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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Balance Sheet Related to Cumulative Basis Adjustment for Fair Value Hedges

As of September 30, 2025 and December 31, 2024, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:


Location in Consolidated Balance Sheets	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)	September 30, 2025		December 31, 2024		September 30, 2025		December 31, 2024
Total loans	$	50,080	$	24,957	$	80	$	(43	)

Summary of Fair Values of Derivative Financial Instruments Classification on Consolidated Balance Sheets

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets:


	Derivative Assets							Derivative Liabilities
	Notional Amount		Location	Fair Value				Notional Amount		Location	Fair Value
(Dollars in thousands)
September 30, 2025
Derivatives designated as hedging instruments:
Interest rate contracts - fair value hedge	$	50,000	Other assets	$	—			$	—	Other liabilities	$	80
Interest rate contracts - cash flow hedge		10,000	Other assets		—				—	Other liabilities		51
Total derivatives designated as hedging instruments	$	60,000		$	—			$	—		$	131

Derivatives not designated as hedging instruments:
Customer loan swaps	$	4,523	Other assets	$	76	$	4	$	4,523	Other liabilities	$	76

December 31, 2024
Derivatives designated as hedging instruments:
Interest rate contracts - fair value hedge	$	25,000	Other assets	$	43			$	—		$	—
Interest rate contracts - cash flow hedge		10,000	Other assets		—				—	Other liabilities		43
Total derivatives designated as hedging instruments	$	35,000		$	43			$	—		$	43

Derivatives not designated as hedging instruments:
Customer loan swaps	$	4,630	Other assets	$	71			$	4,630	Other liabilities	$	71

Credit-risk-related Contingent Features

By entering into derivative transactions, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required. Should a counterparty fail to perform under the terms of a derivative contract, the Company’s credit exposure on interest rate swaps is limited to the net positive fair value and accrued interest of all swaps with each counterparty. The Company seeks to minimize counterparty credit risk through credit approvals, limits, and other monitoring procedures. Institutional counterparties must have an investment grade credit rating and be approved by the Company’s board of directors. As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote. As of September 30, 2025 and December 31, 2024, the Company posted $450,000 and $781,000, respectively, of cash to the counterparties as collateral on its interest rate swap contracts and customer loan swaps, which was presented within cash and due from banks on the consolidated balance sheets.

Balance Sheet Offsetting

Certain financial instruments may be eligible for offset in the consolidated balance sheet and/or subject to master netting arrangements or similar agreements. The Company’s derivative transactions with institutional counterparties are generally executed under International Swaps and Derivative Association (“ISDA”) master agreements which include “right of set-off” provisions. In such cases there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Generally, the Company does not offset such financial instruments for financial reporting purposes.

The following tables present the information about derivative positions that are eligible for offset in the consolidated balance sheets as of September 30, 2025 and December 31, 2024:


(Dollars in thousands)	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Recognized		Financial Instruments Pledged (Received)		Cash Collateral Pledged (Received) (1)		Net Amount
September 30, 2025
Derivative Assets:
Interest rate contract - fair value hedge(2)	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contract - cash flow hedge(2)		—		—		—		—		—		—
Customer loan swap - dealer bank(3)		76		—		76		—		76		—
Total	$	76	$	—	$	76	$	—	$	76	$	—

Derivative Liabilities:
Interest rate contract - fair value hedge(2)	$	80	$	—	$	80	$	—	$	80	$	—
Interest rate contract - cash flow hedge(2)		51		—		51		—		51		—
Customer loan swap - dealer bank(3)		76		—		76		—		—		76
Total	$	207	$	—	$	207	$	—	$	131	$	76
December 31, 2024
Derivative Assets:
Interest rate contract - fair value hedge(2)	$	43	$	—	$	43	$	—	$	43	$	—
Interest rate contract - cash flow hedge(2)		—		—		—		—		—		—
Customer loan swap - dealer bank(3)		71		—		71		—		71		—
Total	$	114	$	—	$	114	$	—	$	114	$	—

Derivative Liabilities:
Interest rate contract - fair value hedge(2)	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contract - cash flow hedge(2)		43		—		43		—		43		—
Customer loan swap - dealer bank(3)		71		—		71		—		—		71
Total	$	114	$	—	$	114	$	—	$	43	$	71

Summary of Derivative Positions Offset in Consolidated Balance Sheets

The following tables present the information about derivative positions that are eligible for offset in the consolidated balance sheets as of September 30, 2025 and December 31, 2024:


(Dollars in thousands)	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Recognized		Financial Instruments Pledged (Received)		Cash Collateral Pledged (Received) (1)		Net Amount
September 30, 2025
Derivative Assets:
Interest rate contract - fair value hedge(2)	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contract - cash flow hedge(2)		—		—		—		—		—		—
Customer loan swap - dealer bank(3)		76		—		76		—		76		—
Total	$	76	$	—	$	76	$	—	$	76	$	—

Derivative Liabilities:
Interest rate contract - fair value hedge(2)	$	80	$	—	$	80	$	—	$	80	$	—
Interest rate contract - cash flow hedge(2)		51		—		51		—		51		—
Customer loan swap - dealer bank(3)		76		—		76		—		—		76
Total	$	207	$	—	$	207	$	—	$	131	$	76
December 31, 2024
Derivative Assets:
Interest rate contract - fair value hedge(2)	$	43	$	—	$	43	$	—	$	43	$	—
Interest rate contract - cash flow hedge(2)		—		—		—		—		—		—
Customer loan swap - dealer bank(3)		71		—		71		—		71		—
Total	$	114	$	—	$	114	$	—	$	114	$	—

Derivative Liabilities:
Interest rate contract - fair value hedge(2)	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contract - cash flow hedge(2)		43		—		43		—		43		—
Customer loan swap - dealer bank(3)		71		—		71		—		—		71
Total	$	114	$	—	$	114	$	—	$	43	$	71

(1) The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated balance sheets.

(2) Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with the counterparty and settles collateral on a net basis for all contracts.

(3) The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract.