DERIVATIVES

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVESThe Company enters into interest rate swaps to facilitate customer transactions and meet their financing needs. These swaps qualify as derivatives, but are not designated as hedging instruments. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or customer owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument contract is negative, the Company owes the customer or counterparty and therefore, has no credit risk. The swap positions are offset to minimize the potential impact on the Company’s financial statements. Credit risk exists if the borrower’s collateral or financial condition indicates that the underlying collateral or financial condition of the borrower makes it probable that amounts due will be uncollectible. Any amounts due to the Company will be expected to be collected from the borrower. Management reviews this credit exposure on a quarterly basis. At December 31, 2021 and 2020, all loans associated with the swap agreements were determined to be “pass” rated credits as provided by regulatory guidance and therefore no component of credit loss was factored into the valuation of the swaps.

A summary of the Company’s interest rate swaps at December 31 for the years indicated is included in the following table:

	2021
(Dollars in thousands)	Notional Amount		Estimated Fair Value		Years to Maturity	Receive Rate		Pay Rate
Interest rate swap agreements:
Pay fixed/receive variable swaps	$	198,126	$	(5,880)	8.7 years	2.21	%	3.73	%
Pay variable/receive fixed swaps	198,126		5,880		8.7 years	3.73	%	2.21	%
Total swaps	$	396,252	$	—	8.7 years	2.97	%	2.97	%

	2020
(Dollars in thousands)	Notional Amount		Estimated Fair Value		Years to Maturity	Receive Rate		Pay Rate
Interest rate swap agreements:
Pay fixed/receive variable swaps	$	160,261	$	(9,183)	8.7 years	2.39	%	3.72	%
Pay variable/receive fixed swaps	160,261		9,183		8.7 years	3.72	%	2.39	%
Total swaps	$	320,522	$	—	8.7 years	3.06	%	3.06	%

The estimated fair value of the swaps at December 31 for the periods indicated in the table above were recorded in other assets and other liabilities in the Consolidated Statements of Financial Condition. The associated net gains and losses on the swaps are recorded in other non-interest income in the Consolidated Statement of Income.