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Derivatives
 6 Months Ended
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block] Derivatives
Park uses certain derivative financial instruments (or "derivatives") to meet the needs of its clients while managing the interest rate risk associated with certain transactions. Park does not use derivatives for speculative purposes. A summary of derivative financial instruments utilized by Park follows.

Interest Rate Swaps
Park utilizes interest rate swap agreements as part of its asset-liability management strategy to help manage its interest rate risk position and as a means to meet the financing, interest rate and other risk management needs of qualifying commercial banking customers. The notional amount of the interest rate swaps does not represent the amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

Borrowing Derivatives: At June 30, 2022, Park had no borrowing derivatives. Interest rate swaps with notional amounts totaling $25.0 million at December 31, 2021 were designated as cash flow hedges of certain FHLB advances.

Loan Derivatives: In conjunction with the Carolina Alliance acquisition, Park acquired interest rate swaps related to certain commercial loans. Simultaneously with borrowers entering into interest rate swaps, Carolina Alliance entered into offsetting interest rate swaps executed with a third party, such that Carolina Alliance minimized its net interest rate risk exposure resulting from such transactions. These interest rate swaps had a notional amount totaling $26.8 million and $29.7 million at June 30, 2022 and December 31, 2021, respectively.

All of the Company's interest rate swaps were determined to be fully effective during each of the three-month and six-month periods ended June 30, 2022 and June 30, 2021. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of the swaps is recorded in other assets and other liabilities with changes in fair value recorded in other comprehensive (loss) income. The amount included in accumulated other comprehensive (loss) income would be reclassified to current earnings should the hedges no longer be considered effective. During the three-month and six-month periods ended June 30, 2022, Park recognized expense of $66,000 as the result of the early termination of a borrowing interest rate swap. Park expects the outstanding hedges to remain fully effective during the remaining respective terms of the swaps.
Summary information about Park's interest rate swaps as of June 30, 2022 and December 31, 2021 follows:

June 30, 2022December 31, 2021
(In thousands, except weighted average data)Borrowing DerivativesLoan DerivativesBorrowing DerivativesLoan Derivatives
Notional amounts$— $26,823 $25,000 $29,651 
Weighted average pay rates— %4.647 %2.595 %4.668 %
Weighted average receive rates— %4.647 %0.124 %4.668 %
Weighted average maturity (years)0.08.60.58.2
Unrealized losses$— $— $262 $— 

Interest expense recorded on swap transactions was $23,000 and $152,000 for the three-month periods ended June 30, 2022 and 2021, respectively, and was $171,000 and $300,000 for the six-month periods ended June 30, 2022 and 2021, respectively.

Interest Rate Swaps
The following table presents the net gains, net of income taxes, recorded in OCI and the Consolidated Condensed Statements of Income related to interest rate swaps for the three-month and six-month periods ended June 30, 2022 and 2021:

Three Months Ended
June 30, 2022
(In thousands)Amount of Net Gain Recognized in OCI (Effective Portion)Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Expense Recognized in Miscellaneous Expense
Interest rate swaps$15 $— $52 

Three Months Ended
June 30, 2021
(In thousands)Amount of Net Gain Recognized in OCI (Effective Portion)Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Expense Recognized in Miscellaneous Expense
Interest rate swaps$113 $— $— 

Six Months Ended
June 30, 2022
(In thousands)Amount of Net Gain Recognized in OCI (Effective Portion)Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Expense Recognized in Miscellaneous Expense
Interest rate swaps$154 $— $52 

Six Months Ended
June 30, 2021
(In thousands)Amount of Net Gain Recognized in OCI (Effective Portion)Amount of Gain (Loss) Reclassified from OCI to Interest IncomeAmount of Expense Recognized in Miscellaneous Expense
Interest rate swaps$238 $— $— 
The following tables reflect the interest rate swaps included in the Consolidated Condensed Balance Sheets as of June 30, 2022 and December 31, 2021.

(In thousands)June 30, 2022December 31, 2021
Notional AmountFair ValueNotional AmountFair Value
Included in other assets:
Borrowing derivatives - interest rate swaps related to FHLB advances$— $— $— $— 
Loan derivatives - instruments associated with loans
 Matched interest rate swaps with borrower 7,290 129 29,651 1,952 
 Matched interest rate swaps with counterparty19,533 720 — — 
   Total included in other assets$26,823 $849 $29,651 $1,952 
Included in other liabilities:
Borrowing derivatives - interest rate swaps related to FHLB advances$— $— $25,000 $(262)
Loan derivatives - instruments associated with loans
 Matched interest rate swaps with borrower 19,533 (720)— — 
 Matched interest rate swaps with counterparty7,290 (129)29,651 (1,952)
    Total included in other liabilities$26,823 $(849)$54,651 $(2,214)

Mortgage Banking Derivatives
Commitments to fund mortgage loans (interest rate locks) to be sold into the secondary market and forward commitments for the future delivery of these mortgage loans are accounted for as free standing derivatives. In order to hedge the change in interest rates resulting from its commitments to fund the loans, the Company enters into forward commitments for the future delivery of mortgage loans when interest rate locks are entered into. These mortgage banking derivatives are not designated as hedge relationships. The fair value of an interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. Fair values of these mortgage banking derivatives are estimated based on changes in mortgage interest rates from the date the interest on the loan is locked. Changes in the fair values of these derivatives are included in "Other service income" in the Condensed Consolidated Statements of Income.

At June 30, 2022 and December 31, 2021, Park had $5.8 million and $13.3 million, respectively, of interest rate lock commitments. The fair value of these mortgage banking derivatives was reflected by a derivative asset of $0.1 million and $0.3 million at June 30, 2022 and December 31, 2021, respectively.

Other Derivatives
In connection with the sale of Park’s Class B Visa shares during 2009, Park entered into a swap agreement with the purchaser of the shares. The swap agreement adjusts for dilution in the conversion ratio of Class B Visa shares resulting from certain Visa litigation. At June 30, 2022 and December 31, 2021, the fair value of the swap liability of $447,000 and $226,000, respectively, was an estimate of the exposure based upon probability-weighted potential Visa litigation losses.