v3.26.1
DERIVATIVES
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES 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.
Interest rate swaps with notional amounts totaling $526.0 million and $349.0 million at December 31, 2025 and 2024, respectively, were designated as cash flow hedges of certain FHLB advances and brokered deposits. They were determined to be highly effective during all periods presented. The Company expects the hedges to remain highly effective during the remaining terms of the swaps.
Summary information about the interest-rate swaps designated as cash flow hedges as of the dates presented is as follows:
December 31, 2025December 31, 2024
(Dollars in thousands)
Notional amounts$526,000 $349,000 
Weighted average pay rates3.30 %3.12 %
Weighted average receive rates3.89 %4.62 %
Weighted average maturity1.8 years2.4 years
Gross unrealized gain included in other assets$3,573 $8,817 
Gross unrealized loss included in other liabilities2,452 453 
Unrealized gains (losses), net$1,121 $8,364 
At December 31, 2025, the Company held no cash collateral pledged from the counterparty for these interest-rate swaps and had $1.6 million in securities pledged to the counterparty. At December 31, 2024, the Company held $9.0 million of cash collateral pledged from the counterparty for these interest-rate swaps and had no securities pledged to the counterparty.
Interest income or expense recorded on these swap transactions is reported as a component of interest expense on FHLB advances or brokered deposits. Interest income for the years ended December 31, 2025 and 2024 totaled $4.7 million and $6.4 million, respectively. At December 31, 2025, the Company expected $1.1 million of the unrealized gain to be reclassified as a reduction to interest expense during 2026.
Cash Flow Hedge
The effect of cash flow hedge accounting on accumulated other comprehensive income for the years ended December 31, 2025 and 2024 are as follows:
Amount of (Loss) Gain Recognized in OCI on Derivative (1)
Location of Gain (Loss) Reclassified from OCI into Income/(Expense)
Amount of Gain Reclassified from OCI to Expense
(In thousands)
Year Ended December 31, 2025
Interest rate contracts$(7,242)Interest Expense$4,726 
Year Ended December 31, 2024
Interest rate contracts$781 Interest Expense$6,355 
(1) Net of tax, adjusted for deferred tax valuation allowance.