturity (Years) | ​ | ​ | 3.79 | ​ | ​ | 4.04 | ​
Net Unrealized Gain | ​ | $ | 6,756 | ​ | $ | 5,271 | ​
​ The Company purchases interest rate caps, designated as cash flow hedges, of certain deposit liabilities. The interest rate caps require receipt of variable amounts from the counterparties when interest rates rise above the strike price in the contracts. For the three months ended March 31, 2024 and 2023, the company recognized amortization expense on the interest rate caps of $196,000 and $198,000, respectively, which was recorded as a component of interest expense on brokered deposits and FHLB advances. ​ The following table presents a summary of the Company’s interest rate caps designated as cash flow hedges as of March 31, 2024 and December 31, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(dollars in thousands) |  | March 31, 2024 |  | December 31, 2023 | ​
Notional Amount | ​ | $ | 125,000 | ​ | $ | 125,000 | ​
Unamortized Premium Paid | ​ | ​ | 4,885 | ​ | ​ | 5,081 | ​
Weighted Average Strike Rate | ​ | ​ | 0.96 | % | ​ | 0.96 | %
Weighted Average Maturity (Years) | ​ | ​ | 6.10 | ​ | ​ | 6.34 | ​
​ The following table presents a summary of the Company’s interest rate contracts as of March 31, 2024 and December 31, 2023:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2024 | ​ | December 31, 2023
​ | ​ | Notional | ​ | Estimated | ​ | Notional | ​ | Estimated
(dollars in thousands) | ​ | Amount | ​ | Fair Value | ​ | Amount | ​ | Fair Value
Interest rate swap agreements: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | $ | 152,500 | ​ | $ | 7,020 | ​ | $ | 135,000 | ​ | $ | 6,891
Liabilities | ​ | ​ | 30,500 | ​ | ​ | (264) | ​ | ​ | 48,000 | ​ | ​ | (1,620)
Interest rate cap agreements: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | ​ | 125,000 | ​ | ​ | 20,445 | ​ | ​ | 125,000 | ​ | ​ | 18,717
​ The Company is party to collateral support agreements with certain derivative counterparties. These agreements require that the Company maintain collateral based on the fair values of derivative transactions. In the event of default by the Company, the counterparty would be entitled to the collateral. As of March 31, 2024 and December 31, 2023, the Company pledged no cash collateral for the Company’s derivative contracts. In addition, as of March 31, 2024 and December 31, 2023, the Company's counterparties pledged cash collateral to the Company of $36.7 million and $31.8 million, respectively. ​ The following table summarizes gross and net information about derivative instruments that are eligible for offset in the balance sheet at March 31, 2024 and December 31, 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Gross Amounts Not Offset in the Balance Sheet | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Net Amounts of | ​ | ​ | ​ | ​ | ​
​ | ​ | Gross Amounts | ​ | Gross Amounts | ​ | Assets (Liabilities) | ​ | ​ | ​ | ​ | ​
​ | ​ | of Recognized | ​ | Offset in the | ​ | Presented in the | ​ | Financial | ​ | Cash Collateral | ​ | Net Assets
(dollars in thousands) | ​ | Assets (Liabilities) | ​ | Balance Sheet | ​ | Balance Sheet | ​ | Instruments | ​ | Received (Paid) | ​ | (Liabilities)
March 31, 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | $ | 35,514 | ​ | $ | — | ​ | $ | 35,514 | ​ | $ | — | ​ | $ | 36,663 | ​ | $ | (1,149)
Liabilities | ​ |  | (8,313) | ​ |  | — | ​ |  | (8,313) | ​ |  | — | ​ |  | — | ​ |  | (8,313)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
December 31, 2023 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Assets | ​ | $ | 32,589 | ​ | $ | — | ​ | $ | 32,589 | ​ | $ | — | ​ | $ | 31,783 | ​ | $ | 806
Liabilities | ​ | ​ | (8,601) | ​ | ​ | — | ​ | ​ | (8,601) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | (8,601)
​ The following table presents the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income for the three months ended March 31, 2024 and 2023:
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | Three Months Ended March 31,
(dollars in thousands) | ​ | 2024 | ​ | 2023
Derivatives in | ​ | Location of Gain (Loss) | ​ | Gain (Loss)
Cash Flow Hedging | ​ | Reclassified | ​ | Reclassified from
Relationships | ​ | from AOCI into Income | ​ | AOCI into Earnings
Interest rate swaps | ​ | Interest expense | ​ | $ | 1,596 | ​ | $ | 1,177
Interest rate caps | ​ | Interest expense | ​ | ​ | 707 | ​ | ​ | (110)
​ No amounts were reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness for these derivatives during the three months ended March 31, 2024 and 2023, and no amounts are expected to be reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness over the next twelve months.

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 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration