DERIVATIVES

12 Months Ended

Dec. 31, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

DERIVATIVES

16.  DERIVATIVES

The Company utilizes interest rate swap agreements as part of its asset liability management strategy to help manage its interest rate risk position.  The notional amount of the interest rate swaps does not represent amounts 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.

Interest Rate Swap Designated as Cash Flow Hedge:   Interest rate swaps with a notional amount of $230.0 million and $180.0 million at December 31, 2018 and 2017, respectively, were designated as a cash flow hedge of certain interest-bearing demand brokered deposits and were determined to be fully effective during 2018 and 2017. As such, no amount of ineffectiveness has been included in net income. Therefore, the aggregate fair value of these swaps is recorded in other assets/liabilities with changes in fair value recorded in other comprehensive income. The amount included in accumulated other comprehensive income would be reclassified to current earnings should the hedges no longer be considered effective.  The Company expects the hedges to remain fully effective during the remaining terms of the swaps.

Information about the interest rate swaps designated as cash flow hedges as of December 31, 2018 and 2017 is presented in the following table:

(Dollars in thousands)	2018			2017
Notional amount	$	230,000		$	180,000
Weighted average pay rate		2.04	%		1.64	%
Weighted average receive rate		2.33	%		1.33	%
Weighted average maturity	2.65 years			2.25 years
Unrealized gain/(loss), net	$	808		$	1,394
Number of contracts		11			9

Net interest income/(expense) recorded on these swap transactions totaled approximately $390 thousand and ($898) thousand for the twelve months ended December 31, 2018 and 2017, respectively, and is reported as a component of interest expense.

Cash Flow Hedges

The following table presents the net gains/(losses) recorded in accumulated other comprehensive income and the consolidated financial statements relating to the cash flow derivative instruments for the year ended December 31:

2018
							Amount of
	Amount of			Amount of			Gain/(Loss)
	Gain/(Loss)			Gain/(Loss)			Recognized in
	Recognized			Reclassified			Other Non- Interest
	In OCI			From OCI to			Expense
(In thousands)	(Effective Portion)			Interest Expense			(Ineffective Portion)
Interest rate contracts	$	(328	)	$	(124	)	$	—

2017
					Amount of
	Amount of		Amount of		Gain/(Loss)
	Gain/(Loss)		Gain/(Loss)		Recognized in
	Recognized		Reclassified		Other Non- Interest
	In OCI		From OCI to		Expense
(In thousands)	(Effective Portion)		Interest Expense		(Ineffective Portion)
Interest rate contracts	$	2,138	$	—	$	—

During the first quarter of 2018, the Company recognized an unrealized after-tax gain of $220 thousand in accumulated other comprehensive income/(loss) related to the termination of two interest rate swaps designated as cash flow hedges.  The gain will be amortized into earnings over the remaining life of the terminated swaps.  The Company recognized pre-tax interest income of $124 thousand for the year ended December 31, 2018 related to the amortization of the gain on the terminated interest rate swaps designated as cash flow hedges.  

The following tables reflect the cash flow hedges included in the financial statements as of December 31, 2018 and 2017:

	December 31, 2018
	Notional		Fair
(In thousands)	Amount		Value
Interest rate swaps related to interest-bearing    demand brokered deposits	$	230,000	$	808
Total included in other assets		130,000		1,657
Total included in other liabilities		100,000		(849	)

	December 31, 2017
	Notional		Fair
(In thousands)	Amount		Value
Interest rate swaps related to interest-bearing    demand brokered deposits	$	180,000	$	1,394

Derivatives Not Designated as Accounting Hedges:  The Company offers facility specific/loan level swaps to its customers and offset its exposure from such contracts by entering into mirror image swaps with a financial institution/swap counterparty (loan level / back to back swap program).  The customer accommodations and any offsetting swaps are treated as non-hedging derivative instruments which do not qualify for hedge accounting (“standalone derivatives”).  The notional amount of the swaps does not represent amounts exchanged by the parties.  The amount exchanged is determined by reference to the notional amount and other terms of the individual contracts.  The fair value of the swaps is recorded as both an asset and a liability, in other assets and other liabilities, respectively, in equal amounts for these transactions.

Information about these swaps is as follows:

(Dollars in thousands)	December 31, 2018			December 31, 2017
Notional amount	$	558,690		$	317,363
Fair value	$	9,689		$	3,131
Weighted average pay rates		4.44	%		4.11	%
Weighted average receive rates		4.24	%		3.43	%
Weighted average maturity	7.1 years			7.6 years
Number of contracts		67			42