Company: WBS-PG
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0000801337-25-000083
Chunk: 59

Company: WEBSTER FINANCIAL CORP
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 59
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 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 June 30,Six months ended June 30,(In thousands)Non-interest Income2025202420252024Interest rate derivativesOther income$896 $(1,734)$(1,928)$(444)Mortgage banking derivativesOther income(14)(8)(1)(30)OtherOther income(4,020)659 (5,007)1,936 Total not designated as hedging instruments$(3,138)$(1,083)$(6,936)$1,462 

71

Derivative Exposure. At June 30, 2025, the Company had $121.6 million of cash collateral received and $16.4 million of cash collateral posted included in Cash and due from banks on the accompanying Condensed Consolidated Balance Sheets. In addition, the Company had $2.2 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 $73.0 million at June 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 $105.3 million at June 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 $4.3 million and $7.6 million at June 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 can be found within Note 1: Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements contained in Part II - Item 8