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DERIVATIVE INSTRUMENTS | 12 Months Ended
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Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | DERIVATIVE INSTRUMENTS The Company has outstanding interest rate swap contracts with certain customers and equal and offsetting interest rate swaps with other financial institutions entered into at the same time. These interest rate swap contracts are not designated as hedging instruments for mitigating interest rate risk. The objective of the transactions is to allow customers to effectively convert a variable rate loan to a fixed rate. In connection with each swap transaction, the Company agreed to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, the Company agreed to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts are designed to offset each other and do not significantly impact the Company’s operating results except in certain situations where there is a significant deterioration in the customer’s credit worthiness or that of the counterparties. At December 31, 2025 and 2024, management determined there was no such deterioration. At December 31, 2025 and 2024, the Company had ten and nine interest rate swap agreements outstanding with borrowers and financial institutions, respectively. Changes in the net fair value are recognized in other noninterest income. Fair value amounts are included in other assets and other liabilities. The Company has an outstanding interest cap contract with a customer and equal and an offsetting interest rate cap with another financial institution entered into at the same time. This interest rate cap contract is not designated as hedging instruments for mitigating interest rate risk. The objective of the transactions is to allow customers to effectively cap the interest rate on a variable rate loan. At December 31, 2025 and 2024, the Company had three credit risk participation agreements with another financial institution that are associated with interest rate swaps related to loans for which the Company is the lead agent bank and the other financial institution provides credit protection to the Company should the borrower fail to perform under the terms of the interest rate swap agreements. The fair value of the agreements is determined based on the market value of the underlying interest rate swaps adjusted for credit spreads and recovery rates. Derivative instruments not designated as hedges as of the periods indicated were as follows:
|  |  |  | December 31, 2025 |  | December 31, 2024
|  |  |  | Notional |  | Fair |  | Notional |  | Fair
|  | Classification |  | Amounts |  | Value |  | Amounts |  | Value
|  |  |  | (In thousands)
Financial institution counterparties: |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | Other assets |  | $ | 65,290 |  |  | $ | 3,684 |  |  | $ | 70,094 |  |  | $ | 6,277 |
Interest rate swaps |  | Other liabilities |  | 39,357 |  |  | (421) |  |  | — |  |  | — |
Interest rate caps |  | Other assets |  | 2,800 |  |  | 147 |  |  | — |  |  | — |
Customer counterparties: |  | Other liabilities |  |  |  |  |  |  |  |
Interest rate swaps |  | Other assets |  | $ | 39,357 |  |  | $ | 421 |  |  | $ | — |  |  | $ | — |
Interest rate swaps |  | Other liabilities |  | 65,290 |  |  | (3,684) |  |  | 70,094 |  |  | 6,277 |
Interest rate caps |  | Other liabilities |  | 2,800 |  |  | (147) |  |  | — |  |  | — |
Credit risk participations: |  |  |  |  |  |  |  |  |  |
Financial institutions |  | Other assets |  | 19,064 |  |  | 6 |  |  | 19,929 |  |  | 8 |
The weighted-average rates paid and received for interest rate swaps outstanding at December 31, 2025 and 2024 were as follows:
|  | December 31, 2025 |  | December 31, 2024
|  | Weighted-Average |  | Weighted-Average
|  | Interest Rate Received |  | Interest Rate Paid |  | Interest Rate Received |  | Interest Rate Paid
Financial institution counterparties |  | 6.01 | % |  | 5.04 | % |  | 6.79 | % |  | 4.36 | %
Customer counterparties |  | 5.04 | % |  | 6.01 | % |  | 4.36 | % |  | 6.79 | %

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