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Derivative Instruments | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments (In Thousands) The Company uses certain derivative instruments to meet the needs of customers as well as to manage the interest rate risk associated with certain transactions. Non-hedge derivatives The Company enters into derivative instruments that are not designated as hedging instruments to help its commercial customers manage their exposure to interest rate fluctuations. To mitigate the interest rate risk associated with these customer contracts, the Company enters into an offsetting derivative contract position. The Company manages its credit risk, or potential risk of default by its commercial customers, through credit limit approval and monitoring procedures. The Company enters into interest rate lock commitments with its customers to mitigate the interest rate risk associated with the commitments to fund fixed-rate residential mortgage loans. The Company also enters into forward commitments to sell residential mortgage loans to secondary market investors. The following table provides a summary of the Company’s derivatives not designated as hedging instruments as of the dates presented:
| Balance Sheet |  | December 31, 2024 |  | December 31, 2023
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative assets: |  |  |  |  |  |  |  |  |
Interest rate contracts | Other Assets |  | $ | 877,051 |  |  | $ | 14,071 |  |  | $ | 532,279 |  |  | $ | 13,567 |
Interest rate lock commitments | Other Assets |  | 64,365 |  |  | 861 |  |  | 61,957 |  |  | 1,483 |
Forward commitments | Other Assets |  | 174,000 |  |  | 1,242 |  |  | 20,000 |  |  | 43 |
Totals |  |  | $ | 1,115,416 |  |  | $ | 16,174 |  |  | $ | 614,236 |  |  | $ | 15,093 |
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate contracts | Other Liabilities |  | $ | 880,371 |  |  | $ | 14,094 |  |  | $ | 535,725 |  |  | $ | 13,567 |
Interest rate lock commitments | Other Liabilities |  | 1,829 |  |  | 122 |  |  | 2,292 |  |  | — |
Forward commitments | Other Liabilities |  | 52,000 |  |  | 86 |  |  | 165,000 |  |  | 2,605 |
Totals |  |  | $ | 934,200 |  |  | $ | 14,302 |  |  | $ | 703,017 |  |  | $ | 16,172 |
Gains (losses) included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows, as of the dates presented:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Interest rate contracts: |  |  |  |  |
Included in interest income on loans | $ | 14,128 |  |  | $ | 8,156 |  |  | $ | 2,470 |
Interest rate lock commitments: |  |  |  |  |
Included in mortgage banking income | (713) |  |  | 319 |  |  | (4,128) |
Forward commitments |  |  |  |  |
Included in mortgage banking income | 3,718 |  |  | (1,848) |  |  | (645) |
Total | $ | 17,133 |  |  | $ | 6,627 |  |  | $ | (2,303) |
Derivatives designated as cash flow hedges Cash flow hedge relationships mitigate exposure to the variability of future cash flow or other forecasted transactions. The Company uses interest rate swap contracts in an effort to manage future interest rate exposure on borrowings. The swap hedging strategy converts the SOFR-based variable interest rate on the forecasted borrowings to a fixed interest rate. The collar hedging strategy stabilizes interest rate fluctuation by setting both a floor and a cap. The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates presented:
| Balance Sheet |  | December 31, 2024 |  | December 31, 2023
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative assets: |  |  |  |  |  |  |  |  |
Interest rate swaps | Other Assets |  | $ | 130,000 |  |  | $ | 22,780 |  |  | $ | 130,000 |  |  | $ | 21,486 |
Interest rate collars | Other Assets |  | — |  |  | — |  |  | 200,000 |  |  | 572 |
Totals |  |  | $ | 130,000 |  |  | $ | 22,780 |  |  | $ | 330,000 |  |  | $ | 22,058 |
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate swaps | Other Liabilities |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Interest rate collars | Other Liabilities |  | 450,000 |  |  | 598 |  |  | 250,000 |  |  | 384 |
Totals |  |  | $ | 450,000 |  |  | $ | 598 |  |  | $ | 250,000 |  |  | $ | 384 |
