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Derivatives | 9 Months Ended
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Sep. 30, 2025
Derivatives [Abstract] |
Derivatives | Note 9. Derivatives The Corporation is exposed to certain risks arising from both its business operations and economic conditions. The Corporation principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Corporation manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities. Fair Value Hedges – T he Corporation entered into certain interest rate swap contracts designated as fair value portfolio layer hedges of certain available-for-sale investment securities. The Corporation makes a fixed payment and receives a variable payment over the life of the contracts. The hedges were determined to be effective during all periods presented and are expected to be effective during the remaining term of the contracts. At September 30, 2025, the Corporation had posted $6.5 million of restricted cash collateral to a counterparty, reported in short-term interest-bearing deposits in other banks on the Consolidated Balance Sheet. Derivatives Not Designated as Hedges – These derivatives result from participations in interest rate swaps provided by external lenders as part of loan participation arrangements, therefore, are not used to manage interest rate risk in the Corporation’s assets or liabilities. Derivatives not designated as hedges are not speculative and result from a service the Corporation provides to certain lenders which participate in loans. The table below presents the fair value of the Corporation’s derivative financial instruments as well as their classification on the Balance Sheet.
(Dollars in thousands) |  | As of September 30, 2025 |  |  | As of December 31, 2024
|  |  | Notional amount |  | Balance Sheet Location |  |  | Fair Value |  |  | Notional amount |  | Balance Sheet Location |  |  | Fair Value
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  | $ | 102,992 |  | Other Liabilities |  | $ | 429 |  | $ | 111,087 |  | Other Assets |  | $ | 2,275
Total derivatives designated as hedging instruments |  |  |  |  |  |  | $ | 429 |  |  |  |  |  |  | $ | 2,275
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Contracts |  | $ | 5,907 |  | Other Liabilities |  | $ | — |  | $ | 6,064 |  | Other Liabilities |  | $ | —
Total derivatives not designated as hedging instruments |  |  |  |  |  |  | $ | — |  |  |  |  |  |  | $ | —
The table below presents the effect of the Corporation’s derivative financial instruments that are designated as hedging instruments on the Income Statement.
Effect of Derivatives Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Designated as Hedging Instruments under Subtopic 815-20 |  | Location of Gain or (Loss) Recognized in Income on Derivative |  | Amount of Gain or (Loss) Recognized in Income on Derivatives
|  |  |  | Three Months Ended |  | Nine Months Ended
(Dollars in thousands) |  |  |  | September 30, |  | September 30,
|  |  |  |  | 2025 |  | 2024 |  |  | 2025 |  | 2024
Interest rate swaps |  | Investment income |  | $ | 210 |  | $ | - |  | $ | 611 |  | $ | -
The table below presents the effect of the Corporation’s derivative financial instruments that are not designated as hedging instruments on the Income Statement.
Effect of Derivatives Not Designated as Hedging Instruments on the Statement of Financial Performance
Derivatives Not Designated as Hedging Instruments under Subtopic 815-20 |  | Location of Gain or (Loss) Recognized in Income on Derivative |  | Amount of Gain or (Loss) Recognized in Income on Derivatives
|  |  |  | Three Months Ended |  | Nine Months Ended
(Dollars in thousands) |  |  |  | September 30, |  | September 30,
|  |  |  |  | 2025 |  | 2024 |  |  | 2025 |  | 2024
Other Contracts |  | Other income |  | $ | - |  | $ | - |  | $ | - |  | $ | 1
The table below presents the carrying amount of the derivative financial instruments as of June 30, 2025 and 2024:
|  | Carrying amount of the hedged items |  | Cumulative amount of fair value hedging instruments
(Dollars in thousands) |  | As of September 30, |  | As of September 30,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Investment securities, AFS (1) |  | $ | 105,884 |  | $ | - |  | $ | 445 |  | $ | -
(1)The amounts represent the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedge period. At September 30, 2025, the fair value of the closed portfolio used in these hedging relationships was $104.4 million and the notional amount was $123.6 million. ‎

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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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