Derivatives and Hedging	6 Months Ended
Derivatives and Hedging	Jun. 30, 2023
Derivatives and Hedging [Abstract]
Derivatives and Hedging	Note 6: Derivatives and Hedging The Company is exposed to certain risks arising from both its business operations and economic conditions, including interest rate, liquidity, and credit risk. The Company uses derivative financial instruments as part of its risk management activities to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Cash Flow Hedges of Interest Rate Risk The Company uses interest rate derivatives to add stability to interest income and expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps and collars as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate collars designated as cash flow hedges involve payments of variable-rate amounts if interest rates rise above the cap strike rate on the contract and the receipt of variable-rate amounts if interest rates fall below the floor strike rate on the contract. During 2023, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt and loan assets. Previously, five swaps that were entered into in 2021 were terminated during the third quarter of 2022, however, the amortization of the gains on these instruments will start in 2023 based on the original effective dates of these swaps. Derivatives designated and that qualify as cash flow hedges include five instruments with a notional amount of $ 340 million and one instrument with a notional amount of $ 250 million at June 30, 2023 and December 31, 2022, respectively. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income (Loss) (“AOCI”) and subsequently reclassified into interest income or expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest income and expense as interest payments are received and made on the Company’s variable-rate assets and debt. The Company currently estimates that $ 1.5 million will be reclassified as a decrease to net interest income during the next twelve months. The Company is hedging its exposure to the variability in future cash flows for forecasted transactions over a maximum period of 5.9 years. Non-designated Hedges Derivatives not designated as hedges are not speculative and result from a service provided to clients. The Company executes interest rate swaps with customers to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third-party, such that the Company minimizes its net risk exposure resulting from such transactions. Interest rate derivatives associated with this program do not meet the strict hedge accounting requirements and changes in the fair value of both the customer derivatives and the offsetting derivatives are recognized directly in earnings. Swap fees earned upon origination and credit valuation adjustments that represent the risk of a counterparty’s default are reported on the statements of operations as swap fee income, net. The effect of the Company’s derivative financial instruments gain (loss) is reported on the statements of cash flows within “other assets” and “other liabilities”. These 48 and 49 swaps had an aggregate notional amount of $ 378 million and $ 421 million at June 30, 2023 and December 31, 2022, respectively. Fair Values of Derivative Instruments on the Statements of Financial Condition The table below presents the fair value of the Company’s derivative financial instruments and their classification on the Statements of Financial Condition as of June 30, 2023 and December 31, 2022: Asset Derivatives Liability Derivatives Statement of Financial Condition June 30, December 31, Statement of Financial Condition June 30, December 31, Location 2023 2022 Location 2023 2022 (Dollars in thousands) Interest rate products: Derivatives designated as hedging instruments Other assets and Interest receivable $ 211 $ - Interest payable and other liabilities $ 7,726 $ 5,403 Derivatives not designated as hedging instruments Other assets and Interest receivable 10,415 11,038 Interest payable and other liabilities 10,415 11,039 Total $ 10,626 $ 11,038 $ 18,141 $ 16,442 Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Earnings Gain or (Loss) Recognized in OCI on Derivative Gain or (Loss) Recognized in OCI Included Component Gain or (Loss) Recognized in OCI Excluded Component Gain or (Loss) Reclassified from Accumulated OCI into Earnings Gain or (Loss) Reclassified from Accumulated OCI into Earnings Included Component Gain or (Loss) Reclassified from Accumulated OCI into Earnings Excluded Component (Dollars in thousands) For the Three Months Ended June 30, 2023 Derivatives in Cash Flow Hedging Relationships: Interest Rate Products Interest Income $ (3,839) $ (3,839) $ - $ - $ - $ - Interest Rate Products Interest Expense 207 207 - 9 9 - Total $ (3,632) $ (3,632) $ - $ 9 $ 9 $ - For the Three Months Ended June 30, 2022 Derivatives in Cash Flow Hedging Relationships: Interest Rate Products Interest Expense 1,385 1,385 - - - - Total $ 1,385 $ 1,385 $ - $ - $ - $ - The table below presents the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income (Loss) for the three- and six-months ended June 30, 2023 and 2022. As of June 30, 2023 and December 31, 2022, the Company had minimum collateral thresholds with certain of its derivative counterparties and has received collateral of $ 2.8 million and $ 4.9 million, respectively. Location of Gain or (Loss) Recognized from Accumulated Other Comprehensive Income into Earnings Gain or (Loss) Recognized in OCI on Derivative Gain or (Loss) Recognized in OCI Included Component Gain or (Loss) Recognized in OCI Excluded Component Gain or (Loss) Reclassified from Accumulated OCI into Earnings Gain or (Loss) Reclassified from Accumulated OCI into Earnings Included Component Gain or (Loss) Reclassified from Accumulated OCI into Earnings Excluded Component (Dollars in thousands) For the Six Months Ended June 30, 2023 Derivatives in Cash Flow Hedging Relationships: Interest Rate Products Interest Income $ (2,299) $ (2,299) $ - $ - $ - $ - Interest Rate Products Interest Expense 207 207 - 9 9 - Total $ (2,092) $ (2,092) $ - $ 9 $ 9 $ - For the Six Months Ended June 30, 2022 Derivatives in Cash Flow Hedging Relationships: Interest Rate Products Interest Expense 4,040 4,040 - - - - Total $ 4,040 $ 4,040 $ - $ - $ - $ -