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Interest Rate Swaps

12 Months Ended

Dec. 31, 2022

Interest Rate Swaps [Abstract]

Interest Rate Swaps

NOTE 15 – INTEREST RATE SWAPS

The Company enters into interest rate swaps that allow our commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate into a fixed-rate. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. There was no effect on earnings in any periods presented. At December 31, 2022, based upon the swap contract values, the company pledged cash in the amount of $350,000 as collateral for its interest rate swaps with a third-party financial institution which had a fair value $1,464,000.

Summary information regarding these derivatives is presented below:

(Amounts in thousands)
		Notional Amount, December 31,										Fair Value December 31,
			2022			2021		Interest Rate Paid		Interest Rate Received			2022			2021
Customer interest rate swap
Maturing November, 2030		$	6,513		$	6,873		Term SOFR + Margin		Fixed		$	889		$	144
Maturing December, 2030			4,297			4,553		Term SOFR + Margin		Fixed			575			91
Total		$	10,810		$	11,426						$	1,464		$	235
Third party interest rate swap
Maturing November, 2030		$	6,513		$	6,873		Fixed		Term SOFR + Margin		$	889		$	144
Maturing December, 2030			4,297			4,553		Fixed		Term SOFR + Margin			575			91
Total		$	10,810		$	11,426						$	1,464		$	235

The following table presents the fair values of derivative instruments in the Consolidated Balance Sheet.

		(Amounts in thousands)
		Assets				Liabilities
		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
December 31, 2022
Interest rate derivatives		Other assets	$	1,464		Other liabilities	$	1,464
December 31, 2021
Interest rate derivatives		Other assets		235		Other liabilities		235

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- References

No definition available.

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- Definition

The entire disclosure for derivatives and fair value of assets and liabilities.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-URI https://asc.fasb.org/topic&trid=2155941

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-URI https://asc.fasb.org/topic&trid=2229140

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