Balance Sheet Offsetting

3 Months Ended

Mar. 31, 2020

Derivative financial instruments may be eligible for offset in the consolidated balance sheets, 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, derivative contracts with customers may not be subject to enforceable master netting arrangements. The Company elected to account for centrally-cleared derivative contracts on a gross basis. 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 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.

Financial instruments that are eligible for offset in the consolidated statements of financial condition as of March 31, 2020 are presented in the table below:



							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments ⁽¹⁾			Cash Collateral ⁽²⁾			Net Amount
	(Dollars in thousands)
March 31, 2020
Financial assets:
Derivatives not designated as hedging instruments	$	10,961	$	—	$	10,961	$	—		$	—		$	10,961
Total	$	10,961	$	—	$	10,961	$	—		$	—		$	10,961

Financial liabilities:
Derivatives not designated as hedging instruments	$	11,013	$	—	$	11,013	$	(2,766	)	$	(2,600	)	$	5,647
Total	$	11,013	$	—	$	11,013	$	(2,766	)	$	(2,600	)	$	5,647

⁽¹⁾ Represents the fair value of securities pledged with counterparty bank.
⁽²⁾ Represents cash collateral pledged with counterparty bank.

Financial instruments that are eligible for offset in the consolidated statements of financial condition as of December 31, 2019 are presented in the table below:



								Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts Recognized		Gross Amounts Offset in the Consolidated Balance Sheets			Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral ⁽¹⁾			Net Amount
	(Dollars in thousands)
December 31, 2019
Financial assets:
Derivatives not designated as hedging instruments	$	2,103	$	—		$	2,103	$	—	$	—		$	2,103
Total	$	2,103	$	—		$	2,103	$	—	$	—		$	2,103

Financial liabilities:
Derivatives not designated as hedging instruments	$	2,107	$	(4	)	$	2,103	$	—	$	(1,678	)	$	425
Total	$	2,107	$	(4	)	$	2,103	$	—	$	(1,678	)	$	425

⁽¹⁾Represents cash collateral held with counterparty bank.