Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Balance Sheet Related to Cumulative Basis Adjustment for Fair Value Hedges

As of September 30, 2024 and December 31, 2023, the following amounts were recorded on the balance sheet related to cumulative basis adjustment for fair value hedges:

Location in Consolidated Balance Sheets	Carrying Amount of Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets/(Liabilities)
(Dollars in thousands)	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Securities available-for-sale, at fair value	$	10,178	$	10,126	$	178	$	126
Total loans		50,788		50,632		788		632
Total	$	60,966	$	60,758	$	966	$	758

Summary of Fair Values of Derivative Financial Instruments Classification on Consolidated Balance Sheets

The following table presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets:

	Derivative Assets					Derivative Liabilities
	Notional Amount		Location	Fair Value		Notional Amount		Location	Fair Value
(Dollars in thousands)
September 30, 2024
Derivatives designated as hedging instruments:
Interest rate contracts - fair value hedge	$	60,000	Other assets	$	—	$	—	Other liabilities	$	966
Interest rate contracts - cash flow hedge		10,000	Other assets		—		—	Other liabilities		152
Total derivatives designated as hedging instruments	$	70,000		$	—	$	—		$	1,118
Total derivatives designated as hedging instruments:
Derivatives not designated as hedging instruments:
Customer loan swaps	$	4,665	Other assets	$	143	$	4,665	Other liabilities	$	143
Total derivatives not designated as hedging instruments				$	143				$	143
December 31, 2023
Derivatives designated as hedging instruments:
Interest rate contracts - fair value hedge	$	60,000	Other assets	$	—	$	—	Other liabilities	$	758
Total derivatives designated as hedging instruments
Derivatives not designated as hedging instruments:
Customer loan swaps	$	4,766	Other assets	$	90	$	4,766	Other liabilities	$	90
Total derivatives not designated as hedging instruments				$	90				$	90

Summary of Derivative Financial Instruments Not Designated as Hedging Instruments on Consolidated Statements of Income (Loss)

The following table presents the effect of the Company’s derivative financial instruments that are not designated as hedging instruments on the consolidated statements of income (loss) for the periods presented:

		Amount of (Loss) Gain Recognized in Income (Loss)
		Three Months Ended					Nine Months Ended
		September 30, 2024		September 30, 2023			September 30, 2024		September 30, 2023
(Dollars in thousands)	Location of Gain
Customer loan swaps	Interest and fees on loans	$	—	$	(12	)	$	—	$	83

Summary of Derivative Positions Offset in Consolidated Balance Sheets

The following tables present the information about derivative positions that are eligible for offset in the consolidated balance sheets as of September 30, 2024 and December 31, 2023:

							Gross Amounts Not Offset
(Dollars in thousands)	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Recognized		Financial Instruments Pledged (Received)		Cash Collateral Pledged (Received) (1)		Net Amount
September 30, 2024
Derivative Assets:
Interest rate contracts - fair value hedges (2)	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate contracts - cash flow hedge (2)		—		—		—		—		—		—
Customer loan swaps - commercial customer (3)		143		—		143		—		143		—
Total	$	143	$	—	$	143	$	—	$	143	$	—
Derivative Liabilities:
Interest rate contracts - fair value hedges (2)	$	966	$	—	$	966	$	—	$	966	$	—
Interest rate contracts - cash flow hedge (2)		152		—		152		—		152		—
Customer loan swaps - dealer bank (3)		143		—		143		—		—		143
Total	$	1,261	$	—	$	1,261	$	—	$	1,118	$	143
December 31, 2023
Derivative Assets:
Interest rate contracts - fair values hedges (2)	$	—	$	—	$	—	$	—	$	—	$	—
Customer loan swaps - dealer bank (3)		90		—		90		—		—		90
Total	$	90	$	—	$	90	$	—	$	—	$	90
Derivative Liabilities:
Interest rate contracts - fair value hedges (2)	$	758	$	—	$	758	$	—	$	758	$	—
Customer loan swaps - commercial customer (3)		90		—		90		—		—		90
Total	$	848	$	—	$	848	$	—	$	758	$	90

(1) The amount presented was the lesser of the amount pledged (received) or the net amount presented in the consolidated balance sheets.

(2) Interest rate swap contracts were completed with the same dealer bank. The Company maintains a master netting arrangement with the counterparty and settles collateral on a net basis for all contracts.

(3) The Company manages its net exposure on its commercial customer loan swaps by obtaining collateral as part of the normal loan policy and underwriting practices. The Company does not post collateral to its commercial customers as part of its contract.