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Derivative Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
Interest Rate Swaps

The Corporation periodically uses interest rate swap agreements to modify interest rate characteristics from variable to fixed or fixed to variable in order to reduce the impact of interest rate changes on future net interest income. The Corporation’s credit exposure on interest rate swaps includes changes in fair value and any collateral that is held by a third party.

In May 2022, the Corporation entered into an interest rate swap classified as a cash flow hedge with a notional amount of $250.0 million to hedge the interest payments received on a pool of variable rate loans. Under the terms of the swap agreement,
the Corporation pays a variable rate equal to the Prime Rate and receives a fixed rate of 5.99%. The swap matures in May 2026. The Corporation performed an assessment of the hedge for effectiveness at the inception of the hedge and performs an assessment on a recurring basis and determined that the derivative currently is and is expected to be highly effective in offsetting changes in cash flows of the hedged item. At March 31, 2024 and December 31, 2023, the notional amount of the interest rate swap was $250.0 million and the fair value was a liability of $8.2 million and $5.8 million, respectively. At March 31, 2024 and December 31, 2023, approximately $4.9 million and $3.7 million, net of tax, which is recorded in accumulated other comprehensive loss, is expected to be reclassified into earnings during the next twelve months, respectively. This amount could differ from amounts actually recognized due to changes in interest rates, hedge de-designations and the addition of other hedges subsequent to March 31, 2024.

Credit Derivatives

The Corporation has agreements with third-party financial institutions whereby the third-party financial institution enters into interest rate derivative contracts with loan customers referred to them by the Corporation. By the terms of the agreements, the third-party financial institution has recourse to the Corporation for any exposure created under each swap contract in the event the customer defaults on the swap agreement and the agreement is in a paying position to the third-party financial institution. These transactions represent credit derivatives and are a customary arrangement that allows the Corporation to provide access to interest rate swap transactions for customers without issuing the swap.

At March 31, 2024, the Corporation had exposure to 136 variable-rate to fixed-rate interest rate swap transactions between the third-party financial institution and customers with a current notional amount of $878.5 million and remaining maturities ranging from 1 month to 11 years. At March 31, 2024, the fair value of the Corporation's interest rate swap credit derivatives was a liability of $120 thousand. At March 31, 2024, the fair value of the swaps to the customers was a net gain of $66.3 million. At March 31, 2024, the Corporation's credit exposure related to customers totaled $739 thousand.

The maximum potential payments by the Corporation to the third-party financial institution under these credit derivatives are not estimable as they are contingent on future interest rates and the agreements do not provide for a limitation of the maximum potential payment amount.

Mortgage Banking Derivatives

Derivative loan commitments represent agreements for delayed delivery of financial instruments in which the buyer agrees to purchase and the seller agrees to deliver, at a specified future date, a specified instrument at a specified price or yield. The Corporation’s derivative loan commitments are commitments to sell loans secured by 1- to 4-family residential properties whose predominant risk characteristic is interest rate risk.

Derivatives Tables

The following table presents the notional amounts and fair values of derivatives designated as hedging instruments recorded on the condensed consolidated balance sheets at March 31, 2024 and December 31, 2023. The Corporation pledges cash or securities to cover the negative fair value of derivative instruments. Cash collateral associated with derivative instruments are not added to or netted against the fair value amounts.
  Derivative AssetsDerivative Liabilities
(Dollars in thousands)Notional
Amount		Balance Sheet
Classification		Fair
Value		Balance Sheet
Classification		Fair
Value
At March 31, 2024
Interest rate swap - cash flow hedge $250,000  $— Other liabilities$8,206 
Total$250,000 $— $8,206 
At December 31, 2023
Interest rate swap - cash flow hedge $250,000  $— Other liabilities$5,779 
Total$250,000 $— $5,779 
The following table presents the notional amounts and fair values of derivatives not designated as hedging instruments recorded on the condensed consolidated balance sheets at March 31, 2024 and December 31, 2023:
  Derivative AssetsDerivative Liabilities
(Dollars in thousands)Notional
Amount		Balance Sheet
Classification		Fair
Value		Balance Sheet
Classification		Fair
Value
At March 31, 2024
Credit derivatives$878,530  $— Other liabilities$120 
Interest rate locks with customers28,963 Other assets511  — 
Forward loan sale commitments42,152  — Other liabilities46 
Total$949,645 $511 $166 
At December 31, 2023
Credit derivatives$862,756 $— Other liabilities$186 
Interest rate locks with customers21,174 Other assets717  — 
Forward loan sale commitments32,811  — Other liabilities427 
Total$916,741 $717 $613 

The following table presents amounts included in the condensed consolidated statements of income for derivatives designated as hedging instruments for the periods indicated:
Statement of Income
Classification		Three Months Ended
March 31,
(Dollars in thousands)20242023
Interest rate swap—cash flow hedge—net interest paymentsInterest expense$1,586 $1,060 
Total net loss$(1,586)$(1,060)

The following table presents amounts included in the condensed consolidated statements of income for derivatives not designated as hedging instruments for the periods indicated:
Statement of Income ClassificationThree Months Ended
March 31,
(Dollars in thousands)20242023
Credit derivativesOther noninterest income$227 $86 
Interest rate locks with customersNet (loss) gain on mortgage banking activities(206)146 
Forward loan sale commitmentsNet gain (loss) on mortgage banking activities381 (34)
Total net gain$402 $198 

The following table presents amounts included in accumulated other comprehensive (loss) income for derivatives designated as hedging instruments at March 31, 2024 and December 31, 2023:
(Dollars in thousands)Accumulated Other
Comprehensive (Loss) Income		At March 31, 2024At December 31, 2023
Interest rate swap—cash flow hedgeFair value, net of taxes$(6,483)$(4,566)
Total$(6,483)$(4,566)