v3.26.1
Derivative Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
From time to time, the Company enters into derivative financial instruments as part of its interest rate management activities and to facilitate customer transactions. Those instruments may or may not be designated and qualify as part of a hedging relationship. The customer derivatives we use for the Company’s account are generally matched against derivatives from third parties, but are not designated as hedging instruments.
At June 30, 2026 and December 31, 2025, the notional amounts and fair values of the Company’s derivative instruments were as follows:
June 30, 2026December 31, 2025
(in thousands)
Number of contracts
Notional Amounts
Other AssetsOther Liabilities
Number of contracts
Notional Amounts
Other AssetsOther Liabilities
Derivatives designated as hedging instruments
Interest rate swaps designated as cash flow hedges8 $314,178 $1,194 $— 6 $114,178 $486 $— 
Customer Derivatives not designated as hedging instruments
Interest rate swaps:
Customers138 1,347,105 4,632 21,014 145 1,438,417 17,343 18,546 
Third party broker138 1,347,105 21,014 4,632 145 1,438,417 18,546 17,343 
276 2,694,210 25,646 25,646 290 2,876,834 35,889 35,889 
Credit risk participation agreements44 132,838 — — 13 155,715 — — 
Interest rate caps:
Customers8 107,308 — 338 5 72,301 — 164 
Third party broker8 107,308 338 — 5 72,301 164 — 
16 214,616 338 338 10 144,602 164 164 
Total derivatives not designated as hedging instruments336 $3,041,664 $25,984 $25,984 313 $3,177,151 $36,053 $36,053 
Total derivative instruments344 $3,355,842 $27,178 $25,984 319 $3,291,329 $36,539 $36,053 
Derivatives Designated as Hedging Instruments
Interest Rate Swaps On Debt Instruments
The Company enters into interest rate swap contracts on debt instruments which the Company designates and qualifies as cash flow hedges. These interest rate swaps are designed as cash flow hedges to manage the exposure that arises from differences in the amount of the Company’s known or expected cash receipts and the known or expected cash payments on designated debt instruments. These interest rate swap contracts involve the Company’s payment of fixed-rate amounts in exchange for the Company receiving variable-rate payments over the life of the contracts without exchange of the underlying notional amount.
At June 30, 2026 and December 31, 2025, the Company had five interest rate swap contracts with notional amounts totaling $64.2 million, maturing in the third and fourth quarters of 2029. These contracts were designated as cash flow hedges to manage the exposure of variable rate interest payments on all of the Company’s outstanding variable-rate junior subordinated debentures with principal amounts at June 30, 2026 and December 31, 2025 totaling $64.2 million. The Company expects these interest rate swaps to be highly effective in offsetting the effects of changes in interest rates on cash flows associated with the Company’s variable-rate junior subordinated debentures. The Company recognized unrealized gains of $0.1 million and $0.1 million in the three months ended June 30, 2026 and 2025, respectively, and unrealized gains of $0.2 million and $0.1 million in the six months ended June 30, 2026 and 2025, respectively, in connection with these interest rate swap contracts, which were included as part of interest expense on junior subordinated debentures in the Company’s consolidated statement of operations and comprehensive income.
In 2019, the Company terminated 16 interest rate swaps that had been designated as cash flow hedges of variable rate interest payments on the outstanding and expected rollover of variable-rate advances from the FHLB. The Company is recognizing the contracts’ cumulative net unrealized gains of $8.9 million in earnings over the remaining original life of the terminated interest rate swaps ranging between one month and seven years. The Company recognized approximately $0.2 million in each of the three months ended June 30, 2026 and 2025, and $0.4 million in each of the six months ended June 30, 2026 and 2025, as a reduction of interest expense on FHLB advances as a result of this amortization. As of June 30, 2026, the remaining cumulative net unrealized gains related to these interest rate swaps was $0.2 million.


Interest Rate Swaps On Loans

As of June 30, 2026, the Company had three interest rate swap agreements designated as cash flow hedges, with aggregate notional amounts of $250.0 million, and with maturities in the second quarter of 2027, 2028 and 2029. During the six months ended June 30, 2026, the Company entered into two additional interest rate swap agreements with aggregate notional amounts of $200.0 million as part of its interest rate risk management strategy. As of December 31, 2025, the Company had one interest rate swap contract with a notional amount of $50.0 million, maturing in the second quarter of 2027. The Company designated these interest rate swaps as cash flow hedges to manage interest rate risk exposure on variable rate interest receipts on the first $250.0 million and $50 million principal balance of a pool of loans as of June 30, 2026 and December 31, 2025. These interest rate swap contracts involve the Company’s payment of variable-rate amounts in exchange for the Company receiving fixed-rate payments over the life of the contracts without exchange of the underlying notional amounts. Unrealized gains or losses on these instruments are included as part of interest income on loans in the Company’s consolidated statement of operations and comprehensive income.
Derivatives Not Designated as Hedging Instruments
a) Customer related positions
The Company offers certain derivatives products, including interest rate swaps and caps, directly to qualified commercial banking customers to facilitate their risk management strategies. The Company partially offsets its exposure to interest rate swaps and caps by entering similar derivative contracts with various third-party brokers.

Interest Rate Swaps
Interest rate swap contracts involve the Company’s payment of variable-rate amounts to customers in exchange for the Company receiving fixed-rate payments from customers over the life of the contracts without exchange of the underlying notional amount.

The Company enters into swap participation agreements with other financial institutions to manage the credit risk exposure on certain interest rate swaps with customers. Under these agreements, the Company, as the beneficiary or guarantor, will receive or make payments from/to the counterparty if the borrower defaults on the related interest rate swap contract. The notional amount of these agreements is based on the Company’s pro-rata share of the related interest rate swap contracts.
Interest Rate Caps

Interest rate cap contracts involve the Company making payments if an interest rate exceeds the agreed strike price.

Credit Risk-Related Contingent Features
Some agreements may require the Company to pledge securities as collateral when the valuation of the interest rate swap derivative contracts fall below a certain amount. At June 30, 2026 and December 31, 2025, there were $1.3 million and $11.0 million, respectively, in securities pledged as collateral for interest rate swaps in a liability position. Additionally, most of our derivative arrangements with counterparties require the posting of collateral upon meeting certain net exposure thresholds. As of June 30, 2026 and December 31, 2025, the Company had cash held as collateral for derivatives margin calls of $7.9 million and $5.3 million, respectively. See Note 2 “Interest Earning Deposits with Banks, Other Short-Term Investments and Restricted Cash” for additional information about cash held as collateral. As of June 30, 2026 and December 31, 2025, there were no collateral requirements related to interest rate swaps with third-party brokers not designated as hedging instruments.