v3.25.3
Derivatives (Notes)
 9 Months Ended
Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative [Text Block] Derivatives
The Company has entered into interest rate swap agreements and interest rate collars as part of its interest rate risk management strategy. The Company uses interest rate derivatives to manage its interest rate risk exposure on certain loans, borrowings and deposits due to interest rate movements. The notional amounts of the interest rate derivatives do not represent amounts exchanged by the counterparties, but rather, the notional amount is used to determine, along with other terms of the derivative, the amounts to be exchanged between the counterparties.
Interest Rate Derivatives Designated as a Cash Flow Hedge: The Company had interest rate derivatives designated as cash flow hedges with total notional amounts of $520,000 and $420,000 at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025, the Company had interest rate swaps with a total notional amount of $270,000 that hedge the interest payments of rolling one-month funding consisting of FHLB advances or brokered deposits. Also, as of September 30, 2025, the Company had interest rate swaps with a total notional amount of $40,000 that effectively convert variable-rate long-term debt to fixed-rate debt and swaps with a total notional amount of $110,000 that hedge the interest payments of certain customer deposit accounts.

The Company had interest rate collars designated as cash flow hedges with total notional amounts of $100,000 and $0 as of September 30, 2025 and December 31, 2024, respectively. The Company enters into interest rate collars, to mitigate interest rate risk on certain customer deposits. The structure of the interest rate collars is such that the Company pays the counterparty an incremental amount if the index rate falls below the floor rate. Conversely, the Company receives an incremental amount if the index rate rises above the cap rate.

Derivatives Not Designated as Accounting Hedges: To accommodate customer needs, the Company on occasion offers loan level interest rate swaps to its customers and offsets its exposure from such contracts by entering into mirror image swaps with a swap counterparty (back-to-back swap program). The interest rate swaps are free-standing derivatives and are recorded at fair value. The Company enters into a floating-rate loan and a fixed-rate swap with our customer. Simultaneously, the Company enters into an offsetting fixed-rate swap with a swap counterparty. In connection with each swap transaction, the Company agrees to pay interest to the customer on a notional amount at a variable interest rate and receive interest from the customer on the same notional amount at a fixed interest rate. At the same time, the Company agrees to pay a swap counterparty the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These transactions allow the Company’s customers to effectively convert variable-rate loans to fixed-rate loans. The customer accommodations and any offsetting swaps are treated as non-hedging derivative instruments which do not qualify for hedge accounting.

The table below identifies the balance sheet category and fair values of the Company's derivative instruments as of September 30, 2025 and December 31, 2024.

September 30, 2025December 31, 2024
Cash Flow Hedges:
Interest Rate Swaps:
  Gross notional amount$420,000 $420,000 
  Fair value in other assets3,691 9,897 
  Fair value in other liabilities(1,104)(270)
  Weighted-average floating rate received4.59 %4.84 %
  Weighted-average fixed rate paid3.30 %3.30 %
  Weighted-average maturity in years1.62.4
Interest Rate Collars:
  Gross notional amount
$100,000 $— 
  Fair value in other assets— — 
  Fair value in other liabilities
(133)— 
  Weighted-average maturity in years2.80.0
Non-Hedging Derivatives:
  Gross notional amount$281,828 $287,235 
  Fair value in other assets10,111 14,284 
  Fair value in other liabilities(10,111)(14,284)
The following table identifies the pre-tax gains or losses recognized on the Company's derivative instruments designated as cash flow hedges for the three and nine months ended September 30, 2025 and 2024.

Three Months Ended September 30,Nine Months Ended September 30,
2025202420252024
Pre-tax gain (loss) recognized in other comprehensive income$374 $(8,218)$(2,961)$1,635 
Decrease in interest expense(1,396)(2,697)(4,212)(8,510)

The Company estimates there will be approximately $5,423 reclassified from accumulated other comprehensive income (loss) to decrease interest expense through the 12 months ending September 30, 2026 related to cash flow hedges.

The Company is exposed to credit risk in the event of nonperformance by interest rate derivative counterparties, which is minimized by collateral-pledging provisions in the agreements. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration. As of September 30, 2025 and December 31, 2024, the Company pledged $240 and $30, respectively, of collateral to the counterparties in the form of cash on deposit. As of September 30, 2025 and December 31, 2024, the Company's counterparties pledged $11,880 and $24,160, respectively, of collateral to the Company in the form of cash on deposit. The interest rate swap product with the borrower is cross-collateralized with the underlying loan collateral and therefore there is no pledged cash collateral under swap contracts with customers.