Company: WBS-PG
Filing Date: 2025-03-03
Form Type: 10-K
Source: 0000801337-25-000004
Chunk: 101

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-03-03
Form: 10-K
Item: Item 8
Chunk 101
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 purchased options designated as cash flow hedges. During the years ended December 31, 2024, 2023, and 2022, $0.5 million, $2.3 million, and $3.6 million of time-value premiums, respectively, for which a straight-line amortization approach was applied, were recognized in interest income. There were no remaining unamortized time-value premiums at December 31, 2024. Over the next twelve months, an estimated $5.2 million related to cash flow hedge gain or loss will be reclassified from AOCL, decreasing interest income as hedge interest payments are made. Additional information regarding cash flow hedge activity impacting AOCL and the related amounts reclassified to net income can be found within Note 13: Accumulated Other Comprehensive (Loss), Net of Tax. The maximum length of time over which forecasted transactions are hedged is 2.2 years.The following table summarizes the income statement effect of derivatives not designated as hedging instruments:Recognized InYears ended December 31,(In thousands)Non-interest Income202420232022Interest rate derivativesOther income$(1,480)$(6,159)$25,092 Mortgage banking derivativesMortgage banking activities(34)5 (48)OtherOther income4,246 (2,476)3,249 Total not designated as hedging instruments$2,732 $(8,630)$28,293 

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Derivative Exposure. At December 31, 2024, the Company had $256.2 million of cash collateral received and $0.1 million of cash collateral posted included in Cash and due from banks on the accompanying Consolidated Balance Sheets. In addition, the Company had  $1.7 million in initial margin posted at clearing houses. The Company regularly evaluates the credit risk of its derivative customers, taking into account the likelihood of default, net exposures, and remaining contractual life, among other related factors. Credit risk exposure is mitigated as transactions with customers are generally secured by the same collateral of the underlying transactions. Current net credit exposure relating to derivatives with the Bank’s customers was $19.0 million at December 31, 2024. In addition, the Company monitors potential future exposure, representing its best estimate of exposure to remaining contractual maturity. The potential future exposure relating to derivatives with the Bank’s customers totaled $109.2 million at December 31, 2024. The Company has incorporated a credit valuation adjustment (