v3.26.1
Derivative Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments And Hedging Activities Disclosure [Text Block]
NOTE 6: DERIVATIVE
INSTRUMENTS
The Company enters into interest rate swaps to manage exposure to changes in interest
rates on certain loans. The Company
does not enter into derivative instruments for speculative or trading purposes.
As of March 31, 2026, the Company had two pay-fixed, receive-variable
interest rate swaps with an aggregate notional
amount of $22.0 million. The swaps are designated as fair value hedges
of changes in the fair value of specified loans
attributable to changes in the benchmark interest rate (SOFR) and qualify
for the shortcut method under ASC 815,
Derivatives and Hedging
.
Under the terms of the swaps, the Company pays fixed rates and receives variable
rates based on SOFR. Because the
hedges qualify for the shortcut method, the hedge relationships are assumed to
be perfectly effective, and therefore no
hedge ineffectiveness is recognized.
Accrued interest receivable related to the swaps is included in Other Assets or Other
Liabilities, as applicable.
The following table presents the fair value of derivative instruments designated
as hedging instruments as of March 31,
2026 and December 31, 2025:
Balance Sheet
Fair Value
Fair Value
(Dollars in thousands)
Location
Asset
Liability
March 31, 2026:
Interest rate swaps (fair value hedge)
Other Assets
$
21
$
—
Total interest rate swap
agreements
$
21
$
—
The following table presents the effect of fair value hedge accounting
on the Consolidated Statements of Earnings for the
quarter ended March 31, 2026:
Amount of Gain
Amount of Gain
(Loss) Recognized
Location of Gain
(Loss) Recognized
in Income on Hedged
(Loss) Recognized
in Income on
Item Attributable
(Dollars in thousands)
in Income
Derivative
to Hedged Risk
Quarter ended March 31, 2026:
Interest rate swaps (fair value hedge)
Interest Income (Loans)
$
43
$
(43)
Total interest rate swap
agreements
$
43
$
(43)
The Company is exposed to credit risk in the event of nonperformance by
the counterparty to the interest rate swaps. The
Company manages this risk by transacting with a counterparty that meets established
credit standards. The Company does
not anticipate nonperformance by the counterparty.
These derivatives
are subject to a master netting arrangement; however,
the Company does not offset derivative assets and
liabilities on the Consolidated Balance Sheets.