The Company is exposed to certain risks arising from both economic conditions and its business operations. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. The Company manages a matched book with respect to its derivative instruments in order to minimize its net risk exposure resulting from such transactions. The Company does not use derivative financial instruments for proprietary or speculative trading.


		Fair Values of Derivative Instruments

(Dollars in thousands)	Count	Notional		Balance Sheet Location	Derivatives (Fair Value)
Derivatives designated as hedging instruments:
Interest rate products	18	$	1,500,000	Other assets	$	14,265
Total		$	1,500,000		$	14,265
Derivatives not designated as hedging instruments:
Interest rate products		$	2,942,675	Other assets	$	153,980
Interest rate products		2,942,675		Other liabilities	(153,980)
Interest rate lock commitments with clients		41,238		Other assets	612
Interest rate lock commitments with clients		3,658		Other liabilities	(18)
Forward sale commitments		28,927		Other assets	200
Forward sale commitments		27,071		Other liabilities	(39)
FX forwards		26,716		Other assets	1,407
FX forwards		25,924		Other liabilities	(1,205)
Risk participation agreements sold		110,948		Other liabilities	(90)
Risk participation agreements purchased		97,201		Other assets	25
Financial derivative related to sales of certain Visa Class B shares		55,358		Other liabilities	(5,180)
Total derivatives		$	7,802,391		$	9,977


		Fair Values of Derivative Instruments

(Dollars in thousands)	Count	Notional		Balance Sheet Location	Derivatives (Fair Value)
Derivatives designated as hedging instruments:
Interest rate products	9	$	750,000	Other assets	$	15,578
Total		$	750,000		$	15,578
Derivatives not designated as hedging instruments:
Interest rate products		$	2,428,306	Other assets	$	136,924
Interest rate products		2,383,443		Other liabilities	(136,924)
Interest rate lock commitments with clients		34,651		Other assets	637

Forward sale commitments		1,000		Other assets	1
Forward sale commitments		37,348		Other liabilities	(283)
FX forwards		15,812		Other assets	429
FX forwards		13,064		Other liabilities	(409)
Risk participation agreements sold		103,648		Other liabilities	(3)
Risk participation agreements purchased		116,804		Other assets	78
Financial derivative related to sales of certain Visa Class B shares		113,177		Other liabilities	(14,023)
Total derivatives		$	5,997,253		$	2,005


	Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion)						Location of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)
(Dollars in thousands)	Year Ended December 31,
Derivatives in Cash Flow Hedging Relationships	2024		2023		2022
Interest Rate Products	$	(8,894)	$	1,596	$	—	Interest income
Total	$	(8,894)	$	1,596	$	—

	Amount of Gain (Loss) Recognized in Income						Location of Gain (Loss) Recognized in Income
(Dollars in thousands)	Year Ended December 31,
Derivatives Not Designated as a Hedging Instrument	2024		2023		2022
Interest rate products	$	9,412	$	10,294	$	7,576	Other income
Interest rate lock commitments with clients	(34)		274		(2,072)		Mortgage banking activities, net
Forward sale commitments	175		65		4,863		Mortgage banking activities, net
FX forwards	524		130		80		Other income
Risk participation agreements	(63)		(5)		(195)		Other income
Total	$	10,014	$	10,758	$	10,252

The Company's objectives in using interest rate derivatives are to add stability to interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate options, including floors, caps, collars, or swaps as part of its interest rate risk management strategy. Interest rate options designated as cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.

The Company has agreements with certain derivative counterparties that contain a provision under which, if it defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. The Company also has agreements with certain derivative counterparties that contain a provision where if it fails to maintain its status as a well-capitalized or adequately capitalized institution, then the counterparty could terminate the derivative positions and the Company would be required to settle its obligations under the agreements.

