Derivatives

3 Months Ended

Mar. 31, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

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.

Cash Flow Hedges

The Company periodically enters into contracts 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 the fourth quarter of 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 three months ended March 31, 2026, the Company recognized $1.3 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.

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 during the three months ended March 31, 2026. For the three months ended March 31, 2025, the Company recognized through Other comprehensive income net losses of $0.4 million, and reclassified net gains of $2 thousand out of AOCI 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 three months ended March 31, 2026 and 2025, the Company recognized losses of $0.1 million and gains of $48 thousand, respectively, through interest income.

Economic Hedges

The Company enters into commitments to originate mortgage loans for 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 three months ended March 31, 2026, the Company recognized gains of $0.2 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
March 31, 2026
Interest rate contracts1	$	1,143,202	$	21,106	Other assets and Other liabilities
Residential mortgage fair value hedges	100,000		41		Other liabilities
Residential mortgage fair value hedges	250,000		421		Other assets
Interest rate caps cash flow hedges	300,000		4,243		Other assets
IRLC	14,974		497		Other assets
Forward TBA mortgage-backed securities	15,273		269		Other assets
Forward loan sale commitment	3,349		42		Other liabilities
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
1Interest rate contracts include risk participation agreements with notional amounts of $65.1 million and $65.3 million at March 31, 2026, and December 31, 2025, 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				Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged items
(In thousands)	March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025
Loans, net 1	$	1,014,248	$	1,043,345	$	(339)	$	559
1 These 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 March 31, 2026, the portfolio layer method was $350 million, of which $350 million was designated as hedged. At December 31, 2025, the portfolio layer method was $400 million, of which $400 million was designated as hedged.