NOTE 14. INTEREST RATE SWAPS The Company has entered into interest rate swap agreements to hedge against changes in future cash flows resulting from fluctuating interest rates related to the below noted borrowings. The interest rate agreements were 100% effective during the three and six months ended June 30, 2026 and 2025. Accordingly, the changes in fair value on the interest rate swaps have been classified in other comprehensive income. The fair values of the interest rate swap agreements are included in other assets and accounts payable, accrued expenses and other liabilities, respectively, on the consolidated balance sheets. Information related to the Company’s interest rate swap agreements is noted below (in thousands): | | | | | | | | | | | | | Hedged Item | | Effective Date | | Maturity Date | | Rate | | Amount | | Fair Value as of June 30, 2026 | 2029 Term Loan (1) | | 5/21/2026 | | 2/2/2029 | | 3.36% +
applicable spread | | $ | 100,000 | | $ | 1,305 | 2031 Term Loan (2) | | 1/29/2027 | | 2/4/2031 | | 3.54%+
applicable spread | | $ | 100,000 | | $ | 1,057 | 2031 Term Loan (3) | | 11/29/2024 | | 1/31/2027 | | 1.61% +
applicable spread | | $ | 80,000 | | $ | 1,090 | 2031 Term Loan (4) | | 9/30/2022 | | 1/31/2027 | | 3.84% +
applicable spread | | $ | 20,000 | | $ | 1 | Revolving Facility (5) | | 3/1/2023 | | 3/1/2028 | | 3.21% +
applicable spread | | $ | 50,000 | | $ | 583 | Revolving Facility (6) | | 4/4/2025 | | 1/1/2027 | | 3.43% +
applicable spread | | $ | 50,000 | | $ | 97 |
| (1) | As of June 30, 2026, the Company has utilized an interest rate swap to fix SOFR and achieve a weighted average fixed interest rate of 3.36% plus the applicable spread on the $100.0 million 2029 Term Loan balance. |
| (2) | The interest rate swap agreement hedges $100.0 million 2031 Term Loan balance under different terms and commences on January 29, 2027 to extend the fixed interest rate through February 4, 2031. |
| (3) | As of June 30, 2026, the Company has utilized interest rate swaps to fix SOFR and achieve a fixed interest rate of 1.61% plus the applicable spread on $80.0 million of the $100.0 million 2031 Term Loan balance. |
| (4) | As of June 30, 2026, the Company has utilized an interest rate swap to fix SOFR and achieve a fixed interest rate of 3.84% plus the applicable spread on $20.0 million of the $100.0 million 2031 Term Loan balance. |
| (5) | As of June 30, 2026, the Company has utilized an interest rate swap to fix SOFR and achieve a fixed interest rate of 3.21% plus the applicable spread on $50.0 million of the outstanding balance on the Revolving Facility. |
| (6) | As of June 30, 2026, the Company has utilized an interest rate swap to fix SOFR and achieve a fixed interest rate of 3.43% plus the applicable spread on $50.0 million of the outstanding balance on the Revolving Facility. |
The use of interest rate swap agreements carries risks, including the risk that the counterparties to these agreements are not able to perform. To mitigate this risk, the Company enters into interest rate swap agreements with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not currently anticipate that any of the counterparties to the Company’s interest rate swap agreements will fail to meet their obligations. As of June 30, 2026 and December 31, 2025, there were no events of default related to the Company's interest rate swap agreements.
|