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Derivatives | 12 Months Ended
--- | ---
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. Cash flow hedges of interest rate risk The Company’s objectives in using interest rate derivatives is to add stability to net interest income and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps, caps, and floors as part of its risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2024, such derivatives were used to hedge the variable cash flows associated with variable-rate liabilities and assets. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCI and subsequently reclassified into interest expense or interest income in the same period(s) during which the hedged transaction affects earnings. During the next twelve months, the Company estimates an additional $1.0 million will be reclassified as a reduction to interest expense. Derivatives not designated as hedges The Company enters into interest rate swaps with its loan customers to facilitate their financing requests. Upon entering into swaps with our loan customers, the Company will enter into corresponding offsetting derivatives with third parties. These derivatives represent economic hedges and do not qualify as hedges for accounting. These back-to-back interest rate swaps are reported at fair value in “other assets” and “other liabilities” in the Company’s Consolidated Balance Sheets. Changes in the fair value of interest rate swaps are recorded in other non-interest expense and sum to zero because of offsetting terms of swaps with borrowers and swaps with dealer counterparties. The table below presents the fair value of the Company’s derivative financial instruments, which includes accrued interest, as well as their classification on the Consolidated Balance Sheets as of December 31, 2024, and December 31, 2023 (in thousands):
| December 31, 2024
| Balance Sheet Location |  | Notional Amount |  | Fair Value
Derivatives designated as hedges: |  |  |  |  |
Interest rate swaps related to cash flow hedges | Other assets |  | $ | 250,000 |  |  | $ | 1,368 |
Interest rate swaps related to cash flow hedges | Other liabilities |  | 50,000 |  |  | 165 |
Derivatives not designated as hedges: |  |  |  |  |
Interest rate swaps related to customer loans | Other assets |  | $ | 99,899 |  |  | $ | 1,823 |
Interest rate swaps related to customer loans | Other liabilities |  | 99,899 |  |  | 1,823 |
| December 31, 2023
| Balance Sheet Location |  | Notional Amount |  | Fair Value
Derivatives designated as hedges: |  |  |  |  |
Interest rate swaps related to cash flow hedges | Other assets |  | $ | 100,000 |  |  | $ | 65 |
Interest rate swaps related to cash flow hedges | Other liabilities |  | 150,000 |  |  | 1,047 |
Derivatives not designated as hedges: |  |  |  |  |
Interest rate swaps related to customer loans | Other assets |  | $ | 72,572 |  |  | $ | 998 |
Interest rate swaps related to customer loans | Other liabilities |  | 72,572 |  |  | 998 |
The table below presents the effect of cash flow hedge accounting on AOCI for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 (in thousands):
|  | December 31, 2024 |  |  |  | December 31, 2024
Derivatives in Cash Flow Hedging Relationships |  | Amount of Gain or (Loss) Recognized in OCI on Derivative |  | Amount of Gain or (Loss) Recognized in OCI Included Component |  | Amount of Gain or (Loss) Recognized in OCI Excluded Component |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products |  | $ | (19) |  |  | $ | (19) |  |  | $ | — |  |  | Interest Income |  | $ | (611) |  |  | $ | (611) |  |  | $ | — |
Interest Rate Products |  | 4,021 |  |  | 4,021 |  |  | — |  |  | Interest Expense |  | 2,794 |  |  | 2,794 |  |  | — |
Total |  | $ | 4,002 |  |  | $ | 4,002 |  |  | $ | — |  |  |  |  | $ | 2,183 |  |  | $ | 2,183 |  |  | $ | — |
|  | December 31, 2023 |  |  |  | December 31, 2023
Derivatives in Cash Flow Hedging Relationships |  | Amount of Gain or (Loss) Recognized in OCI on Derivative |  | Amount of Gain or (Loss) Recognized in OCI Included Component |  | Amount of Gain or (Loss) Recognized in OCI Excluded Component |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products |  | $ | (329) |  |  | $ | (329) |  |  | $ | — |  |  | Interest Income |  | $ | (1,749) |  |  | $ | (1,749) |  |  | $ | — |
Interest Rate Products |  | (29) |  |  | (29) |  |  | — |  |  | Interest Expense |  | — |  |  | — |  |  | — |
Total |  | $ | (358) |  |  | $ | (358) |  |  | $ | — |  |  |  |  | $ | (1,749) |  |  | $ | (1,749) |  |  | $ | — |
|  | December 31, 2022 |  |  |  | December 31, 2022
Derivatives in Cash Flow Hedging Relationships |  | Amount of Gain or (Loss) Recognized in OCI on Derivative |  | Amount of Gain or (Loss) Recognized in OCI Included Component |  | Amount of Gain or (Loss) Recognized in OCI Excluded Component |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Included Component |  | Amount of Gain or (Loss) Reclassified from AOCI into Income Excluded Component
Interest Rate Products |  | $ | (2,178) |  |  | $ | (2,178) |  |  | $ | — |  |  | Interest Income |  | $ | (167) |  |  | $ | (167) |  |  | $ | — |
Total |  | $ | (2,178) |  |  | $ | (2,178) |  |  | $ | — |  |  |  |  | $ | (167) |  |  | $ | (167) |  |  | $ | — |
The table below presents the effect of the Company’s derivative financial instruments on the Consolidated Statements of Income as of December 31, 2024, December 31, 2023, and December 31, 2022 (in thousands).
| Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
| December 31, 2024 |  | December 31, 2023 |  | December 31, 2022
| Interest Income |  | Interest Expense |  | Interest Income |  | Interest Expense |  | Interest Income |  | Interest Expense
Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded. | $ | (451) |  |  | $ | 2,794 |  |  | $ | (895) |  |  | $ | — |  |  | $ | (167) |  |  | $ | — |
The effects of fair value and cash flow hedging: |  |  |  |  |  |  |  |  |  |  |
Gain or (loss) on fair value hedging relationships in Subtopic 815-20
Interest contracts |  |  |  |  |  |  |  |  |  |  |
Hedging items(1) | 160 |  |  | — |  |  | (1,025) |  |  | — |  |  | — |  |  | — |
Derivatives designated as hedging instruments | — |  |  | — |  |  | 1,879 |  |  | — |  |  | — |  |  | — |
Gain or (loss) on cash flow hedging relationships in Subtopic 815-20
Interest contracts |  |  |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from AOCI into income | (611) |  |  | 2,794 |  |  | (1,749) |  |  | — |  |  | (167) |  |  | — |
Amount of gain or (loss) reclassified from AOCI into income as a result that a forecasted transaction is no longer probable of occurring | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Amount of Gain or (Loss) Reclassified from AOCI into Income - Included Component | (611) |  |  | 2,794 |  |  | (1,749) |  |  | — |  |  | (167) |  |  | — |
Amount of Gain or (Loss) Reclassified from AOCI into Income - Excluded Component | — |  | — |  |  | — |  | — |  |  | — |  |  | — |
(1) The Company voluntarily discontinued a fair value hedging relationship and these amounts include the gain or (loss) and the hedging adjustment on a voluntary discontinued hedging relationship. The Company has allocated the basis adjustment to the remaining individual assets in the closed portfolio and will amortize the basis adjustment over a period consistent with the amortization of other discounts or premiums on the hedged assets. Credit-risk-related Contingent Features As of December 31, 2024, the fair value of derivatives in a liability position, which includes accrued interest but excludes any adjustment for non-performance risk related to these agreements, was $165 thousand. As of December 31, 2024, the Company has posted the full amount of collateral related to these agreements.

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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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