Company: UVSP
Filing Date: 2025-10-24
Form Type: 10-Q
Source: 0000102212-25-000028
Chunk: 45

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-10-24
Form: 10-Q
Item: Item 1
Chunk 45
---
 — 88 11,004 Reclassification adjustment recorded in earnings (1)— 1,352 — 1,352 Balance, September 30, 2025$(24,201)$(1,070)$(6,365)$(31,636)Balance, December 31, 2023$(34,321)$(4,566)$(11,759)$(50,646)Other comprehensive income6,986 1,397 348 8,731 Reclassification adjustment recorded in earnings (1)— 292 — 292 Balance, September 30, 2024$(27,335)$(2,877)$(11,411)$(41,623)(1) Represents reclassification to earnings as a reduction to interest income of amounts included in accumulated other comprehensive income on the condensed consolidated balance sheet related to the interest rate swap terminated on August 2, 2024.

Note 11. Derivative Instruments and Hedging Activities 

Interest Rate SwapsThe Corporation periodically uses interest rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation’s credit exposure on interest rate swaps includes changes in fair value and any collateral that is held by a third party.In May 2022, the Corporation entered into an interest rate swap classified as a cash flow hedge with a notional amount of $250.0 million to hedge the interest payments received on a pool of variable rate loans. Under the terms of the swap agreement, the Corporation paid a variable rate equal to the Prime Rate and received a fixed rate of 5.99% with a maturity date of May 4, 2026. On August 2, 2024, the Corporation terminated the swap. In connection with the termination, the Corporation incurred an unwind fee of $4.0 million, of which $2.7 million has been reclassified to earnings as a reduction to interest income since termination. Additionally, unamortized origination and third-party fees totaled $87 thousand at September 30, 2025. The $1.4 million will be amortized into interest income over the remaining seven months of the original swap.Credit Derivatives The Corporation has agreements with third-party financial institutions whereby the third-party financial institution enters into interest rate derivative contracts with loan customers referred to them by the Corporation. By the terms of the agreements, the third-party financial institution has recourse to