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Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments The Company utilizes interest rate swap derivative contracts to facilitate the needs of its commercial customers whereby it enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. In connection with each swap transaction, the Company agrees 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 agrees to pay another financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. The transaction allows the Company’s customer to effectively convert a variable rate loan to a fixed rate and the Company recognizes immediate income based upon the difference in the bid/ask spread of the underlying transactions with its customers and the third-party. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations. These interest rate swaps are not designated as hedging instruments. The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk for derivatives with the customer is controlled through the credit approval process, amount limits, and monitoring procedures and is concentrated within our primary market areas. Credit risk for derivatives with third-parties is concentrated among four well-known broker dealers. Fee income related to interest rate swap derivative contract transactions is recorded in Interest rate swap fees on the unaudited Condensed Consolidated Statements of Income when there is fee income received during the period. The fair value of derivative positions outstanding is included in Prepaid expenses and other assets and Accrued expenses and other liabilities in the unaudited Condensed Consolidated Statements of Financial Condition. The gains and losses due to changes in fair value and all cash flows are included in Other income in the unaudited Condensed Consolidated Statements of Income, but typically net to zero based on the identical back-to-back interest rate swap derivative contracts unless a credit valuation adjustment is recorded to appropriately reflect nonperformance risk in the fair value measurement. Various factors impact changes in the credit valuation adjustments over time, including changes in the risk ratings of the parties to the contracts, as well as changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments. The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:
| September 30, 2025 |  | December 31, 2024
| Notional Amounts |  | Estimated Fair Value |  | Notional Amounts |  | Estimated Fair Value
| (Dollars in thousands)
Non-hedging interest rate derivatives |  |  |  |  |  |  |
Interest rate swap asset (1) | $ | 278,171 |  |  | 15,674 |  |  | $ | 299,236 |  |  | $ | 23,867 |
Interest rate swap liability (1) | 278,171 |  |  | (15,674) |  |  | 299,236 |  |  | (23,867) |
(1) The estimated fair value of derivatives with customers was $(12.8) million and $(22.7) million as of September 30, 2025 and December 31, 2024, respectively. The estimated fair value of derivatives with third-parties was $12.8 million and $22.7 million as of September 30, 2025 and December 31, 2024, respectively.

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