Derivatives

12 Months Ended

Dec. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Note 6 – Derivatives

Interest Rate Contracts

The Company offers interest rate swaps when requested by customers to allow them to hedge the risk of rising interest rates on their variable rate loans. Upon entering into these swaps, the Company enters into offsetting positions with counterparties in order to minimize the interest rate risk. These back-to-back swaps are freestanding financial derivatives with the fair values reported in Other assets and Other liabilities. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under the arrangements for financial statement presentation purposes. Gains and losses on these back-to-back swaps, which offset, are recorded through Noninterest income.

Interest Rate Cap Designated as Cash Flow Hedges

The Company has entered into interest rate caps to mitigate exposure to the variability of future cash flows due to changes in interest rates on certain segments of its variable-rate loans. During 2025, the Company entered into three interest rate caps, each with a notional amount of $100.0 million, maturing in November 2030 and December 2030. The Company considers these derivatives to be highly effective at achieving offsetting changes in cash flows attributable to changes in interest rates and has designated them as cash flow hedges. Therefore, changes in the fair value of these derivative instruments are recognized in Other comprehensive income. Amortization of the premium paid on cash flow hedges is recognized in earnings over the term of the hedge in the same caption as the hedged item. For the year ended December 31, 2025, the Company recognized $0.3 million through Other comprehensive income, and reclassified $0.1 million out of AOCI and into Interest Income. Over the next twelve months the Company expects to reclassify $0.6 million from AOCI into Interest Income related to these agreements.

Interest Rate Swaps Designated as Fair Value Hedges

The Company periodically enters into interest rate swap contracts to hedge the risk of changes in fair value of the AFS securities portfolio due to changes in SOFR. The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in other comprehensive income. These derivative instruments are primarily for risk management purposes. There were no securities fair value hedges at December 31, 2025. For the year ended December 31, 2025, the Company recognized, through other comprehensive income, net losses of $0.4 million, and reclassified net losses of $0.5 million out of accumulated other comprehensive income into interest income. For the year ended December 31, 2024, the Company recognized net losses through other comprehensive income of $2.7 million and reclassified net gains of $0.4 million out of accumulated other comprehensive income into interest income.

The Company has entered into interest rate swap contracts to hedge the risk of changes in the fair value of a pool of residential mortgages due to changes in SOFR. These fair value hedges utilize the portfolio layer method. The Company considers these derivatives to be highly effective at offsetting changes in interest rates and assesses the effectiveness on a quarterly basis. The effect of changes in interest rates on the fair value of these derivative contracts is recognized in interest income. These derivative instruments are primarily for risk management purposes. For the years ended December 31, 2025 and December 31, 2024, the Company recognized gains through interest income of $0.9 million and $2.3 million, respectively.

Interest Rate Lock Commitment, Forward TBA Mortgage-Backed Securities, and Forward Loan Sale Commitment

The Company enters into commitments to originate mortgage loans in which the interest rate on the loan is determined prior to funding IRLCs, forward loan sale commitments for the future delivery of these mortgage loans for sale on the secondary market, and forward TBA mortgage-backed securities, which are classified as freestanding derivatives. For the year ended December 31, 2025, the Company recognized a loss of $0.1 million in Mortgage banking income in the Consolidated Statements of Income, related to these non-hedging derivative financial instruments.

(In thousands)	Notional Amount		Fair Value		Balance Sheet Category
December 31, 2025
Interest rate contracts1	$	1,152,442	$	25,009	Other assets and Other liabilities
Residential mortgage fair value hedges	400,000		380		Other liabilities
Interest rate caps cash flow hedges	300,000		3,064		Other assets
IRLC	5,106		495		Other assets
Forward TBA mortgage-backed securities	5,122		94		Other liabilities
Forward loan sale commitment	285		51		Other assets
December 31, 2024
Interest rate contracts1	$	910,640	$	28,184	Other assets and Other liabilities
Securities fair value hedges	400,000		436		Other assets
Residential mortgage fair value hedges	400,000		121		Other assets and Other liabilities
1Interest rate contracts include risk participation agreements with notional amounts of $65.3 million and $28.9 million at December 31, 2025, and December 31, 2024, respectively with nominal fair value in both periods.

The following table presents amounts recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges.

	Carrying amount of the hedged items at December 31,				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items at December 31,
(In thousands)	2025		2024		2025		2024
Securities AFS1	$	—	$	460,126	$	—	$	35
Loans, net2	1,043,345		596,632		559		283
1At December 31, 2024, the amortized cost basis and unallocated basis adjustments used in hedging relationships was $553.8 million. Refer to "Note 3 - Securities" for a reconciliation of the amortized cost and fair value of AFS securities.
2These amounts represent the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At each of December 31, 2025 and December 31, 2024, the portfolio layer method was $400 million, of which $400 million was designated as hedged.