XML 46 R32.htm IDEA: XBRL DOCUMENT

DERIVATIVES

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Note 23—DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

The following table presents the gross notional amounts and estimated fair value of derivative instruments employed by the Company as of December 31, 2024 and 2023:

		2024
		Notional				Fair Value
(Dollars in thousands)		Amount				Assets				Liabilities
Fair Value Hedges:
Interest rate contracts
Pay fixed, receive variable – loans		$	150,000			$	896			$	—
Total derivatives		$	150,000			$	896			$	—

		2023
		Notional				Fair Value
(Dollars in thousands)		Amount				Assets				Liabilities
Fair Value Hedges:
Interest rate contracts
Pay fixed, receive variable – loans		$	150,000			$	1,069			$	—
Total derivatives		$	150,000			$	1,069			$	—

The above derivative is under a master netting arrangement. However, as of December 31, 2024 and 2023, there were no other outstanding derivative contracts. The net fair value of the hedged item and derivative item is recorded in other assets in the statement of financial condition. The following represents the carrying value of hedged items in fair value hedging relationships:

		Hedge Asset				Hedge Basis Adjustment
(Dollars in thousands)		Basis				Designated				Discounted
2024
Fair Value Hedges:
Interest rate contracts
Commercial real estate loans		$	900			$	—			$	—
Total		$	900			$	—			$	—

2023
Fair Value Hedges:
Interest rate contracts
Commercial real estate loans		$	900			$	—			$	—
Total		$	900			$	—			$	—

During the year ended December 31, 2024, income on interest settlements totaled $2.4 million. Changes in the fair value of the hedged item of $907 thousand was mostly offset by changes in the fair value of the swap derivative of $896 thousand. The residual was a result of hedge ineffectiveness and recorded in other income on the consolidated statement of operations. No portion of the change in fair value of derivatives designated as hedges has been excluded from effectiveness testing. No hedges were terminated during the year ended December 31, 2024.

During the year ended December 31, 2023, income on interest settlements totaled $1.6 million. Changes in the fair value of the hedged item of $1.1 million was offset by changes in the fair value of the swap derivative of $1.1 million. The residual was a result of hedge ineffectiveness and recorded in other income on the consolidated statement of operations. No portion of the change in fair value of derivatives designated as hedges has been excluded from effectiveness testing. No hedges were terminated during the year ended December 31, 2023.