Company: WBS-PG
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0000801337-25-000104
Chunk: 209

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-11-10
Form: 10-Q
Item: Part I, Item 2
Chunk 209
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 December 31, 2023, was recognized in interest expense in January 2024 upon the acquisition of Ametros.(2)Additional information regarding the amounts recognized in net income related to cash flow hedge activities can be found within Note 9: Accumulated Other Comprehensive (Loss), Net of Tax.The following table summarizes the income statement effect of derivatives not designated in hedge relationships:Recognized inThree months ended September 30,Nine months ended September 30,(In thousands)Non-interest Income2025202420252024Interest rate derivativesOther income$4,695 $(5,373)$2,767 $(5,817)Mortgage banking derivativesOther income3 5 2 (25)OtherOther income442 (1,655)(4,565)281 Total not designated as hedging instruments$5,140 $(7,023)$(1,796)$(5,561)

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Derivative Exposure. At September 30, 2025, the Company had $94.9 million of cash collateral received and $11.6 million of cash collateral posted included in Cash and due from banks on the accompanying Condensed Consolidated Balance Sheets. In addition, the Company had $3.6 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 $81.9 million at September 30, 2025. 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 $121.1 million at September 30, 2025. The Company has incorporated a credit valuation adjustment (contra-liability) to reflect non-performance risk in the fair value measurement of its derivatives, which totaled $3.8 million and $7.6 million at September 30, 2025, and December 31, 2024, respectively. Various factors impact changes in the valuation adjustment over time, such as changes in the credit spreads of the contracted parties, and changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments.Additional information regarding the Company’s accounting policies for derivatives