v3.26.3
Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

NOTE 7 DERIVATIVE FINANCIAL INSTRUMENTS

During the last quarter of 2023, the Bank entered into three pay-fixed, receive-variable interest rate swap transactions, with a combined notional value of $100.0 million, each of which was designated and qualified as cash flow hedges.

The following table presents amounts that were recorded on the Company's consolidated balance sheets related to cumulative basis adjustments for interest rate swap derivatives designated as fair value accounting hedges as of September 30, 2026 and December 31, 2025.

 

 

 

(In Thousands)

 

 

 

September 30, 2026

 

 

December 31, 2025

 

Line Item in the Consolidated Balance Sheets in which the Hedged Item is Included

 

Carrying Amount of
the Hedged Assets

 

 

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

 

 

Carrying Amount of
the Hedged Assets

 

 

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

 

Loans

 

$

197,583

 

 

$

(159

)

 

$

214,513

 

 

$

1,719

 

 

The following tables present a summary of interest rate swap derivatives designated as fair value accounting hedges of fixed-rate receivables used in the Bank's asset/liability management activities at September 30, 2026 and December 31, 2025, identified by the underlying interest rate-sensitive instruments.

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

 

 

 

 

 

 

Notional Value (In

 

 

Remaining Maturity

 

 

Fair Value (In

 

 

Weighted Average Rate

 

Instruments Associated With

 

Thousands)

 

 

(In Years)

 

 

Thousands)

 

 

Receive

 

Pay

 

Loans

 

$

100,000

 

 

 

0.8

 

 

$

248

 

 

 USD-SOFR-OIS

 

 

4.47

%

Total swap portfolio at September 30, 2026

 

$

100,000

 

 

 

0.8

 

 

$

248

 

 

 USD-SOFR-OIS

 

 

4.47

%

 

 

 

 

 

 

Weighted Average

 

 

 

 

 

 

 

 

 

 

 

Notional Value (In

 

 

Remaining Maturity

 

 

Fair Value (In

 

 

Weighted Average Rate

 

Instruments Associated With

 

Thousands)

 

 

(In Years)

 

 

Thousands)

 

 

Receive

 

Pay

 

Loans

 

$

100,000

 

 

 

1.6

 

 

$

(1,555

)

 

 USD-SOFR-OIS

 

 

4.47

%

Total swap portfolio at December 31, 2025

 

$

100,000

 

 

 

1.6

 

 

$

(1,555

)

 

 USD-SOFR-OIS

 

 

4.47

%

 

These derivative financial instruments were entered into for the purpose of managing the interest rate risk of certain assets and liabilities. The Bank pledged $800 thousand and $2.3 million of cash collateral to counterparties as security for its obligations related to these interest rate swap transactions at September 30, 2026 and December 31, 2025, respectively. Collateral posted and received is dependent on the market valuation of the underlying hedges.

The following table presents the notional amount and fair value of interest rate swaps utilized by the Bank at September 30, 2026 and December 31, 2025.

 

 

 

(In Thousands)

 

 

 

September 30, 2026

 

 

December 31, 2025

 

 

 

Notional Amount

 

 

Fair Value

 

 

Notional Amount

 

 

Fair Value

 

Asset Derivatives

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps associated with loans

 

$

50,000

 

 

$

275

 

 

$

-

 

 

$

-

 

Total contracts

 

$

50,000

 

 

$

275

 

 

$

-

 

 

$

-

 

Liability Derivatives

 

 

 

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps associated with loans

 

$

50,000

 

 

$

(27

)

 

$

100,000

 

 

$

(1,555

)

Total contracts

 

$

50,000

 

 

$

(27

)

 

$

100,000

 

 

$

(1,555

)

 

The following table presents the effects of the Bank's interest rate swap agreements on the Company’s consolidated statement of income during the three and nine months ended September 30, 2026 and September 30, 2025.

 

 

 

(In Thousands)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Line Item in the Consolidated Statements of Income

 

September 30, 2026

 

 

September 30, 2025

 

 

September 30, 2026

 

 

September 30, 2025

 

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

Loans, including fees

 

$

(242

)

 

$

(12

)

 

$

(686

)

 

$

(57

)

Other

 

 

11

 

 

 

25

 

 

 

53

 

 

 

75

 

Total interest income

 

$

(231

)

 

$

13

 

 

$

(633

)

 

$

18