Derivative Financial Instruments

12 Months Ended

Dec. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commitments to originate residential mortgage loans held for sale and forward commitments to sell residential mortgage loans are considered derivative instruments. See Note 18 for further information.

The Company has certain interest rate derivative positions that are not designated as hedging instruments. Derivative assets and liabilities are recorded at fair value on the Consolidated Statements of Financial Condition and do not take into account the effects of master netting agreements. Master netting agreements allow the Company to settle all derivative contracts held with a single counterparty on a net basis, and to offset net derivative positions with related collateral, where applicable. These derivative positions relate to transactions in which the Company enters into an interest rate swap with a client while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each transaction, the Company agrees to pay interest to the client on a notional amount at a variable interest rate and receive interest from the client on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the client to effectively convert a variable rate loan to a fixed rate. Because the terms of the swaps with the customers and the other financial institution offset each other, with the only difference being counterparty credit risk, changes in the fair value of the underlying derivative contracts are not materially different and do not significantly impact the Company’s results of operations.

The following table shows the amounts of non-hedging derivative financial instruments at December 31, 2023 and 2022.


			Asset derivatives			Liability derivatives
(Dollars in thousands)	Notional or contractual amount		Statement of Financial Condition classification	Fair value		Statement of Financial Condition classification	Fair value
Interest rate swap contracts	$	1,085,618	Other assets	$	22,704	Other liabilities	$	23,140
Loan commitments	2,824		Mortgages held for sale	107		N/A	—
Forward contracts - mortgage loan	3,500		N/A	—		Mortgages held for sale	16
Total - December 31, 2023	$	1,091,942		$	22,811		$	23,156

Interest rate swap contracts	$	881,600	Other assets	$	24,838	Other liabilities	$	25,307
Loan commitments	2,638		Mortgages held for sale	67		N/A	—
Forward contracts - mortgage loan	3,750		Mortgages held for sale	24		N/A	—
Total - December 31, 2022	$	887,988		$	24,929		$	25,307

The following table shows the amounts included on the Consolidated Statements of Income for non-hedging derivative financial instruments at December 31, 2023, 2022 and 2021.


		Gain (loss)
(Dollars in thousands)	Statement of Income classification	2023		2022		2021
Interest rate swap contracts	Other expense	$	33	$	(32)	$	591
Interest rate swap contracts	Other income	1,310		83		410
Loan commitments	Mortgage banking	40		(385)		(1,035)
Forward contracts - mortgage loan	Mortgage banking	(40)		35		279
Total		$	1,343	$	(299)	$	245

The following table shows the offsetting of financial assets and derivative assets at December 31, 2023 and 2022.


							Gross Amounts Not Offset in the Statement of Financial Condition
(Dollars in thousands)	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Assets Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Received		Net Amount
December 31, 2023
Interest rate swaps	$	22,704	$	—	$	22,704	$	—	$	10,795	$	11,909

December 31, 2022
Interest rate swaps	$	24,838	$	—	$	24,838	$	—	$	25,295	$	(457)

The following table shows the offsetting of financial liabilities and derivative liabilities at December 31, 2023 and 2022.


							Gross Amounts Not Offset in the Statement of Financial Condition
(Dollars in thousands)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statement of Financial Condition		Net Amounts of Liabilities Presented in the Statement of Financial Condition		Financial Instruments		Cash Collateral Pledged		Net Amount
December 31, 2023
Interest rate swaps	$	23,140	$	—	$	23,140	$	—	$	—	$	23,140
Repurchase agreements	55,809		—		55,809		55,809		—		—
Total	$	78,949	$	—	$	78,949	$	55,809	$	—	$	23,140

December 31, 2022
Interest rate swaps	$	25,307	$	—	$	25,307	$	—	$	—	$	25,307
Repurchase agreements	141,432		—		141,432		141,432		—		—
Total	$	166,739	$	—	$	166,739	$	141,432	$	—	$	25,307

If a default in performance of any obligation of a repurchase or derivative agreement occurs, each party will set-off property held, or loan indebtedness owing, in respect of transactions against obligations owing in respect of any other transactions. At December 31, 2023 and December 31, 2022, repurchase agreements had a remaining contractual maturity of $54.46 million and $138.08 million in overnight and $1.35 million and $3.35 million in up to 30 days, respectively and were collateralized by U.S. Treasury and Federal agencies securities.