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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2025
Derivative Financial Instruments |
Derivative Financial Instruments | Note 9– Derivative Financial Instruments As a part of managing interest rate risk, the Corporation entered into interest rate swap agreements to modify the re-pricing characteristics of certain interest-bearing liabilities. The Corporation has designated its interest rate swap agreements as cash flow hedges under the guidance of ASC Subtopic 815-30, Derivatives and Hedging – Cash Flow Hedges. Cash flow hedges have the effective portion of changes in the fair value of the derivative, net of taxes, recorded in net accumulated other comprehensive income. In March 2016, the Corporation entered into four interest rate swap contracts totaling $30.0 million notional amount, hedging future cash flows associated with floating rate trust preferred debt. As of March 31, 2025, $15.0 million notional amount remains. The interest rate swap creates an effective fixed interest rate of 4.6550% on the $15.0 million notional amount of the Corporation’s junior subordination debt until the interest rate swap’s maturity in March 2026. The fair value of the interest rate swap contracts was $0.4 million and $0.5 million at March 31, 2025 and December 31, 2024, respectively. For the three-month period ended March 31, 2025, a $108,000 decrease in the aggregate value of the derivatives and $23,000 in related deferred tax benefits was recorded in net accumulated other comprehensive income to reflect the effective portion of cash flow hedges. This compares to a $73,000 increase in value and related deferred taxes of $19,000 for the three-months ended March 31, 2024. ASC Subtopic 815-30 requires the net accumulated other comprehensive (loss)/income to be reclassified to earnings if the hedge becomes ineffective or is terminated. There was no hedge ineffectiveness recorded for any of the three-month periods ended March 31, 2025 or 2024. The Corporation does not expect any material losses relating to these hedges to be reclassified into earnings within the next 12 months. ​ Interest rate swap agreements are entered into with counterparties that meet established credit standards and the Corporation believes that the credit risk inherent in these contracts is not significant as of March 31, 2025. ​ The table below discloses the impact of derivative financial instruments on the Corporation’s Consolidated Financial Statements for the three-month periods ended March 31, 2025 and 2024. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivative in Cash Flow Hedging Relationships | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Amount of gain or
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | (loss) recognized in
​ | ​ | Amount of (loss) or | ​ | Amount of gain or | ​ | income or derivative
​ | ​ | gain recognized in | ​ | (loss) reclassified from | ​ | (ineffective portion
​ | ​ | OCI on derivative | ​ | accumulated OCI into | ​ | and amount excluded
​ | ​ | (effective portion), | ​ | income (effective | ​ | from effectiveness
(in thousands) |  | net of tax |  | portion) (a) |  | testing) (b)
Interest rate contracts: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Three months ended: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
March 31, 2025 | ​ | $ | (85) | ​ | $ | — | ​ | $ | —
March 31, 2024 | ​ | ​ | 54 | ​ | ​ | — | ​ | ​ | —
​ Notes:
| (a) | Reported as interest expense
| (b) | Reported as other income

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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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