Interest Rate Swaps

12 Months Ended

Dec. 31, 2023

Interest Rate Swaps [Abstract]

Interest Rate Swaps

NOTE 15 – INTEREST RATE SWAPS

The Company enters into interest rate swaps that allow our commercial loan customers to effectively convert a variable-rate commercial loan agreement to a fixed-rate commercial loan agreement. Under these agreements, the Company enters into a variable-rate loan agreement with a customer in addition to an interest rate swap agreement, which serves to effectively swap the customer’s variable-rate into a fixed-rate. The Company then enters into a corresponding swap agreement with a third party in order to economically hedge its exposure through the customer agreement. The interest rate swaps with both the customers and third parties are not designated as hedges under FASB ASC 815 and are not marked to market through earnings. As the interest rate swaps are structured to offset each other, changes to the underlying benchmark interest rates considered in the valuation of these instruments do not result in an impact to earnings; however, there may be fair value adjustments related to credit quality variations between counterparties, which may impact earnings as required by FASB ASC 820. There was no effect on earnings in any periods presented. At December 31, 2023, based upon the swap contract values, the company pledged cash in the amount of $350,000 as collateral for its interest rate swaps with a third-party financial institution which had a fair value $1,225,000.

Summary information regarding these derivatives is presented below:

(Amounts in thousands)
	Notional Amount, December 31,						Fair Value December 31,
		2023		2022	Interest Rate Paid	Interest Rate Received		2023		2022
Customer interest rate swap
Maturing November, 2030	$	6,145	$	6,513	Term SOFR + Margin	Fixed	$	746	$	889
Maturing December, 2030		4,032		4,297	Term SOFR + Margin	Fixed		479		575
Total	$	10,177	$	10,810			$	1,225	$	1,464
Third party interest rate swap
Maturing November, 2030	$	6,145	$	6,513	Fixed	Term SOFR + Margin	$	746	$	889
Maturing December, 2030		4,032		4,297	Fixed	Term SOFR + Margin		479		575
Total	$	10,177	$	10,810			$	1,225	$	1,464

The following table presents the fair values of derivative instruments in the Consolidated Balance Sheet.

	(Amounts in thousands)
	Assets			Liabilities
	Balance Sheet Location		Fair Value	Balance Sheet Location		Fair Value
December 31, 2023
Interest rate derivatives	Other assets	$	1,225	Other liabilities	$	1,225
December 31, 2022
Interest rate derivatives	Other assets		1,464	Other liabilities	$	1,464