Derivatives (Notes)

9 Months Ended

Sep. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative [Text Block]

Derivatives

The Company uses interest rate swap agreements to manage the interest rate risk related to the variability in interest payments due to changes in interest rates. The Company entered into two forward-starting interest rate swap transactions to effectively convert variable rate debt instruments to fixed rate instruments. These two swap transactions are designated as cash flow hedges of the changes in LIBOR, the benchmark interest rate being hedged, associated with the interest payments on $50,000 of debt instruments. In January 2018, the Company entered into an interest rate swap agreement that effectively converts certain customer deposits with variable rates based on the federal funds upper target rate to fixed rate instruments. This swap transaction has a notional amount of $60,000 with a forward-starting date in December 2018 and is designated as a cash flow hedge of the risk of changes in total cash flows paid on certain customer deposits. The Company is exposed to credit risk in the event of nonperformance by counterparties to the interest rate swaps, which is minimized by collateral-pledging provisions in the agreements. Derivative contracts are executed with a Credit Support Annex, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties should either party suffer a credit rating deterioration. As of September 30, 2018 and December 31, 2017, the Company pledged $0 and $210, respectively, of collateral to the counterparty in the form of cash on deposit with a third party. The Company's counterparty was required to pledge $4,440 and $980 at September 30, 2018 and December 31, 2017, respectively. The Company estimates there will be approximately $43 of cash receipts and reclassification from accumulated other comprehensive income to interest expense through the 12 months ending September 30, 2019. Interest rate swaps with a total notional amount of $70,000 were terminated in 2015, subject to termination fees totaling $541. The termination fees are being reclassified from accumulated other comprehensive income to interest expense over the remaining life of the underlying cash flows through June 2020. Approximately $95 of termination fees will be reclassified to interest expense through the 12 months ended September 30, 2019.

The table below identifies the balance sheet category and fair values of the Company's derivative instruments designated as cash flow hedges as of September 30, 2018 and December 31, 2017.

	Notional Amount		Fair Value			Balance Sheet Category	Weighted Average Receive Rate		Weighted Average Pay Rate		Maturity
September 30, 2018
Interest rate swap	$	30,000	$	414		Other Assets	2.66	%	2.52	%	9/21/2020
Interest rate swap(1)	20,000		1,851			Other Assets	5.45	%	4.81	%	9/30/2026
Interest rate swap(2)	60,000		2,082			Other Assets	—		2.31	%	12/31/2025
December 31, 2017
Interest rate swap	$	30,000	$	(86	)	Other Liabilities	1.95	%	2.52	%	9/21/2020
Interest rate swap(1)	20,000		895			Other Assets	—		4.81	%	9/30/2026

(1) This swap is a forward-starting swap with a weighted average pay rate of 4.81 percent beginning September 30, 2018. No interest payments are required related to this swap until December 30, 2018.

(2) This swap is a forward-starting swap with a weighted average pay rate of 2.31 percent beginning December 31, 2018. No interest payments are required related to this swap until January 31, 2019.

The following table identifies the pre-tax gains or losses recognized on the Company's derivative instruments designated as cash flow hedges for the nine months ended September 30, 2018 and 2017.

					Reclassified from AOCI into Income
	Amount of Pre-tax Gain (Loss) Recognized in OCI
						Amount of Loss
	Nine Months Ended September 30,					Nine Months Ended September 30,
	2018		2017		Category	2018			2017
Interest rate swaps	$	3,512	(376	)	Interest Expense	$	(96	)	(321	)