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Derivative Instruments | 9 Months Ended
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Sep. 30, 2025
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 (which are included within the “interest rate contracts” line items in the tables below). 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 and adjustable-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 |  | September 30, 2025 |  | December 31, 2024
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative assets: |  |  |  |  |  |  |  |  |
Interest rate contracts | Other Assets |  | $ | 1,602,805 |  |  | $ | 30,131 |  |  | $ | 877,051 |  |  | $ | 14,071 |
Interest rate lock commitments | Other Assets |  | 126,983 |  |  | 1,722 |  |  | 64,365 |  |  | 861 |
Forward commitments | Other Assets |  | 106,000 |  |  | 330 |  |  | 174,000 |  |  | 1,242 |
Totals |  |  | $ | 1,835,788 |  |  | $ | 32,183 |  |  | $ | 1,115,416 |  |  | $ | 16,174 |
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate contracts | Other Liabilities |  | $ | 1,603,104 |  |  | $ | 30,178 |  |  | $ | 880,371 |  |  | $ | 14,094 |
Interest rate lock commitments | Other Liabilities |  | 13,528 |  |  | 39 |  |  | 1,829 |  |  | 122 |
Forward commitments | Other Liabilities |  | 189,000 |  |  | 1,304 |  |  | 52,000 |  |  | 86 |
Totals |  |  | $ | 1,805,632 |  |  | $ | 31,521 |  |  | $ | 934,200 |  |  | $ | 14,302 |
Gains and losses included in the Consolidated Statements of Income related to the Company’s derivative financial instruments were as follows as of the dates presented:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Interest rate contracts: |  |  |  |  |  |  |
Included in interest income on loans | $ | 8,784 |  |  | $ | 3,958 |  |  | $ | 17,765 |  |  | $ | 10,388 |
Interest rate lock commitments: |  |  |  |  |  |  |
Included in mortgage banking income | (1,029) |  |  | (261) |  |  | 944 |  |  | 127 |
Forward commitments |  |  |  |  |  |  |
Included in mortgage banking income | 2,423 |  |  | (1,167) |  |  | (2,129) |  |  | 1,184 |
Total | $ | 10,178 |  |  | $ | 2,530 |  |  | $ | 16,580 |  |  | $ | 11,699 |
Derivatives designated as cash flow hedges Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company uses both interest rate swap contracts and interest rate collars in an effort to manage future interest rate exposure on borrowings and loans, respectively. The swap hedging strategy converts the variable interest rate on the forecasted borrowings to a fixed interest rate. The collar hedging strategy limits the benefit to interest income when rates exceed the cap but protects interest income from interest rate fluctuations below the floor strike rate. The following table provides a summary of the Company’s derivatives designated as cash flow hedges as of the dates presented:
| Balance Sheet |  | September 30, 2025 |  | December 31, 2024
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative assets: |  |  |  |  |  |  |  |  |
Interest rate swaps | Other Assets |  | $ | 130,000 |  |  | $ | 17,043 |  |  | $ | 130,000 |  |  | $ | 22,780 |
Interest rate collars | Other Assets |  | 450,000 |  |  | 206 |  |  | — |  |  | — |
Total |  |  | $ | 580,000 |  |  | $ | 17,249 |  |  | $ | 130,000 |  |  | $ | 22,780 |
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate collars | Other Liabilities |  | $ | — |  |  | $ | — |  |  | $ | 450,000 |  |  | $ | 598 |
Totals |  |  | $ | — |  |  | $ | — |  |  | $ | 450,000 |  |  | $ | 598 |
Changes in fair value of cash flow hedges are, to the extent that the hedging relationship is effective, recorded as other comprehensive income and are subsequently recognized in earnings at the same time that the hedged item is recognized in earnings. The assessment of the effectiveness of the hedging relationship is evaluated under the hypothetical derivative method. The impact on other comprehensive income for the nine months ended September 30, 2025 and 2024 is discussed in Note 13, “Other Comprehensive Income.” Derivatives designated as fair value hedges Fair value hedges protect against changes in the fair value of an asset, liability, or firm commitment. Gains and losses on the derivative instrument and the offsetting gains and losses on the hedged item are recognized in current earnings. The Company enters into interest rate swap agreements to manage interest rate exposure on certain of the Company’s fixed-rate subordinated notes. The agreements convert a fixed rate of interest to a variable rate of interest based on SOFR. The Company also utilizes fair value hedges to manage interest rate exposure on certain fixed rate available-for-sale securities. The agreements convert the fixed interest rates to variable interest rates based on SOFR. The following table provides a summary of the Company's derivatives designated as fair value hedges as of the dates presented:
