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INTEREST RATE SWAPS

9 Months Ended

Sep. 30, 2024

INTEREST RATE SWAPS

INTEREST RATE SWAPS

NOTE 16. INTEREST RATE SWAPS

The Company has entered into interest rate swap agreements to hedge against changes in future cash flows resulting from fluctuating interest rates related to the below noted borrowings. The interest rate agreements were 100% effective during the three and nine months ended September 30, 2024 and 2023. Accordingly, the changes in fair value on the interest rate swaps have been classified in accumulated other comprehensive income. The fair value of the interest rate swap agreements are included in other assets and accrued and other liabilities, respectively, on the consolidated balance sheets. Information related to the Company’s interest rate swap agreements as of September 30, 2024 is presented below (in thousands):


Hedged Item ⁽¹⁾		Effective Date		Maturity Date		Rate		Amount			Fair Value as of September 30, 2024
2026 Term Loan		3/29/2024		3/10/2026		1.44% + 0.10% + applicable spread		$	50,000		$	1,495
2026 Term Loan		8/31/2021		3/10/2026		0.70% + 0.10% + applicable spread		$	15,000		$	605
2026 Term Loan⁽²⁾		3/10/2026		3/10/2031		3.80% + 0.10% + applicable spread		$	40,000		$	(1,198)
2027 Term Loan		3/29/2024		1/31/2027		1.35% + 0.10% + applicable spread		$	100,000		$	4,499
2027 Term Loan⁽²⁾		1/31/2027		1/30/2032		3.75% + 0.10% + applicable spread		$	60,000		$	(1,515)
2028 Term Loan		9/30/2022		1/31/2028		3.78% + 0.10% + applicable spread		$	50,000		$	(836)
2028 Term Loan		9/30/2022		1/31/2028		3.78% + 0.10% + applicable spread		$	50,000		$	(843)
2028 Term Loan ⁽²⁾		1/31/2028		1/31/2033		3.81% + 0.10% + applicable spread		$	60,000		$	(1,356)
2029 Term Loan⁽³⁾		1/31/2023		1/31/2030		3.27% + 0.10% + applicable spread		$	50,000		$	(140)
2029 Term Loan⁽³⁾		1/31/2023		1/31/2030		3.26% + 0.10% + applicable spread		$	33,000		$	(79)
2029 Term Loan⁽³⁾		1/31/2023		1/31/2030		3.36% + 0.10% + applicable spread		$	17,000		$	(118)
Credit Facility		2/1/2024		1/31/2028		3.85% + 0.10% + applicable spread		$	50,000		$	(919)

⁽¹⁾	On September 30, 2022, the Company converted its existing interest rate swaps from 1-month LIBOR to SOFR.

⁽²⁾	The Company entered into forward swaps to further fix interest rates through periods that the Company reasonably expects to extend its current term loans.

⁽³⁾	Prior to September 30, 2024, these interest rate swaps were assigned to the Credit Facility. Effective September 30, 2024, these hedges were redesignated to the 2029 Term Loan.

The use of interest rate swap agreements carries risks, including the risk that the counterparties to these agreements are not able to perform. To mitigate this risk, the Company enters into interest rate swap agreements with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not currently anticipate that any of the counterparties to the Company’s interest rate swap agreements will fail to meet their obligations. As of September 30, 2024, there were no events of default related to the Company’s interest rate swap agreements.