Company: UVSP
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000102212-25-000019
Chunk: 38

Company: UNIVEST FINANCIAL Corp
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 1
Chunk 38
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 $4.0 million, of which $1.5 million has been reclassified to earnings as a reduction to interest income since termination. Additionally, unamortized origination and third party fees totaled $161 thousand at March 31, 2025. The $2.7 million will be amortized into interest income over the remaining 13 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 the Corporation for any exposure created under each swap contract in the event the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. These transactions represent credit derivatives and are a customary arrangement that allows the Corporation to provide access to interest rate swap transactions for customers without issuing the swap. At March 31, 2025, the Corporation had exposure to 135 variable-rate to fixed-rate interest rate swap transactions between the third-party financial institution and customers with a current notional amount of $854.8 million and remaining maturities ranging from 2 months to 10 years. At March 31, 2025, the fair value of the Corporation's interest rate swap credit derivatives was a liability of $79 thousand. At March 31, 2025, the fair value of the swaps to the customers was a net gain of $42.1 million. At March 31, 2025, the Corporation's credit exposure related to customers totaled $2.3 million.The maximum potential payments by the Corporation to the third-party financial institution under these credit derivatives are not estimable as they are contingent on future interest rates and the agreements do not provide for a limitation of the maximum potential payment amount.

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Mortgage Banking DerivativesDerivative loan commitments represent agreements for delayed delivery of financial instruments in which the buyer agrees to purchase, and the seller agrees to deliver, at a specified future date, a specified instrument at a specified price or yield. The Corporation’s derivative loan commitments are commitments to sell loans secured by 1- to 4-family residential properties whose predominant risk characteristic is interest rate risk.Derivatives TablesThe Corporation had no derivatives designated as hedging instruments recorded on the condensed consolidated balance sheets at March 31, 2025 or December 31, 2024. The following table presents the notional amounts and fair values of derivatives