Derivative Instruments

9 Months Ended

Sep. 30, 2022

Derivative Instruments

Derivative Instruments

NOTE 18 Derivative Instruments

The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with U.S. financial institutions in order to minimize risk to the Company. These swaps are derivatives but are not designated as hedging instruments.

The Company did not have any derivatives designated as hedging instruments as of September 30, 2022 and December 31, 2021. The following table presents the amounts recorded in the Company’s consolidated balance sheets, for derivatives not designated as hedging instruments, as of September 30, 2022 and December 31, 2021:

		September 30, 2022				December 31, 2021
		Fair		Notional		Fair		Notional
(dollars in thousands)		Value		Amount		Value		Amount
Asset Derivatives	Consolidated Balance Sheet Location
Interest rate swaps	Other assets	$	6,608	$	43,784	$	1,366	$	44,826
Interest rate lock commitments	Other assets		—		—		1,507		52,316
Forward loan sales commitments	Other assets		10		333		490		13,418
TBA mortgage backed securities	Other assets		1,352		53,000		34		97,000
Total asset derivatives		$	7,970	$	97,117	$	3,397	$	207,560
Liability Derivatives
Interest rate swaps	Accrued expenses and other liabilities	$	6,608	$	43,784	$	1,368	$	44,826
Interest rate lock commitments	Accrued expenses and other liabilities		134		22,636		—		—
Total liability derivatives		$	6,742	$	66,420	$	1,368	$	44,826

The gain (loss) recognized on derivative instruments for the three and nine months ended September 30, 2022 and 2021 was as follows:

		Three months ended				Nine months ended
	Consolidated Statements	September 30,		September 30,		September 30,		September 30,
(dollars in thousands)	of Income Location	2022		2021		2022		2021
Interest rate swaps	Other noninterest income	$	1	$	1	$	2	$	2
Interest rate lock commitments	Mortgage banking		(1,724)		(1,793)		(1,871)		(7,298)
Forward loan sales commitments	Mortgage banking		(532)		(499)		(480)		(2,061)
TBA mortgage backed securities	Mortgage banking		1,317		(690)		5,066		4,865
Total gain/(loss) from derivative instruments		$	(938)	$	(2,981)	$	2,717	$	(4,492)

The Company has third party agreements that require a minimum dollar transfer amount upon a margin call. This requirement is dependent on certain specified credit measures. The amount of collateral posted with third parties was zero at September 30, 2022 and $15 thousand at December 31, 2021. The amount of collateral posted with third parties was deemed to be sufficient as of those dates to collateralize both the fair market value change as well as any additional amounts that may be required as a result of a change in the specified credit measures.