| Balance Sheet |  | September 30, 2025 |  | December 31, 2024
| Location | Notional Amount |  | Fair Value |  | Notional Amount |  | Fair Value
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate swaps - subordinated notes | Other Liabilities |  | $ | 100,000 |  |  | $ | 12,597 |  |  | $ | 100,000 |  |  | $ | 17,369 |
Interest rate swaps - securities | Other Liabilities |  | $ | 22,410 |  |  | $ | 56 |  |  | $ | — |  |  | $ | — |
Totals |  |  | $ | 122,410 |  |  | $ | 12,653 |  |  | $ | 100,000 |  |  | $ | 17,369 |
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 | Three Months Ended September 30, |  | Nine Months Ended September 30,
| Location | 2025 |  | 2024 |  | 2025 |  | 2024
Derivative liabilities: |  |  |  |  |  |  |  |  |
Interest rate swaps - subordinated notes | Interest Expense |  | $ | 842 |  |  | $ | 4,042 |  |  | $ | 4,771 |  |  | $ | 2,705 |
Interest rate swaps - securities | Interest Income |  | (56) |  |  | — |  |  | (56) |  |  | — |
Derivative liabilities - hedged items: |  |  |  |  |  |  |  |  |
Interest rate swaps - subordinated notes | Interest Expense |  | $ | (842) |  |  | $ | (4,042) |  |  | $ | (4,771) |  |  | $ | (2,705) |
Interest rate swaps - securities | Interest Income |  | 56 |  |  | — |  |  | 56 |  |  | — |
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 Item |  | Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of the Hedged Item
Balance Sheet Location | September 30, 2025 |  | December 31, 2024 |  | September 30, 2025 |  | December 31, 2024
Long-term debt |  | $ | 86,549 |  |  | $ | 81,648 |  |  | $ | 12,597 |  |  | $ | 17,369 |
Securities available for sale |  | 17,081 |  |  | — |  |  | 56 |  |  | — |
Credit Derivatives The Company has both bought and sold credit protection in the form of risk participation agreements. These risk participations, which meet the definition of credit derivatives, were entered into in the ordinary course of business to help the Company’s commercial customers manage their exposure to interest rate fluctuations. Risk participations in which credit protection has been purchased entitle the Company to receive a payment from the counterparty if the customer fails to make payment on any amounts due to the Company upon early termination of the swap transaction. The Company’s bought risk participation agreements have maturities between 2028 and 2032. For contracts where the Company sold credit protection, it would be required to make payment to the counterparty if the customer fails to make payment on any amounts due to the counterparty upon early termination of the swap transaction. The Company’s sold risk participation agreements have maturities between 2025 and 2032. The maximum potential amount of future payments under these risk participation agreements as of September 30, 2025 was approximately $2,306. This scenario occurs if variable interest rates were at zero percent and all counterparties defaulted with zero recovery. The fair value of risk participation agreements at September 30, 2025 and 2024 was immaterial. Offsetting Certain financial instruments, including derivatives, may be eligible for offset in the consolidated balance sheet when the “right of offset” 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
| September 30, 2025 |  | December 31, 2024 |  | September 30, 2025 |  | December 31, 2024
Gross amounts recognized | $ | 22,128 |  |  | $ | 34,505 |  |  | $ | 18,503 |  |  | $ | 28,550 |
Gross amounts offset in the Consolidated Balance Sheets | — |  |  | — |  |  | — |  |  | — |
Net amounts presented in the Consolidated Balance Sheets | 22,128 |  |  | 34,505 |  |  | 18,503 |  |  | 28,550 |
Gross amounts not offset in the Consolidated Balance Sheets |  |  |  |  |  |  |
Financial instruments - derivative assets available for offset | 17,530 |  |  | 27,939 |  |  | 17,530 |  |  | 27,939 |
Financial collateral (cash) pledged | — |  |  | — |  |  | 520 |  |  | 611 |
Net amounts | $ | 4,598 |  |  | $ | 6,566 |  |  | $ | 453 |  |  | $ | — |

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