v3.26.1
DERIVATIVES
 3 Months Ended
Mar. 31, 2026
DERIVATIVES [Abstract]  
DERIVATIVES
11. DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset-liability management strategy to help manage its interest rate risk position. These interest rate swaps are designated and qualify as fair value hedges and are entered into to reduce exposure to changes in fair value of fixed rate financial instruments. The notional amounts of the interest rate swaps do not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amounts and the other terms of the individual interest rate swap agreements.

The following table reflects the changes in fair value hedges included in the Consolidated Statements of Comprehensive Income for the periods indicated (dollars in thousands):

        
Three Months Ended
  
        
March 31,
  
Interest Rate Contracts
  
Location
  
2026
    
2025
  
Change in fair value of interest rate swaps hedging investment securities
  
Other noninterest expense
  
$
(64
)
  
$
(2,436
)
Change in fair value of hedged investment securities
  
Other noninterest expense
    
26
      
2,252
  
Change in fair value of interest rate swaps hedging fixed rate loans
  
Interest income - loans
    
—
      
(59
)
Change in fair value of hedged fixed rate loans
  
Interest income - loans
    
—
      
71
  

The following table reflects the fair value hedges included in the Consolidated Balance Sheets at the dates indicated (dollars in thousands):


   
March 31, 2026
    
December 31, 2025
  
   
Notional
Amount
    
Fair
Value
    
Notional
Amount
    
Fair
Value
  
Included in other liabilities:
                        
Interest rate swaps related to fixed rate loans
  
$
—
    
$
—
    
$
—
    
$
—
  
Interest rate swaps related to state and municipal securities
    
—
      
—
      
—
      
—
  
Included in other assets:
                                
Interest rate swaps related to fixed rate loans
  
$
2,006
    
$
24
    
$
2,030
    
$
24
  
Interest rate swaps related to state and municipal securities
    
116,810
      
9,666
      
117,860
      
9,730
  
Mortgage banking derivatives

The net gains (losses) relating to free standing derivative instruments used for risk management are summarized below for the periods indicated (dollars in thousands):

          
Three Months Ended
  
          
March 31,
  

  Location    2026        2025  
Gain (loss) on mortgage banking derivatives
  
Net gain on sales of loans
  
$
192
    
$
83
  

The following table reflects the amount and fair value of mortgage banking derivatives in the Consolidated Balance Sheets at the dates indicated (dollars in thousands):

   
March 31, 2026
    
December 31, 2025
  
   
Notional
Amount
    
Fair
Value
    
Notional
Amount
    
Fair
Value
  
Included in other assets:
                        
Forward contracts related to mortgage loans held for sale
  
$
18,125
    
$
67
    
$
—
    
$
—
  
Interest rate lock commitments
    
24,856
      
403
      
16,127
      
216
  
                                 
Included in other liabilities:
                                
Forward contracts related to mortgage loans held for sale
  
$
4,641
    
$
127
    
$
15,746
    
$
65
  

The Company had received cash collateral of $9.3 million and $10.5 million to offset asset derivative positions on its interest rate swaps at March 31, 2026 and December 31, 2025, respectively. This amount is reported in other liabilities in the Consolidated Balance Sheets. The Company had advanced $1.1 million to offset liability derivative positions on its interest rate swaps at March 31, 2026 and December 31, 2025. Additionally, the Company had advanced $270 thousand on its mortgage forward contracts at March 31, 2026 and December 31, 2025. The advanced cash collateral amounts are reported in cash and due from banks in the Consolidated Balance Sheets.