DERIVATIVE INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position

Notional amounts are reference amounts from which contractual obligations are derived and are not recorded on the balance sheet. In our view, derivative notional is not an accurate measure of our derivative exposure when viewed in isolation from other factors, such as market rate fluctuations and counterparty credit risk.


	December 31, 2024						December 31, 2023 (restated)
	Fair Value						Fair Value
(dollars in thousands)	Assets		Liabilities		Notional amount		Assets		Liabilities		Notional amount
Derivatives designated as accounting hedges
Interest rate contracts
Fixed-rate mortgage-backed securities	$	2,653	$	654	$	167,363	$	—	$	1,324	$	150,000
Pools of commercial and commercial real estate loans	—		4,502		200,000		—		6,654		200,000
FHLB advances, brokered CDs and other borrowings	863		281		75,000		—		465		50,000
Total derivatives designated as accounting hedges	$	3,516	$	5,437	$	442,363	$	—	$	8,443	$	400,000
Derivatives not designated as accounting hedges
Interest rate contracts
Swaps	$	218	$	218	$	54,390	$	310	$	310	$	13,832
Interest rate lock commitments	71		—		3,907		62		—		2,405
Forward commitments to sell mortgage-backed securities	32		—		10,198		—		83		5,000
Total derivatives not designated as accounting hedges	$	321	$	218	$	68,495	$	372	$	393	$	21,237

The following table presents amounts recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges.


	Carrying amount of the hedged items				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
(dollars in thousands)	December 31, 2024		December 31, 2023 (restated)		December 31, 2024		December 31, 2023 (restated)

Investment securities available for sale	$	286,982	$	220,501	$	3,323	$	(1,324)

Schedule of Derivative Instruments, Gain (Loss)

The following table summarizes the effect of derivative instruments in fair value hedging relationships on the consolidated statements of income.


	Location of gain (loss) recognized in income on derivative	Gain (loss) recognized in income on derivative				Location of gain (loss) recognized in income on related hedged item	Gain (loss) recognized in income on related hedged items
(dollars in thousands)		2024		2023			2024		2023




Years Ended December 31,
Gain (loss) on fair value hedging relationships
Interest rate contracts
Fixed-rate mortgage-backed securities	Interest income on investment securities available for sale	$	9,341	$	—	Interest income on investment securities available for sale	$	(9,484)	$	—

The following table summarizes the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income.


	Gain (loss) recognized in AOCI on derivative						Location of gain (loss) recognized in income on derivative	Gain (loss) reclassified from AOCI into income
(dollars in thousands)	2024		2023 (restated)		2022 (restated)				2024		2023 (restated)		2022 (restated)






Years Ended December 31,
Gain (loss) on cash flow hedging relationships
Interest rate contracts
Pools of commercial and commercial real estate loans	$	(3,705)	$	(2,242)	$	2,551	Interest income on loans		$	(5,857)	$	(5,588)	$	113
							Other noninterest income		—		—		17,531
FHLB advances, brokered CDs and other borrowings	2,013		(210)		—		Interest expense		966		324		—
Total gain (loss) on cash flow hedging relationships	$	(1,692)	$	(2,452)	$	2,551			$	(4,891)	$	(5,264)	$	17,644

During the next 12 months, we estimate $1.9 million of losses will be reclassified into pretax earnings from derivatives designated as cash flow hedges.

The following table summarizes the effect of derivative instruments not designated as accounting hedges on the consolidated statements of income.


(dollars in thousands)	Location of gain (loss) recognized in income on derivative	2024		2023 (restated)		2022 (restated)
Years Ended December 31,
Gain (loss) on derivative instruments not designated as accounting hedges
Interest rate contracts	Residential mortgage banking revenue	$	123	$	(70)	$	(269)
	Other income	—		15		(88)
Total gain (loss) on derivative instruments not designated as accounting hedges		$	123	$	(55)	$	(357)

Disclosure of Credit Derivatives

The following table summarizes the most significant inputs and assumptions in determining the value of the credit enhancement derivatives as well as the resulting fair value as of December 31, 2024 and December 31, 2023:


	December 31, 2024		December 31, 2023
	MacTools commercial portfolio		Greensky consumer portfolio		LendingPoint consumer portfolio		MacTools commercial portfolio
Weighted average interest rate	9.50	%	10.47	%	14.62	%	10.50	%
Implied/selected cohort default rate (CDR)	15.00	%	4.02	%	17.50	%	15.00	%
Selected LGD	85.00	%	85.00	%	85.00	%	85.00	%
Annual expected loss	12.75	%	3.42	%	14.88	%	12.75	%
Credit mark	(20.66)	%	(7.18)	%	(23.82)	%	(23.32)	%
Interest mark	10.04	%	3.29	%	13.23	%	13.01	%

Fair value of derivative	10.61	%	1.56	%	(0.34)	%	10.31	%

- Definition

Tabular disclosure of credit derivatives which includes information by sellers of credit derivatives, about each credit derivative, or each group of similar credit derivatives, including (a) the nature of the credit derivative - its term, how it arose, the events or circumstances that would require the seller to perform under the credit derivative, and the current status of the payment/performance risk of the credit derivative; (b) the maximum potential amount of future payments (undiscounted) the seller could be required to make under the credit derivative; (c) the current fair value of the credit derivative; and (d) the nature of any recourse provisions under the credit derivative, and any assets held either as collateral or by third parties. A credit derivative is a derivative instrument (1) in which one or more of its underlyings are related to the credit risk of a specified entity (or a group of entities) or an index based on the credit risk of a group of entities and (2) that exposes the seller to potential loss from credit-risk-related events specified in the contract. Examples of credit derivatives within the scope of this paragraph include, but are not limited to, credit default swaps, credit spread options, and credit index products; also includes a hybrid instrument that has an embedded credit derivative (for example, but not limited to, a credit-linked note).

+ References + Details