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Derivatives Hedging Instruments | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives Hedging Instruments | NOTE 22 - DERIVATIVE HEDGING INSTRUMENTS To accommodate customer need and to support the Company’s asset/liability positioning, on occasion we enter into interest rate swaps with a customer and a bank counterparty. The interest rate swaps are free-standing derivatives and are recorded at fair value. The Company enters into a floating rate loan and a fixed rate swap with our customer. Simultaneously, the Company enters into an offsetting fixed rate swap with a bank counterparty. 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 the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay a bank counterparty the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customer to effectively convert variable rate loans to fixed rate loans. Since the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations unless a significant difference in credit risk emerges between the counterparties at either end of one of the swap contracts. None of the Company’s derivatives are designated as hedging instruments. The Company presents derivative positions gross on the balance sheet for customers and net for financial institution counterparty positions subject to master netting arrangements. The fair value on the asset side was reduced by the margin call adjustment per the Company's netting arrangement in the amount of $6,330 as of December 31, 2024. The following table reflects the derivatives recorded on the balance sheet as of December 31:
|  | 2024 |  |  | 2023 |
|  | Notional Amount |  |  | Fair Value |  |  | Notional Amount |  |  | Fair Value |
Swap assets |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps with loan customers in an asset position |  | $ | 68,621 |  |  | $ | 1,169 |  |  | $ | 44,773 |  |  | $ | 2,114 |
Counterparty positions with financial institutions in an asset position |  |  | 247,727 |  |  |  | 10,469 |  |  |  | 228,873 |  |  |  | 10,367 |
Total before netting adjustments |  |  |  |  |  | 11,638 |  |  |  |  |  |  | 12,481 |
Netting adjustments - cash collateral posted by counterparties* |  |  |  |  |  | (6,330 | ) |  |  |  |  |  | — |
Total Swap assets |  |  |  |  | $ | 5,308 |  |  |  |  |  | $ | 12,481 |
Swap liabilities |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps with loan customers in a liability position |  | $ | 179,106 |  |  | $ | 11,638 |  |  | $ | 184,100 |  |  | $ | 12,481 |
Counterparty positions with financial institutions in a liability position |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total before netting adjustments |  |  |  |  |  | 11,638 |  |  |  |  |  |  | 12,481 |
Netting adjustments - cash collateral posted to counterparties** |  |  |  |  |  | — |  |  |  |  |  |  | — |
Total Swap liabilities |  |  |  |  | $ | 11,638 |  |  |  |  |  | $ | 12,481 |
*Cash collateral posted by counterparties represents the obligation to return cash collateral received from counterparties. |
**Cash collateral posted to counterparties represents the right to reclaim cash collateral that was paid to counterparties. |
Gross notional positions with customers |  | $ | 247,727 |  |  |  |  |  | $ | 228,873 |  |  |  |
Gross notional positions with financial institution counterparties |  | $ | 247,727 |  |  |  |  |  | $ | 228,873 |  |  |  |
The effect of swap fair value changes on the Consolidated Statement of Operations for the years ended December 31, 2024, 2023 and 2022 are as follows:
|  |  |  | Amount of Gain or (Loss) Recognized in Income on Derivatives |
Derivative Not Designated as Hedging Instruments |  | Location of Gain or (Loss) Recognized in Income on Derivative |  | 2024 |  |  | 2023 |  |  | 2022 |
Interest rate swaps related to customer loans |  | Other income |  | $ | — |  |  | $ | — |  |  | $ | — |
Total |  |  |  | $ | — |  |  | $ | — |  |  | $ | — |
The Company monitors and controls all derivative products with a comprehensive Board of Director approved commercial loan swap policy. All hedge transactions must be approved in advance by the Lenders Loan Committee or the Directors Loan Committee of the Board of Directors. The Company classifies changes in the fair value of derivatives with “Other” in the Consolidated Statements of Operation. Any fees paid to enter the swap contract at inception are recognized in earnings when received. Such fees amounted to $232 a nd $673 during the years ended December 31, 2024 and 2023, respectively. The Company did no t have any cash or securities pledged as collateral on its interest rate swaps with third party financial institutions at December 31, 2024 or 2023.

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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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