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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments DERIVATIVE FINANCIAL INSTRUMENTS
The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s interest-bearing deposits.
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Beginning in 2020, such derivatives were used to hedge the variable cash flows associated with interest-bearing deposits.
For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate interest-bearing deposits. The Company estimates that an additional $583,000 will be reclassified as a decrease in interest expense during 2022.
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet.
Derivative Assets
As of December 31, 2021As of As of December 31, 2020
(Dollars in thousands)Notional
Amount		Balance
Sheet Location		Fair Value
Total		Notional
Amount		Balance
Sheet Location		Fair Value
Total
Derivatives designated as hedging instruments:
Interest rate swaps$200,000 Other Assets$6,164 $200,000 Other Assets$816 
The table below presents the effect of fair value and cash flow hedge accounting on Accumulated Other Comprehensive Income:
Amount of
Gain or (Loss)
Recognized
in OCI on
Derivative, net of tax		Amount of
Gain or (Loss)
Recognized in
OCI Included
Component, net of tax		Location of
Gain or (Loss)
Recognized from
AOCI into
Income		Amount of
Gain or (Loss)
Reclassified
from AOCI
into Income		Amount of
Gain or (Loss)
Reclassified
from AOCI
into Income
Included
Component
(Dollars in thousands)
Year Ended December 31, 2021
Derivatives in cash flow hedging relationships:
Interest rate swaps$4,066 $4,066 Interest Expense$93 $93 
Year Ended December 31, 2020
Derivatives in cash flow hedging relationships:
Interest rate swaps$623 $623 Interest Expense$34 $34 
The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, then the Company could also be declared in default on its derivative obligations.
The Company has agreements with certain of its derivative counterparties that contain a provision where if the company fails to maintain its status as a well capitalized institution, then the Company could be required to post additional collateral.
As of December 31, 2021, the fair value of derivatives in a net liability position, which includes accrued interest, related to these agreements was $0. As of December 31, 2021, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at December 31, 2021, it could have been required to settle its obligations under the agreements at their termination value of $6,157,000.