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DERIVATIVES
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES DERIVATIVES
The Company periodically enters into interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.
Cash Flow Hedges: In 2023, the Company executed an interest rate swap with a notional amount that was designated as a cash flow hedge of certain Federal Home Loan Bank borrowings. The swap hedges the benchmark index (SOFR) with a receive float/pay fixed swap for the period March 21, 2023 through April 1, 2026. The notional amount of the interest rate swap as of December 31, 2025 and 2024 was $50.0 million. As of December 31, 2025 and 2024, this hedge was determined to be effective, and the Company expects the hedge to remain effective during the remaining terms of the swap.
In 2025, the Company executed interest rate swaps with notional amounts that were designated as cash flow hedges of certain variable rate interest-bearing deposits. The swaps hedge the benchmark index (Federal funds) with a receive float/pay fixed swap with various maturities over a four-year period and total notional amount of $200.0 million as of December 31, 2025. As of December 31, 2025, these hedges were determined to be effective, and the Company expects the hedge to remain effective during the remaining terms of the contracts.
Fair Value Hedges: In 2025, the Company entered into interest rate swaps with notional amounts that were designated as fair value hedges of closed pools of fixed-rate loans. The instruments are designated as fair value hedges as the changes in the fair value of the interest rate swap are expected to offset changes in the fair value of the hedged item. The swap hedges the benchmark index (Federal funds) with a receive float/pay fixed swap with various maturities over a five-year period and total notional amount of $200.0 million as of December 31, 2025. As of December 31, 2025, this hedge was determined to be effective, and the Company expects the hedge to remain effective during the remaining terms of the contracts.
Derivatives Not Designated as Hedges: The Company periodically enters into interest rate swaps to offset interest rate exposure with its commercial variable rate loan clients. Clients with variable rate loans may choose to enter into an interest rate swap to hedge the interest rate risk on the loan and effectively pay a fixed rate payment. The Company will simultaneously enter into an interest rate swap on the same underlying loan and notional amount to hedge risk on the fixed rate loan. The notional amount of interest rate swaps with its loan customers as of December 31, 2025 and 2024, was $70.7 million and $70.4 million, respectively. While these derivatives represent economic hedges, they do not qualify as hedges for accounting purposes.
The Company presents derivative position gross on the balance sheet. The following table reflects the fair value of derivatives recorded on the Consolidated Balance Sheets as of the dates noted:
December 31, 2025December 31, 2024
(dollars in thousands)Notional AmountFair ValueNotional AmountFair Value
Included in other assets:
Derivatives designated as hedges:
Interest rate swaps – cash flow hedge$— $— $50,000 $129 
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans70,703 952 70,353 931 
Total included in other assets$952 $1,060 
Included in other liabilities:
Derivatives designated as hedges:
Interest rate swaps – cash flow hedge$250,000 $777 $— $— 
Interest rate swaps – fair value hedge200,000 719 — — 
Derivatives not designated as hedging instruments:
Interest rate swaps related to customer loans70,703 976 70,353 956 
Total included in other liabilities$2,472 $956 
The effect of cash flow hedge accounting on accumulated other comprehensive income were as follows:
December 31, 2025December 31, 2024
(dollars in thousands)Location of Gain (Loss) Reclassified from OCI into IncomeAmount of Gain (Loss) Recognized in OCI on DerivativeAmount of Gain (Loss) Reclassified from OCI into IncomeAmount of Gain (Loss) Recognized in OCI on DerivativeAmount of Gain (Loss) Reclassified from OCI into Income
Interest rate swap - FHLB borrowingsInterest expense - Other borrowed funds$74 $199 $699 $660 
Interest rate swaps - Variable rate depositsInterest expense - Deposits50 625 — — 
$124 $824 $699 $660 
The following amounts were recorded on the Consolidated Balance Sheets related to cumulative basis adjustments for fair value hedges for the respective period (dollars in thousands):
December 31, 2025
Condensed consolidated balance sheet line item
Amortized cost of the Hedged AssetsAmortized Cost of Fair Value Hedging Included in the Carrying Amount of the Hedged Assets
Loans$435,032 $939 
The effects of the fair value hedge relationships on the Consolidated Statements of Income were as follows:
(dollars in thousands)Location of Gain (Loss)December 31, 2025December 31, 2024
Interest rate swapInterest income - Loans$(118)$— 
LoansInterest income - Loans939 — 
The effect of derivatives not designated as hedging instruments recorded in Other non-interest income on the Consolidated Statements of Income for the years ended December 31, 2025 and 2024 was immaterial.