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Derivative Financial Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Hedging Activities

Note 9. Derivative Financial Instruments and Hedging Activities

The Company enters into interest rate swap agreements to accommodate the needs of its banking customers. The Company mitigates the interest rate risk entering into these swap agreements by entering into equal and offsetting swap agreements with a highly rated third-party financial institution. These back-to-back swap agreements are free-standing derivatives and are recorded at fair value in the Company’s consolidated balance sheets (asset positions are included in other assets and liability positions are included in other liabilities).

The following table presents the notional and fair values of the swap agreements as of the dates stated.

		December 31, 2023
(Dollars in thousands)		Notional Amount				Fair Value
Interest rate swap agreement
Receive fixed/pay variable swaps		$	2,178			$	(71	)
Pay fixed/receive variable swaps			2,178				71
		December 31, 2022
(Dollars in thousands)		Notional Amount				Fair Value
Interest rate swap agreement
Receive fixed/pay variable swaps		$	2,178			$	(95	)
Pay fixed/receive variable swaps			2,178				95

As part of its efforts to sell originated government guaranteed and conventional residential mortgages into the secondary market, the Bank had entered into $2.6 million and $11.7 million of rate lock commitments with borrowers, net of expected fallout, as of December 31, 2023 and 2022, respectively, and $7.4 million and $12.8 million of closed loan inventory waiting for sale, which were hedged by $13.5 million and $21.5. million in forward TBA mortgage backed securities as of December 31, 2023 and 2022, respectively. Mortgage derivative assets totaled $335 thousand and $112 thousand as of December 31, 2023 and 2022, respectively, and mortgage derivative liabilities, which are included in other liabilities on the consolidated balance sheets, were $140 thousand and $24 thousand as of December 31, 2023 and 2022, respectively.

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- References

No definition available.

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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

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