v3.25.4

DERIVATIVES AND HEDGING ACTIVITIES | 12 Months Ended
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Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts. The Company’s objectives in using interest rate derivatives are to manage its exposure to interest rate movements and to add stability to net interest income. To accomplish this objective, the Company has entered into interest rate cash flow hedges as part of its interest rate risk management strategy. As of December 31, 2025, the Company had five interest rate option contracts with a floor with notional value of $465.0 million, hedging floating-rate available for sale securities. Effect of Derivatives on the Consolidated Statements of Financial Condition All cash flow hedges are recorded gross on the Consolidated Statements of Financial Condition. The tables below present the outstanding notional balances and the fair value of the Company’s derivative assets as of December 31, 2025 and December 31, 2024.
|  | December 31, 2025 |  | December 31, 2024
(In thousands) |  | Notional Amount |  | Fair Value (Other Assets) |  | Notional Amount |  | Fair Value (Other Assets)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Cash flow hedges - interest rate products |  | $ | 465,000 |  |  | $ | 1,754 |  |  | $ | 265,000 |  |  | $ | 2,168 |
Effect of Cash Flow Hedge Accounting on the Consolidated Statements of Operations The table below presents the effect of the Company’s derivative financial instruments on the consolidated statements of operations as of December 31, 2025, December 31, 2024 and December 31, 2023:
| December 31, 2025 |  | December 31, 2024 |  | December 31, 2023
(In thousands) | Interest Income |  | Interest Expense |  | Interest Income |  | Interest Expense |  | Interest Income |  | Interest Expense
Gain or (loss) on cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |
Gain (loss) reclassified from accumulated OCI into income | $ | 14 |  |  | $ | — |  |  | $ | (130) |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Cash Flow Hedges Cash flow hedges involve the receipt of fixed amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company uses these types of derivatives to hedge the variable cash flows associated with existing or forecasted variable-rate securities. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest income in the same periods during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest income as interest payments are received on the Company’s variable-rate securities. During the next twelve months, the Company estimates that an additional $130.7 thousand will be reclassified as a reduction in interest income. The Company did not terminate any derivatives during the year ended December 31, 2025 and 2024, respectively. There were no derivatives during the year ended December 31, 2023. The table below presents the effect of the cash flow hedge accounting on accumulated other comprehensive income (loss) for the periods indicated:
|  |  | Year Ended December 31,
(In thousands) |  |  |  |  | 2025 |  | 2024 |  | 2023
Gain (loss) recognized in other comprehensive income (loss) |  |  |  |  | $ | (255) |  |  | $ | 514 |  |  | $ | — |
Gain (loss) reclassified from other comprehensive income into interest income |  |  |  |  | 14 |  |  | (130) |  |  | — |

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