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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Our hedging policy allows the use of interest rate derivative instruments to manage our exposure to interest rate risk or hedge specified assets and liabilities. All derivative instruments are carried on the balance sheet at their estimated fair value
and are recorded in other assets or other liabilities, as appropriate, and in the net change in each of these financial statement line items in the accompanying consolidated statement of cash flows.
Fair Value Hedges
Fair value hedges are intended to manage interest rate risk associated with the underlying hedged items. The Company utilizes fair value hedges and applies the portfolio layer method to hedge stated amounts within a closed portfolio of certain available-for-sale mortgage-backed debt securities.
To mitigate the impact of interest rate fluctuations on fair value, the Company previously entered into interest rate swap agreements on individual loans, converting the fixed rate loans to a variable rate. The Company also previously utilized fair value hedges to hedge investment securities, converting the fixed rate security to a variable rate. Changes in fair value of both the hedge instruments and the underlying loan and security agreements are recorded as gains or losses in interest income. During the year ended December 31, 2024, the Company terminated the fair value hedges on loans and securities, recording a deferred gain of $2.3 million on the loan termination that will be accreted into interest income over the remaining life of the underlying loans, and a mark-to-market adjustment of $0.3 million that was recorded in non-interest income on the termination of the fair value hedges against investment securities. The remaining accretion on the loans was $1.4 million at June 30, 2026.
During the year ended December 31, 2025, the Company entered into interest rate swap agreements designated as fair value hedges of interest rate risk associated with certain fixed-rate investment securities. The swaps are intended to hedge changes in fair value attributable to fluctuations in that benchmark rate. Changes to fair value hedges on mortgage-backed securities are recorded as gains or losses in interest income. The hedged items consist of mortgage-backed securities which are located in the 'Investment securities, available for sale' line item on the consolidated balance sheet. The hedge relationship fair value is recorded in the "other assets" line item on the condensed consolidated balance sheet. The hedge relationships had stated maturities ranging from March 27, 2040 to March 27, 2042.
The company assesses hedge effectiveness on a monthly basis using regression analysis, the fair value hedges are considered highly effective.

Other Derivative Instruments

From time to time, we may enter into certain interest rate swaps that are not designated as hedging instruments. These interest rate derivative contracts relate to transactions in which we enter into an interest rate swap with a customer while concurrently entering into an offsetting interest rate swap with a third-party financial institution. We agree to pay interest to the customer on a notional amount at a variable rate and receive interest from the customer on a similar notional amount at a fixed interest rate. At the same time, we agree to pay a third-party financial institution the same fixed interest rate on the same notional amount and receive the same variable interest rate on the same notional amount. These interest rate derivative contracts allow our customers to effectively convert a variable rate loan to a fixed rate loan.

The Company enters into non–hedging derivatives in the form of mortgage loan forward sale commitments with investors and commitments to originate mortgage loans as part of its mortgage banking business. At June 30, 2026, the Company’s fair value of these derivatives were recorded and over the next 12 months are not expected to have a significant impact on the Company’s net income.

Changes in fair value of both the forward sale commitments and commitments to originate mortgage loans were recorded and the net gains or losses included in the Company’s gain on sale of loans.
The following tables summarize the fair value of our derivative financial instruments utilized by the Company on a gross basis for the periods indicated.

Asset DerivativesLiability Derivatives
June 30, 2026June 30, 2026
Notional
Amount		Fair
Value		Notional
Amount		Fair
Value
Derivatives designated as hedging instruments
  Interest rate contracts – fair value hedges$115,894 $2,087 $— $— 
      Total derivatives designated as hedging instruments115,894 2,087 — — 
Derivatives not designated as hedging instruments
Interest rate contracts - customer accommodation$437,133 $13,895 $437,133 $13,895 
Mortgage loan contracts— — 22,428 54 
Commitments to originate mortgage loans5,931 77 — — 
Total derivatives not designated as hedging instruments443,064 13,972 459,561 13,949 
Total derivatives subject to enforceable master netting arrangements, gross$558,958 $16,059 $459,561 $13,949 
Less: Gross amounts offset— — — — 
Total derivatives subject to enforceable master netting arrangements, net$558,958 $16,059 $459,561 $13,949 

Asset DerivativesLiability Derivatives
December 31, 2025December 31, 2025
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Derivatives designated as hedging instruments
Interest rate contracts - fair value hedges$121,542 $307 $— $— 
Total derivatives designated as hedging instruments121,542 307 — — 
Derivatives not designated as hedging instruments
Interest rate contracts - customer accommodation$460,276 $13,658 $460,276 $13,658 
Mortgage loan contracts— — 11,254 14 
Commitments to originate mortgage loans3,644 94 — — 
Total derivatives not designated as hedging instruments463,920 13,752 471,530 13,672 
Total derivatives subject to enforceable master netting arrangements, gross$585,462 $14,059 $471,530 $13,672 
Less: Gross amounts offset— — — — 
Total derivatives subject to enforceable master netting arrangements, net$585,462 $14,059 $471,530 $13,672 

While the Company is party to master netting arrangements with most of its swap derivative counterparties, the Company has elected to not offset derivative assets and liabilities under these agreements on its consolidated balance sheets.
Collateral exchanged between the Company and dealer bank counterparties is generally subject to thresholds and transfer minimums, and usually consists of marketable securities. At June 30, 2026, the Company did not pledge any marketable securities as collateral.
The effect of the derivative and the hedged item in fair value hedging relationships on the condensed consolidated statements of income for three and six month periods ended June 30, 2026 and June 30, 2025 is as follows:
Location of gain
(loss)
recognized on derivative and Hedge item
Amount of Gain (Loss) Recognized on Derivative and Hedged Item
Three Months Ended
Six Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Derivatives designated as hedging instruments
Interest rate contracts - fair value hedgeInterest income - investment securities1,236 — 2,089 — 
Hedged item(1,236)— (2,087)— 
Total$— $— $2 $— 
The effect of derivatives not designated as hedging instruments on the condensed consolidated statements of income for the three and six month periods ended June 30, 2026 and June 30, 2025 is as follows:
Location of gain
(loss)
recognized on derivative
Amount of Gain (Loss) Recognized on Derivative
Three Months Ended
Six Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Derivative not designated as hedging relationship
Mortgage loan contractsNon-interest income-gain (loss) on sale of loans$49 $(66)$(17)$443 
Commitments to originate mortgage loansNon-interest income-gain (loss) on sale of loans(59)(101)(40)(146)
Total$(10)$(167)$(57)$297 

The following tables summarize the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.

Amortized Cost of Hedged ItemsCumulative Hedge Accounting Basis Adjustments
June 30, 2026December 31, 2025June 30, 2026December 31, 2025
Available-for-Sale Debt Securities$118,434 $122,442 $(2,087)$(307)