The impact on other comprehensive income for the years ended December 31, 2024, 2023, and 2022, is described in Note 16, “Other Comprehensive Income (Loss).” In October 2021, the Company terminated four interest rate swap contracts with notional amounts of $25,000 each. These swaps hedged forecasted future FHLB borrowings which were no longer expected to occur. As a result of the termination the Company recognized a gain of $4,676 for the year ended December 31, 2022. There have been no such terminations since October 2021. Derivatives designated as fair value hedges Fair value hedges protect against changes in the fair value of an asset, liability or firm commitment. The Company enters into interest rate swap agreements to manage interest rate exposure on certain of the Company’s fixed-to-floating rate subordinated notes. The agreements convert the currently-fixed interest rates to SOFR-based variable interest rates. The following table provides a summary of the Company’s derivatives designated as fair value hedges as of the dates presented:
| Balance Sheet |  | December 31, 2024 |  | December 31, 2023
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate swaps | Other Liabilities |  | $ | 100,000 |  |  | $ | 17,368 |  |  | $ | 100,000 |  |  | $ | 17,052 |
The following table presents the effects of the Company’s fair value hedge relationships on the Consolidated Statements of Income for the periods presented:
|  |  | Amount of Gain (Loss) Recognized in Income
| Income Statement | Year ended December 31,
| Location | 2024 |  | 2023 |  | 2022
Derivative liabilities: |  |  |  |  |  |  |
Interest rate swaps - subordinated notes | Interest Expense |  | $ | (317) |  |  | $ | 2,737 |  |  | $ | (14,378) |
Derivative liabilities - hedged items: |  |  |  |  |  |  |
Interest rate swaps - subordinated notes | Interest Expense |  | $ | 317 |  |  | $ | (2,737) |  |  | $ | 14,378 |
The following table presents the amounts that were recorded in the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges as of the dates presented:
|  | Carrying Amount of the Hedged Liability |  | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Liability
Balance Sheet Location | December 31, 2024 |  | December 31, 2023 |  | December 31, 2024 |  | December 31, 2023
Long-term debt |  | $ | 81,648 |  |  | $ | 81,791 |  |  | $ | 17,369 |  |  | $ | 17,052 |
Offsetting Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of setoff” exists or when the instruments are subject to an enforceable master netting agreement, which includes the right of the non-defaulting party or non-affected party to offset recognized amounts, including collateral posted with the counterparty, to determine a net receivable or net payable upon early termination of the agreement. Certain of the Company’s derivative instruments are subject to master netting agreements; however, the Company has not elected to offset such financial instruments in the Consolidated Balance Sheets. The following table presents the Company’s gross derivative positions as recognized in the Consolidated Balance Sheets as well as the net derivative positions, including collateral pledged to the extent the application of such collateral did not reduce the net derivative liability position below zero, had the Company elected to offset those instruments subject to an enforceable master netting agreement as of the dates presented:
| Offsetting Derivative Assets |  | Offsetting Derivative Liabilities
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2024 |  | December 31, 2023
Gross amounts recognized | $ | 34,505 |  |  | $ | 29,284 |  |  | $ | 28,550 |  |  | $ | 26,425 |
Gross amounts offset in the consolidated balance sheets | — |  |  | — |  |  | — |  |  | — |
Net amounts presented in the consolidated balance sheets | 34,505 |  |  | 29,284 |  |  | 28,550 |  |  | 26,425 |
Gross amounts not offset in the consolidated balance sheets |  |  |  |  |  |  |
Financial instruments | 27,939 |  |  | 23,863 |  |  | 27,939 |  |  | 23,863 |
Financial collateral pledged | — |  |  | — |  |  | 611 |  |  | 1,074 |
Net amounts | $ | 6,566 |  |  | $ | 5,421 |  |  | $ | — |  |  | $ | 1,488 |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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