As of December 31, 2024, the Company had 18 interest rate floors purchased at an aggregate premium of $29.7 million with an aggregate notional amount of $1.5 billion to hedge variable cash flows associated with a variable rate loan pool through the third quarter of 2027. Changes to the fair value of derivatives designated and that qualify as cash flow hedges are recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecast transaction affects earnings. If the Company determines that a cash flow hedge is no longer highly effective, future changes in the fair value of the hedging instrument would be reported in earnings. As of December 31, 2024, the Company determined the cash flow hedges remain highly effective. During the year ended December 31, 2024, $4.6 million of amortization expense on the premium was reclassified into interest income compared to $1.2 million during the year ended December 31, 2023. The Company does not expect any unrealized gains or losses related to cash flow hedges to be reclassified into earnings in the next twelve months.

The Company enters into interest rate swaps with commercial loan clients wishing to manage interest rate risk. The Company then enters into corresponding swap agreements with swap dealer counterparties to economically hedge the exposure arising from these contracts. The interest rate swaps with both the clients and third parties are not designated as hedges under ASC 815, Derivatives and Hedging (ASC 815) and are marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of December 31, 2024, there were no fair value adjustments related to credit quality.

Derivative financial instruments related to mortgage banking activities are recorded at fair value and are not designated as accounting hedges. This includes commitments to originate certain fixed-rate residential loans to clients, also referred to as interest rate lock commitments. The Company may also enter into forward sale commitments to sell loans to investors at a fixed price at a future date and trade asset-backed securities to mitigate interest rate risk.

The Company enters into foreign exchange forward contracts (FX forwards) with clients to exchange one currency for another on an agreed date in the future at an agreed exchange rate. The Company then enters into corresponding FX forwards with swap dealer counterparties to economically hedge its exposure on the exchange rate component of the client agreements. The FX forwards with both the clients and third parties are not designated as hedges under ASC 815 and are marked to market through earnings. Exposure to gains and losses on these contracts increase or decrease over their respective lives as currency exchange and interest rates fluctuate. As the FX forwards are structured to offset each other, changes to the underlying term structure of currency exchange rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by ASC 820. As of December 31, 2024, there were no fair value adjustments related to credit quality.

The Company may enter into a risk participation agreement (RPA) with another institution as a means to assume a portion of the credit risk associated with a loan structure which includes a derivative instrument, in exchange for fee income

commensurate with the risk assumed. This type of derivative is referred to as an “RPA sold.” In addition, in an effort to reduce the credit risk associated with an interest rate swap agreement with a borrower for whom the Company has provided a loan structured with a derivative, the Company may purchase an RPA from an institution participating in the facility in exchange for a fee commensurate with the risk shared. This type of derivative is referred to as an “RPA purchased.”

The Company entered into an agreement with one unrelated financial institution whereby that financial institution entered into interest rate derivative contracts (interest rate swap transactions) directly with clients referred to them by the Company. Under the terms of the agreements, those financial institutions have recourse to us for any exposure created under each swap transaction, only in the event that the client defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. This is a customary arrangement that allows us to provide access to interest rate swap transactions for our Clients without creating the swap ourselves. These swap guarantees are accounted for as credit derivatives.

At December 31, 2024 and December 31, 2023, there were 154 and 188 variable-rate to fixed-rate swap transactions between the third-party financial institutions and the Company's Clients, respectively. The initial notional aggregate amount was approximately $0.6 billion and $0.7 billion at December 31, 2024 and December 31, 2023, respectively. At December 31, 2024, the swap transactions remaining maturities ranged from under 1 year to 11 years. At December 31, 2024, none of these client swaps were in a paying position to third parties, with our swap guarantees having a fair value of $5.5 million. At December 31, 2023, none of these client swaps were in a paying position to third parties, with the Company's swap guarantees having a fair value of $7.3 million. For both periods, none of the Company's Clients were in default of the swap agreements.

The Company has minimum collateral posting thresholds with certain of its derivative counterparties, and has posted collateral of $1.7 million in cash against its obligations under these agreements which meets or exceeds the minimum collateral posting requirements. If the Company had breached any of these provisions at December 31, 2024, it could have been required to settle its obligations under the agreements at the termination value.