v3.26.1
Derivatives
6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives

Note 10 -- Derivatives

The Company utilizes interest rate swaps, designated as fair value hedges, to mitigate the risk of changing interest rates on the fair value of fixed rate loans. For derivative instruments that are designed and qualify as a fair value hedge, the gain or loss on the derivative instrument, as well as the offsetting loss or gain in the hedged asset attributable to the hedged risk, is recognized in current earnings.

Derivatives Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair value of outstanding derivatives designated as hedging instruments as of June 30, 2026 and December 31, 2025 (in thousands):

Derivative

 

Balance Sheet
Location

 

Weighted Average
Remaining Maturity
(Years)

 

Notional
Amount

 

 

Estimated
Value

 

June 30, 2026

 

 

 

 

 

 

 

 

 

 

Interest rate swap agreements

 

Other liabilities

 

2.8

 

$

6,701

 

 

$

(1,480

)

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

Interest rate swap agreements

 

Other liabilities

 

3.3

 

$

11,974

 

 

$

(1,247

)

The effects of the fair value hedges on the Company's income statement during the three and six months ended June 30, 2026 and 2025 were as follows (in thousands):

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

 

 

June 30,

 

 

June 30,

 

Derivative

 

Location of Gain (Loss) on Derivative

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Interest rate swap agreements

 

Interest income on loans

 

$

(153

)

 

$

(103

)

 

$

(154

)

 

$

(366

)

 

 

 

 

 

Three months ended

 

 

Six months ended

 

 

 

 

 

June 30,

 

 

June 30,

 

Derivative

 

Location of Gain (Loss) on Hedged Items

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Interest rate swap agreements

 

Interest income on loans

 

$

153

 

 

$

103

 

 

$

154

 

 

$

366

 

 

The following amounts were recorded on the balance sheet related to the cumulative basis adjustment for fair value hedges as of June 30, 2026 and December 31, 2025 (in thousands):

 

Line Item in the Balance Sheet in
Which the Hedge Items are Included

 

Carrying Amount of
the Hedged Assets

 

 

Cumulative Amount of Fair Value Hedging
Adjustments Included in the Carrying
Amount of the Hedged Assets

 

June 30, 2026

 

 

 

 

 

 

Loans

 

$

6,375

 

 

$

(327

)

 

 

 

 

 

 

 

December 31, 2025

 

 

 

 

 

 

Loans

 

 

11,493

 

 

 

(481

)

Derivatives Not Designated as Hedging Instruments

The following table provides the outstanding notional balances and fair value of outstanding derivatives not designated as hedging instruments as of the six months ended June 30, 2026 and December 31, 2025 (dollars in thousands):

 

 

 

Balance Sheet
Location

 

Weighted Average
Remaining Maturity
(Years)

 

Notional
Amount

 

 

Estimated
Value

 

June 30, 2026

 

 

 

 

 

 

 

 

 

 

Interest rate swap agreements

 

Other assets

 

2.9

 

$

23,897

 

 

$

1,806

 

Interest rate swap agreements

 

Loans

 

2.9

 

 

23,897

 

 

 

(327

)

Interest rate swap agreements

 

Other liabilities

 

2.9

 

 

23,897

 

 

 

1,480

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2025

 

 

 

 

 

 

 

 

 

 

Interest rate swap agreements

 

Other assets

 

3.0

 

$

27,233

 

 

$

1,728

 

Interest rate swap agreements

 

Loans

 

3.0

 

 

27,233

 

 

 

481

 

Interest rate swap agreements

 

Other liabilities

 

3.0

 

 

27,233

 

 

 

1,247