Hedge Accounting

12 Months Ended

Dec. 31, 2022

NOTE 19 – HEDGE ACCOUNTING

As of December 31, 2022 and 2021, the Company held interest rate derivatives in the total notional amount $51.0 million.

The derivatives are recorded on the balance sheet at fair value and are included in the following line items:


	Asset Derivatives
	December 31,
	2022			2021
(Dollars in thousands)	Balance sheet location	Fair value		Balance sheet location	Fair value
Interest rate contracts	Derivative financial instruments - current portion	$	907	Derivative financial instruments - current portion	$	96
	Derivative financial instruments - non-current portion		—	Derivative financial instruments - non-current portion		112
Total derivatives designated as hedging instruments		$	907		$	208
Total derivatives		$	907		$	208

	Liability Derivatives
	December 31,
	2022			2021
(Dollars in thousands)	Balance sheet location	Fair value		Balance sheet location	Fair value
Interest rate contracts	Derivative financial instruments - current portion	$	—	Derivative financial instruments - current portion	$	181
	Derivative financial instruments - non-current portion		—	Derivative financial instruments - non-current portion		—
Total derivatives designated as hedging instruments		$	—		$	181
Total derivatives		$	—		$	181

The changes in fair value are recorded in Other Comprehensive Income and released into interest expense in the same period(s) in which the hedged transactions affect earnings. In 2022 and 2021, the derivative instruments affected Comprehensive Income as follows:


(Dollars in thousands)	Location of Loss Recognized in Income on Derivatives	Amount of Loss Recognized in Income on Derivatives
			2022		2021
Interest rate contracts	Interest expense, net	$	(672)	$	253
Total		$	(672)	$	253


	Loss Recognized in OCI on Derivatives (Effective Portion)				Loss Reclassified from OCI into Income (Effective Portion)					Loss Recognized in Income on Derivatives (Ineffective Portion and Amount Excluded from Effectiveness Testing)
(Dollars in thousands)	Amount				Line Item	Amount				Line Item	Amount
	2022		2021			2022		2021			2022		2021
Interest rate contracts	$	(1,520)	$	(153)	Interest expense, net	$	672	$	(253)	Interest expense, net	$	—	$	—
Total	$	(1,520)	$	(153)		$	672	$	(253)		$	—	$	—

In 2023, the Company expects to release $822,000 to earnings.