Balance Sheet Offsetting

3 Months Ended

Mar. 31, 2023

Derivative financial instruments may be eligible for offset in the consolidated statements of financial condition, such as those subject to enforceable master netting arrangements or a similar agreement. Under these agreements, the Company has the right to net settle multiple contracts with the same counterparty. The Company offers an interest rate swap product to qualified customers, which are then paired with derivative contracts the Company enters into with a counterparty bank. While derivative contracts entered into with counterparty banks may be subject to enforceable master netting agreements, derivative contracts with customers may not be subject to enforceable master netting arrangements. With regard to derivative contracts not centrally cleared through a clearinghouse, regulations require collateral to be posted by the party with a net liability position. Parties to a centrally cleared over-the-counter derivative exchange daily payments that reflect the daily change in the value of the derivative. These payments are commonly referred to as variation margin and are treated as settlements of derivative exposure rather than as collateral. The Company elected to account for centrally-cleared derivative contracts on a gross basis, even when the right for setoff are in place. However, for derivative contracts cleared through certain central clearing parties, the fair value of the respective derivative contracts is reported net of the variation margin payments.

Financial instruments that are eligible for offset in the consolidated statements of financial condition as of the periods indicated are presented below:


							Gross Amounts Not Offset in the Consolidated Statements of Financial Condition
(Dollars in thousands)	Gross Amounts Recognized (1)		Gross Amounts Offset in the Consolidated Statements of Financial Condition		Net Amounts Presented in the Consolidated Statements of Financial Condition		Financial Instruments (2)		Cash Collateral (3)		Net Amount
March 31, 2023
Derivative assets:
Interest rate swaps	$	5,630	$	—	$	5,630	$	—	$	(4,720)	$	910
Total	$	5,630	$	—	$	5,630	$	—	$	(4,720)	$	910

Derivative liabilities:
Interest rate swaps	$	10,569	$	—	$	10,569	$	—	$	—	$	10,569
Total	$	10,569	$	—	$	10,569	$	—	$	—	$	10,569





December 31, 2022
Derivative assets:
Interest rate swaps	$	7,053	$	—	$	7,053	$	—	$	(5,440)	$	1,613
Total	$	7,053	$	—	$	7,053	$	—	$	(5,440)	$	1,613

Derivative liabilities:
Interest rate swaps	$	12,530	$	—	$	12,530	$	—	$	—	$	12,530
Total	$	12,530	$	—	$	12,530	$	—	$	—	$	12,530

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(1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable.

(2) Represents the fair value of securities pledged with counterparty bank.

(3) Represents cash collateral received from or pledged with counterparty bank. Amounts are limited to the derivative asset or liability balance and, accordingly, do not include excess collateral, if any, received or pledged.