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Interest Rate Swaps | 3 Months Ended
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Mar. 31, 2024
Interest Rate Swaps [Abstract] |
Interest Rate Swaps | 11. 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 March 31, 2024 and December 31, 2023, 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. The fair value of the swaps as of March 31, 2024 and December 31, 2023 was $1,336,000 and $1,225,000, respectively. Summary information regarding these derivatives is presented below
(Amounts in thousands)
|  | Notional Amount |  |  |  |  |  | Fair Value
|  |  | March 31, 2024 |  |  | December 31, 2023 |  | Interest Rate Paid |  | Interest Rate Received |  |  | March 31, 2024 |  |  | December 31, 2023
Customer interest rate swap |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturing November, 2030 | $ | 6,051 |  | $ | 6,145 | Term SOFR + Margin | Fixed |  | $ | 814 |  | $ | 746
Maturing December, 2030 |  | 3,965 |  |  | 4,032 | Term SOFR + Margin | Fixed |  |  | 522 |  |  | 479
Total |  | $ | 10,016 |  | $ | 10,177 |  |  |  |  |  | $ | 1,336 |  | $ | 1,225
Third party interest rate swap |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturing November, 2030 | $ | 6,051 |  | $ | 6,145 |  | Fixed | Term SOFR + Margin | $ | 814 |  | $ | 746
Maturing December, 2030 |  | 3,965 |  |  | 4,032 |  | Fixed | Term SOFR + Margin |  | 522 |  |  | 479
Total |  | $ | 10,016 |  | $ | 10,177 |  |  |  |  |  | $ | 1,336 |  | $ | 1,225
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
March 31, 2024 |  |  |  |  |  |  |  |
Interest rate derivatives |  | Other assets | $ | 1,336 |  | Other liabilities | $ | 1,336
December 31, 2023 |  |  |  |  |  |  |  |
Interest rate derivatives |  | Other assets |  | 1,225 |  | Other liabilities |  | 1,225

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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 -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//820/tableOfContent + Details
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