v3.25.3
Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The notional amounts and estimated fair values of derivative positions outstanding are presented in the following table.
 September 30, 2025December 31, 2024
Estimated Fair ValueEstimated Fair Value
(in thousands)Notional
Amount		Asset DerivativeLiability DerivativeNotional
Amount		Asset DerivativeLiability Derivative
Derivatives designated as hedges
Cash flow hedges:
Interest rate contracts:
Swaps hedging loans$1,200,000 $3,778 $1,528 $2,600,000 $254 $23,265 
Non-hedging derivatives
Customer-initiated and other derivatives:
Foreign currency forward contracts355,200 1,894 1,631 485,948 5,462 5,299 
Interest rate contracts:
Swaps6,502,321 37,382 37,382 6,273,301 45,771 45,771 
Caps and floors written2,055,925 4,028 1,417 970,451 1,066 2,529 
Caps and floors purchased2,055,925 1,417 4,028 970,451 2,529 1,066 
Forward contracts22,708,747 30,815 30,385 20,237,917 41,896 41,035 
Gross derivatives79,314 76,371 96,978 118,965 
Netting adjustment - offsetting derivative assets/liabilities(32,350)(32,350)(44,097)(44,097)
Netting adjustment - cash collateral received/posted(9,667)(19,757)(29,679)(16,962)
Net derivatives included on the consolidated balance sheets$37,297 $24,264 $23,202 $57,906 
The Company’s credit exposure on derivative instruments is limited to the net favorable value and interest payments by each counterparty. In some cases, collateral may be required from the counterparties involved if the net value of the derivative instruments exceeds a nominal amount. The Company’s credit exposure associated with these instruments, net of any collateral pledged, was approximately $37.3 million at September 30, 2025 and approximately $23.2 million at December 31, 2024. Collateral levels are monitored and adjusted on a regular basis for changes in the value of derivative instruments. At September 30, 2025, the Company had $30.0 million in cash collateral pledged to counterparties included in interest bearing cash and cash equivalents on the consolidated balance sheet and $10.6 million in cash collateral received from counterparties included in interest bearing deposits on the consolidated balance sheet. The comparative amounts at December 31, 2024, were $71.3 million in cash collateral pledged to counterparties and $31.0 million cash collateral received from counterparties.
The Company also enters into credit risk participation agreements with financial institution counterparties for interest rate swaps related to loans in which the Company is either a participant or a lead bank. The risk participation agreements entered into by the Company as a participant bank provide credit protection to the financial institution counterparty should the borrower fail to perform on its interest rate derivative contract with that financial institution. The Company is party to 19 risk participation agreements where it acts as a participant bank with a notional amount of $228.9 million at September 30, 2025, compared to 17 risk participation agreements with a notional amount of $228.6 million at December 31, 2024. The maximum estimated exposure to these agreements, assuming 100% default by all obligors, was approximately $627,000 at September 30, 2025 and $4.1 million at December 31, 2024. The fair value of these exposures was insignificant to the consolidated financial statements at both September 30, 2025 and December 31, 2024. Risk participation agreements entered into by the Company as the lead bank provide credit protection should the borrower fail to perform on its interest rate derivative contract. The Company is party to 46 risk participation agreements where the Company acts as the lead bank having a notional amount of $587.9 million at September 30, 2025, compared to 25 agreements having a notional amount of $349.5 million at December 31, 2024.
Derivatives Designated as Cash Flow Hedges
The Company enters into interest rate derivative contracts that are designated as qualifying cash flow hedges to hedge the exposure to variability in expected future cash flows attributable to changes in a contractually specified interest rate.
During the nine months ended September 30, 2025, the Company recorded $943,000 in unrealized gains to adjust its cash flow hedges to fair value, which was recorded net of tax to AOCI, and reclassified $21.6 million from AOCI as a decrease to interest income on loans. Based on current market conditions, the Company estimates that during the next 12 months, an additional $25,000 will be reclassified from AOCI as an increase to interest income. As of September 30, 2025, the maximum length of time over which forecasted transactions are hedged is 2.09 years.