DERIVATIVES AND HEDGING |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVES AND HEDGING | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVES AND HEDGING | NOTE 6 – DERIVATIVES AND HEDGING The table below summarizes the gross notional amount and fair value of outstanding derivative instruments at June 30, 2025 and December 31, 2024.
Note 1: The Company’s investment in interest rate derivative instruments consists of three and five year investments in 3% interest rate floors to hedge interest income on a $1,900,000 notional investment of customer funds in floating rate cash equivalent instruments. The short-term portion of the investments’ fair value shown in the tables above relates to the portion of the hedge expiring within one year of the balance sheet date. During the three months ended June 30, 2025 and 2024, the Company recognized $6,445 and $982, respectively, and during the six months ended June 30, 2025 and 2024, the Company recognized $9,730 and $773, respectively, in unrealized gains, net of tax, on derivative instruments designated as cash flow hedges in OCI, respectively. As of June 30, 2025, the Company estimated that $559 of unrealized gains related to cash flow hedges currently included in AOCI are expected to be reclassified into earnings within the next 12 months. As of June 30, 2025, the maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 52 months. During the three and six months ended June 30, 2025 and 2024, the Company did not discontinue any cash flow hedges because it was probable that the original forecasted transaction would not occur and as such, did not reclassify any gains or losses to earnings prior to the occurrence of the hedged transaction. As of June 30, 2025 and December 31, 2024, the Company recognized an obligation to return cash collateral related to interest rate floors of $25,420 and $18,790, respectively, which was offset against the gross derivative balances shown in the table above. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||